REG - Bank of Queensland - BOQ Covered Bond Trust – Programme Update 2023
02/05/2023 07:00
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RNS Number : 0530Y Bank of Queensland Limited 02 May 2023
Bank of Queensland Limited (ABN 32 009 656 740)
(incorporated with limited liability in the Commonwealth of Australia)
AUD6,000,000,000 BOQ Covered Bond Programme
unconditionally and irrevocably guaranteed as to payments of interest and
principal by
Perpetual Corporate Trust Limited (ABN 99 000 341 533)
(incorporated with limited liability in the Commonwealth of Australia)
as trustee of the BOQ Covered Bond Trust and Covered Bond Guarantor
Under the AUD6,000,000,000 BOQ Covered Bond Programme (the Programme)
established by Bank of Queensland Limited (BOQ and the Issuer) on the
Programme Date, the Issuer may from time to time issue bonds (the Covered
Bonds) denominated in any currency agreed between the Issuer and the relevant
Dealer(s) (as defined below). The price and amount of the Covered Bonds to
be issued under the Programme will be determined by the Issuer and the
relevant Dealer at the time of issue in accordance with prevailing market
conditions. Any Covered Bonds issued under the Programme on or after the
date of this Prospectus are issued subject to the provisions described herein
and in any supplement thereto.
Perpetual Corporate Trust Limited in its capacity as trustee of the BOQ Covered Bond Trust (the Covered Bond Guarantor) has guaranteed payments of interest and principal under the Covered Bonds pursuant to a guarantee which is secured over the Mortgage Loan Rights (as defined in this Prospectus) and its other assets. Recourse against the Covered Bond Guarantor under its guarantee, except in limited circumstances, is limited to the extent of the Covered Bond Guarantor's right of indemnity from the Assets of the BOQ Covered Bond Trust (the Trust).
Covered Bonds may be issued in bearer or registered form. The maximum
aggregate nominal amount of all Covered Bonds from time to time outstanding
under the Programme will not exceed AUD6,000,000,000 (or its equivalent in
other currencies calculated by reference to the spot rate for the sale of
Australian dollars against the purchase of such currency in the London foreign
exchange market quoted by any leading bank selected by the Issuer on the
relevant date of the agreement (or the preceding day on which commercial banks
and foreign exchange markets are open for business in London) to issue between
the Issuer and the relevant Dealer(s) (as defined below)), subject to increase
as described in the Programme Agreement.
The Covered Bonds may be issued on a continuing basis to the Dealers specified
under the section headed "Programme Overview" of this Prospectus and any
additional Dealer appointed under the Programme from time to time by the
Issuer (each, a Dealer, and together, the Dealers), which appointment may be
to a specific issue or on an ongoing basis. References in this Prospectus to
the relevant Dealers will, in the case of an issue of Covered Bonds being (or
intended to be) subscribed for by more than one Dealer, be to all Dealers
agreeing to subscribe for such Covered Bonds.
See the section entitled "Risk Factors" in this Prospectus for a discussion of
material risk factors to be considered in connection with an investment in the
Covered Bonds. This Prospectus does not describe all of the risks of an
investment in the Covered Bonds.
Prospective investors in Covered Bonds should ensure that they understand the
nature of the relevant Covered Bonds and the extent of their exposure to risks
and that they consider the suitability of the relevant Covered Bonds as an
investment in the light of their own circumstances and financial condition.
CERTAIN ASPECTS OF COVERED BONDS INVOLVE A DEGREE OF RISK AND INVESTORS SHOULD
BE PREPARED TO SUSTAIN A LOSS OF ALL OR PART OF THEIR INVESTMENT. It is the
responsibility of prospective investors to ensure that they have sufficient
knowledge, experience and professional advice to make their own legal,
financial, tax, accounting and other business evaluation of the merits and
risks of investing in the Covered Bonds and are not relying on the advice of
the Issuer, the Covered Bond Guarantor, the Trust Manager (as defined in this
Prospectus), the Security Trustee (as defined in this Prospectus), the Bond
Trustee (as defined in this Prospectus), the Agents (as defined in this
Prospectus), the Arranger (as defined in this Prospectus), the Relevant Dealer
or any other party to a Programme Document (as defined in this Prospectus).
This Prospectus has been approved as a base prospectus by the Financial Conduct Authority (the FCA), as competent authority under Regulation (EU) 2017/1129 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018 (EUWA) (the UK Prospectus Regulation). The FCA only approves this Prospectus as meeting the standards of completeness, comprehensibility and consistency imposed by the UK Prospectus Regulation. Such approval should not be considered as an endorsement of the Issuer and the Covered Bond Guarantor and the quality of the Covered Bonds that are the subject of this Prospectus. Investors should make their own assessment as to the suitability of investing in the Covered Bonds.
Application has been made for the purpose of giving information with regard to
the issue of Covered Bonds issued under the Programme to be admitted to the
official list of the FCA (the Official List) and an application has been made
to the London Stock Exchange plc (the London Stock Exchange) for such Covered
Bonds to be admitted to trading on the main market of the London Stock
Exchange which is a UK regulated market for the purposes of Regulation (EU) No
600/2014 on markets in financial instruments as it forms part of domestic law
by virtue of the EUWA (UK MiFIR) (the main market of the London Stock
Exchange) during the period of 12 months from the date of this Prospectus.
References in this Prospectus to Covered Bonds being "listed" (and all related
references) will, unless the context otherwise requires, mean that such
Covered Bonds have been admitted to trading on the main market of the London
Stock Exchange and have been admitted to the Official List. Perpetual
Corporate Trust Limited and P.T. Limited have not made or authorised the
application to admit Covered Bonds issued under the Programme to the Official
List or to admit the Covered Bonds to trading on the main market of the London
Stock Exchange.
This Prospectus (as supplemented as at the relevant time, if applicable) is
valid for 12 months from its date in relation to Covered Bonds which are to be
admitted to trading on a regulated market in the United Kingdom (UK). The
obligation to supplement this Prospectus in the event of a significant new
factor, material mistake or material inaccuracy does not apply when this
Prospectus is no longer valid.
The requirement to publish a prospectus under the Regulation (EU) 2017/1129
(the Prospectus Regulation) only applies to Covered Bonds which are to be
admitted to trading on a regulated market in the European Economic Area (the
EEA) and/or offered to the public in the EEA other than in circumstances where
an exemption is available under Article 1.4 of the Prospectus Regulation (as
implemented in the relevant Member State(s)). The requirement to publish a
prospectus under the Financial Services and Markets Act 2000 (FSMA) only
applies to Covered Bonds which are admitted to trading on a UK regulated
market as defined in UK MiFIR and/or offered to the public in the UK other
than in circumstances where an exemption is available under section 86 of the
FSMA. References in this Prospectus to Exempt Covered Bonds are to Covered
Bonds for which no prospectus is required to be published under the Prospectus
Regulation and FSMA. The FCA has neither approved nor reviewed information
contained within this Prospectus in connection with Exempt Covered Bonds and
such information does not form part of this Prospectus for the purposes of the
Prospectus Regulation and FSMA.
Notice of the aggregate nominal amount of Covered Bonds, interest (if any)
payable in respect of Covered Bonds, the issue price of Covered Bonds and any
other terms and conditions not contained in this Prospectus which are
applicable to each Tranche (as defined under the Terms and Conditions of the
Covered Bonds) of Covered Bonds will (other than in the case of Exempt Covered
Bonds) be set out in the Final Terms for that Tranche (each, the Final Terms)
which, with respect to Covered Bonds to be listed on the London Stock
Exchange, will be delivered to the FCA and the London Stock Exchange on or
before the date of issue of such Tranche of Covered Bonds. In the case of
Exempt Covered Bonds, notice of the aggregate nominal amount of Covered Bonds,
interest (if any) payable in respect of Covered Bonds, the issue price of
Covered Bonds and certain other information which is applicable to each
Tranche will be set out in a pricing supplement document (the Pricing
Supplement).
The Programme provides that Covered Bonds may be listed or admitted to
trading, as the case may be, on such other or further stock exchanges or
markets as may be agreed between the Issuer and the Relevant Dealer(s). The
Issuer may also issue unlisted Covered Bonds and/or Covered Bonds not admitted
to trading on any market.
Under present law, the Covered Bonds will not be subject to Australian
interest withholding tax if they are issued in accordance with prescribed
conditions set out in section 128F of the Tax Act and they are not acquired
directly or indirectly by Offshore Associates of the Issuer, subject to
certain exceptions. Accordingly, the Covered Bonds must not be acquired by any
Offshore Associate of the Issuer.
The Covered Bonds and the Covered Bond Guarantee (as defined below) have not
been and will not be registered under the U.S. Securities Act of 1933, as
amended (the Securities Act), or under any securities laws of any state or
other jurisdiction of the United States and may not be offered or sold in the
United States or to, or for the account or the benefit of, U.S. persons as
defined in Regulation S under the Securities Act (Regulation S) unless an
exemption from the registration requirements of the Securities Act is
available and in accordance with all applicable securities laws of any state
of the United States and any other jurisdiction. See "Form of the Covered
Bonds" for a description of the manner in which Covered Bonds will be
issued. Covered Bonds are subject to certain restrictions on transfer, see
"Subscription and Sale and Transfer and Selling Restrictions".
The Issuer and the Covered Bond Guarantor may agree with any Dealer and the
Bond Trustee that Covered Bonds may be issued in a form not contemplated by
the Conditions of the Covered Bonds herein, in which event (in the case of
Covered Bonds admitted to the Official List only) a supplementary prospectus
to the Prospectus, if appropriate, will be made available which will describe
the effect of the agreement reached in relation to such Covered Bonds.
The Issuer has debt ratings for its long-term unsubordinated unsecured obligations of BBB+ by S&P Global Ratings Australia Pty Ltd (S&P), A3 by Moody's Investors Service Pty Ltd (Moody's) and A- by Fitch Australia Pty Ltd (Fitch, and together with Moody's only, the Rating Agencies). The rating of certain Series or Tranches of Covered Bonds to be issued under the Programme will be specified in the Applicable Final Terms (or, in the case of Exempt Covered Bonds, the Applicable Pricing Supplement). Unless otherwise specified in the Applicable Final Terms (or, in the case of Exempt Covered Bonds, the Applicable Pricing Supplement), Moody's and Fitch will assign such ratings. Please also refer to "Credit ratings assigned to the Covered Bonds may change and may not reflect all risks associated with an investment in the Covered Bonds" in the Risk Factors section of this Prospectus. A credit rating is not a recommendation to buy, sell or hold securities and may be subject to revision, suspension or withdrawal at any time by the assigning rating organisation.
Neither of the Rating Agencies nor S&P is established in the European
Union or in the UK, and neither of the Rating Agencies nor S&P is
registered in accordance with Regulation (EC) No. 1060/2009 (as amended) (the
CRA Regulation) or under Regulation (EC) No. 1060/2009 as it forms part of
domestic law by virtue of the EUWA (the UK CRA Regulation). In general, and
subject to certain exceptions (including the exception outlined below), EU
regulated investors are restricted under the CRA Regulation from using a
credit rating for regulatory purposes in the EEA if such a credit rating is
not issued by a credit rating agency established in the EEA and registered
under the CRA Regulation or endorsed by an EEA-registered credit rating agency
or the relevant third country rating agency is certified in accordance with
the CRA Regulation (and such endorsement action or certification, as the case
may be, has not been withdrawn or suspended, subject to transitional
provisions that apply in certain circumstances). Investors regulated in the UK
are subject to similar restrictions under the UK CRA Regulation. The rating by
S&P has been endorsed by S&P Global Ratings Europe Limited, the rating
by Moody's has been endorsed by Moody's Deutschland GmbH and the rating by
Fitch has been endorsed by Fitch Ratings Ireland Limited, each in accordance
with the CRA Regulation, and have not been withdrawn. Each of S&P Global
Ratings Europe Limited, Moody's Deutschland GmbH, and Fitch Ratings Ireland
Limited is established in the EU and registered under the CRA Regulation.
S&P Global Ratings Europe Limited, Moody's Deutschland GmbH, and Fitch
Ratings Ireland Limited are included in the list of credit rating agencies
published by the European Securities and Markets Authority (ESMA) on its
website (at https://www.esma.europa.eu/page/List-registered-and-certified-CRAs
(http://www.esma.europa.eu/page/List-registered-and-certified-CRAs) ) in
accordance with the CRA Regulation. The rating by S&P has been endorsed by
S&P Global Ratings UK Limited, the rating by Moody's has been endorsed by
Moody's Investors Service Ltd, and the rating by Fitch has been endorsed by
Fitch Ratings Limited, in each case in accordance with the UK CRA Regulation
and have not been withdrawn. There can be no assurance that such endorsement
of the credit ratings of S&P, Moody's and Fitch will continue. Each of
S&P Global Ratings UK Limited, Moody's Investors Service Ltd. and Fitch
Ratings Limited is established in the UK and is registered in accordance with
the UK CRA Regulation. As such, as at the date of this Prospectus, it appears
on the list of credit rating agencies registered or certified with the FCA
published on its website
https://www.fca.org.uk/markets/credit-rating-agencies/registered-certified-cras.
The ratings issued by S&P Global Ratings UK Limited, Moody's Investors
Service Ltd. and Fitch Ratings Limited may be used for regulatory purposes in
the UK in accordance with the UK CRA Regulation.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED THAT
THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENCE.
Arranger for the Programme
National Australia Bank Limited
Dealers for the Programme
ANZ BNP PARIBAS Commerzbank
ING National Australia Bank Limited UBS Investment Bank
The date of this Prospectus is 24 April 2023
This Prospectus comprises a base prospectus for the purposes of Article 8 of
the Prospectus Regulation and the UK Prospectus Regulation, replaces and
supersedes the Prospectus dated 20 April 2022 describing the Programme and has
been published in accordance with the prospectus rules made under the FSMA.
This Prospectus is not a prospectus for the purposes of section 12(a)(2) of
the Securities Act or any other provision or order under the Securities Act.
This Prospectus has not been, nor will be, lodged with the Australian
Securities and Investments Commission and is not a 'prospectus' or other
'disclosure document' for the purposes of the Corporations Act 2001 (Cth)
(Corporations Act). See the section "Subscription and Sale and Transfer and
Selling Restrictions" in this Prospectus.
The Issuer accepts responsibility for the information contained in this Prospectus, the
Applicable Final Terms for each Tranche of Covered Bonds (or, in the case of a Tranche of Exempt Covered Bonds, the Applicable Pricing Supplement) issued under the Programme and any document incorporated by reference into this Prospectus. The Covered Bond Guarantor only accepts responsibility for the information contained in the sections entitled "Risk Factors - Risk factors related to the Covered Bond Guarantor", "Structure Overview - Programme - Covered Bond Guarantee", "General Description of the Programme - Covered Bond Guarantor", "General Description of the Programme - Covered Bond Guarantee", Conditions 3(b) and 9(b) in the section entitled "Terms and Conditions of the Covered Bonds", "The BOQ Covered Bond Trust - Perpetual Corporate Trust Limited", "Overview of the Principal Documents - The Covered Bond Guarantee", "Credit Structure - Covered Bond Guarantee", the Covered Bond Guarantee as referenced in (iii) of "General Information - Documents Available", the second paragraph in "General Information - Significant or Material Change" and the second paragraph in "General Information - Litigation" of this Prospectus and paragraphs 2 and 16 in the Final Terms (or, in the case of Exempt Covered Bonds, the applicable Pricing Supplement) for each Tranche of Covered Bonds issued under the Programme. To the best of the knowledge of the Issuer and the Covered Bond Guarantor, only in relation to the information for which it is responsible, the information contained in this Prospectus is in accordance with the facts and this Prospectus makes no omission likely to affect its import.
Copies of each set of Final Terms issued subject to the provisions described
in this Prospectus and any supplement thereto (in the case of Covered Bonds to
be admitted to the Official List) will be available from the registered office
of the Issuer and (in the case of Covered Bonds to be admitted to the Official
List, to listing on any other regulated or unregulated market or stock
exchange and also all unlisted Covered Bonds) from the specified office set
out below of each of the Paying Agents (as defined below). Final Terms
relating to the Covered Bonds which are admitted to trading on the main market
of the London Stock Exchange will be available for inspection on the website
of the Regulatory News Service operated by the London Stock Exchange at
www.londonstockexchange.com/exchange/news/market news/market-news-home.html.
This Prospectus is to be read in conjunction with all documents which are
deemed to be incorporated herein by reference (see "Documents Incorporated by
Reference" below). This Prospectus must, save as specified herein, be read
and construed on the basis that such documents are so incorporated and form
part of this Prospectus. Other than in relation to the documents which are
deemed to be incorporated by reference (see "Documents Incorporated by
Reference" below), the information on the websites to which this Prospectus
refers does not form part of this Prospectus and has not been scrutinised or
approved by the FCA.
The information contained in this Prospectus was obtained from the Issuer and
other sources (identified in this Prospectus), but no assurance can be given
by any other party to the Programme Documents (in respect of information
obtained from the Issuer) as to the accuracy or completeness of this
information. Accordingly, no representation, warranty or undertaking,
express or implied, is made and no responsibility or liability is accepted by
the Arranger, the Dealers or any other party to the Programme Documents (other
than in respect of the information for which it accepts responsibility as
indicated above) as to the accuracy or completeness of the information
contained or incorporated in this Prospectus or any other information provided
by a party to the Programme Documents in connection with the Programme. None
of the parties to the Programme Documents (other than in respect of the
information for which it accepts responsibility as indicated above) accept any
liability in relation to the information contained or incorporated by
reference in this Prospectus or any other information provided by the Issuer
in connection with the Programme.
No person is or has been authorised by any party to the Programme Documents to
give any information or to make any representation not contained in or not
consistent with this Prospectus or any other information supplied in
connection with the Programme or the Covered Bonds and, if given or made, such
information or representation must not be relied upon as having been
authorised by such party.
Neither this Prospectus nor any other information supplied in connection with
the Programme or any Covered Bonds (i) is intended to provide the basis of any
credit or other evaluation or (ii) should be considered as a recommendation by
any party to the Programme Documents that any recipient of this Prospectus or
any other information supplied in connection with the Programme or any Covered
Bonds should purchase any Covered Bonds. Each investor contemplating
purchasing any Covered Bonds should make its own independent investigation of
the financial condition and affairs, and its own appraisal of the
creditworthiness, of the Issuer and/or the Covered Bond Guarantor. Neither
this Prospectus nor any other information supplied in connection with the
Programme or the issue of any Covered Bonds constitutes an offer or invitation
by or on behalf of any party to the Programme Documents to any person to
subscribe for or to purchase any Covered Bonds.
Neither the delivery of this Prospectus nor the offering, sale or delivery of
any Covered Bonds will in any circumstances imply that the information
contained herein concerning the Issuer and/or the Covered Bond Guarantor is
correct at any time subsequent to the date hereof or that any other
information supplied in connection with the Programme is correct as of any
time subsequent to the date indicated in the document containing the same.
All parties to the Programme Documents (other than the Issuer and the Covered
Bond Guarantor) expressly do not undertake to review the financial condition
or affairs of the Issuer or the Covered Bond Guarantor during the life of the
Programme or to advise any investor in the Covered Bonds of any information
coming to their attention. Investors should review, inter alia, the most
recently published documents incorporated by reference into this Prospectus
when deciding whether or not to purchase any Covered Bonds.
The Covered Bonds in bearer form are subject to U.S. tax law requirements and
may not be offered, sold or delivered within the United States or its
possessions or to United States persons, except in certain transactions
permitted by U.S. tax regulations and the Securities Act (see "Subscription
and Sale and Transfer and Selling Restrictions" below). Terms used in this
paragraph have the meanings given to them by the U.S. Internal Revenue Code of
1986 and the U.S. Treasury regulations promulgated thereunder.
MiFID II PRODUCT GOVERNANCE / TARGET MARKET - The Applicable Final Terms in
respect of any Covered Bonds (or, in the case of Exempt Covered Bonds, the
Applicable Pricing Supplement) may include a legend entitled "MiFID II Product
Governance" which will outline the target market assessment in respect of the
Covered Bonds and which channels for distribution of the Covered Bonds are
appropriate. Any person subsequently offering, selling or recommending the
Covered Bonds (a distributor) should take into consideration the target market
assessment; however, a distributor subject to MiFID II is responsible for
undertaking its own target market assessment in respect of the Covered Bonds
(by either adopting or refining the target market assessment) and determining
appropriate distribution channels.
A determination will be made in relation to each issue of Covered Bonds about
whether, for the purpose of the MiFID Product Governance rules under EU
Delegated Directive 2017/593 (the MiFID Product Governance Rules), any Dealer
subscribing for any Covered Bonds is a manufacturer in respect of such Covered
Bonds, but otherwise neither the Arranger nor the Dealers nor any of their
respective affiliates will be a manufacturer for the purpose of the MIFID
Product Governance Rules.
UK MiFIR PRODUCT GOVERNANCE / TARGET MARKET - The Final Terms in respect of
any Covered Bonds (or Pricing Supplement, in the case of Exempt Covered Bonds)
may include a legend entitled "UK MiFIR Product Governance" which will outline
the target market assessment in respect of the Covered Bonds and which
channels for distribution of the Covered Bonds are appropriate. Any person
subsequently offering, selling or recommending the Covered Bonds (a
distributor) should take into consideration the target market assessment;
however, a distributor subject to the FCA Handbook Product Intervention and
Product Governance Sourcebook (the UK MiFIR Product Governance Rules) is
responsible for undertaking its own target market assessment in respect of the
Covered Bonds (by either adopting or refining the target market assessment)
and determining appropriate distribution channels.
A determination will be made in relation to each issue about whether, for the
purpose of the UK MiFIR Product Governance Rules, any Dealer subscribing for
any Covered Bonds is a manufacturer in respect of such Covered Bonds, but
otherwise neither the Arranger nor the Dealers nor any of their respective
affiliates will be a manufacturer for the purpose of the UK MiFIR Product
Governance Rules.
PROHIBITION OF SALES TO EEA RETAIL INVESTORS - The Covered Bonds are not
intended to be offered, sold or otherwise made available to and should not be
offered, sold or otherwise made available to any retail investor in the EEA.
For these purposes, a retail investor means a person who is one (or more) of:
(i) a retail client as defined in point (11) of Article 4(1) of MiFID II; (ii)
a customer within the meaning of Directive (EU) 2016/97 (the Insurance
Distribution Directive), where that customer would not qualify as a
professional client as defined in point (10) of Article 4(1) of MiFID II; or
(iii) not a qualified investor as defined in the Prospectus Regulation.
Consequently no key information document required by Regulation (EU) No
1286/2014 (as amended, the PRIIPs Regulation) for offering or selling the
Covered Bonds or otherwise making them available to retail investors in the
EEA has been prepared and therefore offering or selling the Covered Bonds or
otherwise making them available to any retail investor in the EEA may be
unlawful under the PRIIPS Regulation.
PROHIBITION OF SALES TO UK RETAIL INVESTORS - The Covered Bonds are not
intended to be offered, sold or otherwise made available to and should not be
offered, sold or otherwise made available to any retail investor in the United
Kingdom. For these purposes, a retail investor means a person who is one (or
more) of: (i) a retail client, as defined in point (8) of Article 2 of
Regulation (EU) No 2017/565 as it forms part of domestic law by virtue of the
EUWA; or (ii) a customer within the meaning of the provisions of the FSMA and
any rules or regulations made under the FSMA to implement Directive (EU)
2016/97, where that customer would not qualify as a professional client, as
defined in point (8) of Article 2(1) of Regulation (EU) No 600/2014 as it
forms part of domestic law by virtue of the EUWA; or (iii) not a qualified
investor as defined in Article 2 of Regulation (EU) 2017/1129 as it forms part
of domestic law by virtue of the EUWA. Consequently no key information
document required by Regulation (EU) No 1286/2014 as it forms part of domestic
law by virtue of the EUWA (the UK PRIIPs Regulation) for offering or selling
the Covered Bonds or otherwise making them available to retail investors in
the UK has been prepared and therefore offering or selling the Covered Bonds
or otherwise making them available to any retail investor in the UK may be
unlawful under the UK PRIIPs Regulation.
BENCHMARKS REGULATIONS - Amounts payable on certain Floating Rate Covered
Bonds issued under the Programme may be calculated by reference to EURIBOR,
Compounded Daily SONIA, HIBOR, CDOR, BBSW Rate, SIBOR, BKBM or NIBOR, as
specified in the Applicable Final Terms (or, in the case of Exempt Covered
Bonds, the Applicable Pricing Supplement). As at the date of this Prospectus,
(i) Refinitiv Benchmark Services (UK) Limited (as the administrator of CDOR)
are included in the register of administrators and benchmarks established and
maintained by the FCA (the UK Benchmarks Register) pursuant to Article 36 of
Regulation (EU) No 2016/1011 as it forms part of domestic law by virtue of the
EUWA (the UK Benchmarks Regulation) but not in the register of administrators
and benchmarks established and maintained by ESMA (the EU Benchmarks Register)
pursuant to Article 36 of the Regulation (EU) No. 2016/1011(the EU Benchmarks
Regulation), (ii) European Money Markets Institute (as administrator of
EURIBOR) is included in the EU Benchmarks Register and the UK Benchmarks
Register, (iii) ABS Benchmarks Administration Co Pte. Ltd. (as administrator
of SIBOR), Norske Finansielle Referanser AS (as administrator of NIBOR) and
ASX Benchmarks Limited (as administrator of the BBSW Rate) are included in the
EU Benchmarks Register but not the UK Benchmarks Register. As at the date of
this Prospectus, the administrators of SONIA, CDOR, HIBOR and BKBM do not
appear on ESMA's register of administrators and benchmarks under Article 36 of
the EU Benchmarks Regulation. As far as the Issuer is aware, (i) SONIA does
not fall within the scope of the EU Benchmarks Regulation, and (ii) the
transitional provisions in Article 51 of the EU Benchmarks Regulation apply,
such that each of Refinitiv Benchmark Services (UK) Limited (as administrator
of CDOR), the Treasury Markets Association (as administrator of HIBOR) and New
Zealand Financial Markets Association (as administrator of BKBM) is not
currently required to obtain recognition, endorsement or equivalence).
SECTION 309B NOTIFICATION - In connection with Section 309B of the Securities
and Futures Act 2001 of Singapore (the SFA) and the Securities and Futures
(Capital Markets Products) Regulations 2018 of Singapore (the CMP Regulations
2018), the Issuer has determined, and hereby notifies all relevant persons as
defined in Section 309A(1) of the SFA, unless otherwise stated in the
Applicable Final Terms in respect of any Covered Bonds (or, in the case of
Exempt Covered Bonds, the Applicable Pricing Supplement), that all Covered
Bonds issued or to be issued under the Programme are classified as capital
markets products other than prescribed capital markets products (as defined in
the CMP Regulations 2018) and Specified Investment Products (as defined in MAS
Notice SFA 04-N12: Notice on the Sale of Investment Products and MAS Notice
FAA-N16: Notice on Recommendations on Investment Products).
This Prospectus does not constitute an offer to sell or the solicitation of an
offer to buy any Covered Bonds in any jurisdiction to any person to whom it is
unlawful to make the offer or solicitation in such jurisdiction. The
distribution of this Prospectus and the offer or sale of Covered Bonds may be
restricted by law in certain jurisdictions. No party to the Programme
Documents represents that this Prospectus may be lawfully distributed, or that
any Covered Bonds may be lawfully offered, in compliance with any applicable
registration or other requirements in any such jurisdiction, or pursuant to an
exemption available thereunder, or assume any responsibility for facilitating
any such distribution or offering. In particular, no action has been taken
by any party to the Programme Documents which would permit a public offering
of any Covered Bonds or distribution of this Prospectus in any jurisdiction
where action for that purpose is required. Accordingly, no Covered Bonds may
be offered or sold, directly or indirectly, and neither this Prospectus nor
any advertisement or other offering material may be distributed or published
in any jurisdiction, except under circumstances that will result in compliance
with any applicable laws and regulations. Persons into whose possession this
Prospectus or any Covered Bonds may come must inform themselves about, and
observe, any such restrictions on the distribution of this Prospectus and the
offering and sale of Covered Bonds. In particular, there are restrictions on
the distribution of this Prospectus and the offer or sale of Covered Bonds in
the United States, Australia, the EEA, the UK, the Netherlands, Norway,
Denmark, Sweden and Switzerland, Japan, Singapore, and Hong Kong, see
"Subscription and Sale and Transfer and Selling Restrictions".
Credit ratings in respect of the Covered Bonds or the Issuer are for
distribution only to persons who are not a "retail client" within the meaning
of section 761G of the Corporations Act and are also sophisticated investors,
professional investors or other investors in respect of whom disclosure is not
required under Part 6D.2 of the Corporations Act and, in all cases, in such
circumstances as may be permitted by acceptable law in any jurisdiction in
which an investor may be located. Anyone who is not such a person is not
entitled to receive this Prospectus and anyone who receives this Prospectus
must not distribute it to any person who is not entitled to receive it.
All references in this document to "Australian Dollar", "AUD" and "A$" refer
to the lawful currency for the time being of Australia, references to "US$",
"U.S. dollars" are to the lawful currency of the United States of America,
references to "Sterling" and "£" are to the lawful currency of the United
Kingdom and references to "euro" and "€" refer to the currency introduced at
the start of the third stage of European economic and monetary union pursuant
to the Treaty on the functioning of the European Union.
In connection with the distribution of any Covered Bonds (other than A$
Registered Covered Bonds), the Dealer or Dealers (if any) acting as the
stabilising manager(s) (or persons acting on behalf of any stabilising
manager(s)) as named in the Applicable Final Terms (or, in the case of Exempt
Covered Bonds, the Applicable Pricing Supplement) may over-allot Covered Bonds
or effect transactions with a view to supporting the market price of the
Covered Bonds and/or any associated securities at a level higher than that
which might otherwise prevail (in each case outside Australia and not on any
market in Australia), but in doing so such Dealer must act as principal and
not as agent of the Issuer or Covered Bond Guarantor. However, there is no
assurance that the stabilising manager(s) (or persons acting on behalf of a
stabilising manager) will undertake stabilisation action. Any stabilisation
action may begin at any time after the date on which adequate public
disclosure of the final terms of the offer of the relevant Series or Tranche
of Covered Bonds is made and, if begun, may be ended at any time, but it must
end no later than the earlier of 30 days after the issue date of the relevant
Series or Tranche of Covered Bonds and 60 days after the date of the allotment
of the relevant Series or Tranche of Covered Bonds. Any stabilisation must
be conducted by the relevant stabilising manager(s) (or persons acting on
behalf of any stabilising manager(s)) in accordance with all applicable
regulations.
In making an investment decision, investors must rely on their own examination
of the Issuer and the Covered Bond Guarantor and the terms of the Covered
Bonds being offered, including the merits and risks involved.
None of the parties to the Programme Documents make any representation to any
investor in the Covered Bonds regarding the legality of its investment under
any applicable laws. Any investor in the Covered Bonds should be able to
bear the economic risk of an investment in the Covered Bonds for an indefinite
period of time.
Each of the Arranger and the Dealers discloses that, in addition to the
arrangements and interests it will or may have with respect to the Covered
Bond Guarantor and the Issuer as described in this Prospectus (the Programme
Document Interests), it, its Related Entities and employees (each a Relevant
Entity):
(a) may from time to time be a Covered Bondholder or have other
interests with respect to the Covered Bonds and it may also have interests
relating to other arrangements with respect to a Covered Bondholder or a
Covered Bond; and
(b) may receive fees, brokerage and commissions or other benefits,
and act as principal with respect to any dealing with respect to any Covered
Bonds, (the Bond Interests).
Each purchaser of Covered Bonds acknowledges these disclosures and agrees
that:
(i) each Relevant Entity will or may have the Programme Document
Interests and may from time to time have the Bond Interests and is, and from
time to time may be, involved in a broad range of transactions including,
without limitation, banking, dealing in financial products, credit, derivative
and liquidity transactions, investment management, corporate and investment
banking and research in various capacities in respect of the Issuer or the
Covered Bond Guarantor or any other person, both on the Relevant Entity's own
account and for the account of other persons (the Other Transaction
Interests);
(ii) each Relevant Entity in the course of its business (whether
with respect to the Programme Document Interests, the Bond Interests, the
Other Transaction Interests or otherwise) may act independently of any other
Relevant Entity;
(iii) to the maximum extent permitted by applicable law, the duties
of each Relevant Entity in respect of any member of the Issuer and the Covered
Bond Guarantor and the Covered Bonds are limited to the contractual
obligations of the parties as set out in the Programme Documents and, in
particular, no advisory or fiduciary duty is owed to any person;
(iv) a Relevant Entity may have or come into possession of
information not contained in this Prospectus that may be relevant to any
decision by a potential investor to acquire the Covered Bonds and which may or
may not be publicly available to potential investors (Relevant Information);
(v) to the maximum extent permitted by applicable law, no Relevant
Entity is under any obligation to disclose any Relevant Information to the
Issuer, the Covered Bond Guarantor or to any potential investor and this
Prospectus and any subsequent conduct by a Relevant Entity should not be
construed as implying that the Relevant Entity is not in possession of such
Relevant Information; and
(vi) each Relevant Entity may have various potential and actual
conflicts of interest arising in the course of its business, including in
respect of the Programme Document Interests, the Covered Bond Interests or the
Other Transaction Interests. The existence of a Programme Document Interest or
Other Transaction Interest may affect how a Relevant Entity in another
capacity (e.g. as a Covered Bondholder) may seek to exercise any rights it may
have in that capacity. These interests may conflict with the interests of the
Issuer or the Covered Bond Guarantor or a Covered Bondholder and such entity
may suffer loss as a result. To the maximum extent permitted by applicable
law, a Relevant Entity is not restricted from entering into, performing or
enforcing its rights in respect of the Programme Document Interests, the Bond
Interests or the Other Transaction Interests and may otherwise continue or
take steps to further or protect any of those interests and its business even
where to do so may be in conflict with the interests of Covered Bondholders,
the Issuer or the Covered Bond Guarantor, and the Relevant Entities may in so
doing act without notice to, and without regard to, the interests of any such
person.
FORWARD-LOOKING STATEMENTS
This Prospectus contains various forward-looking statements regarding events
and trends that are subject to risks and uncertainties that could cause the
actual results and financial position of BOQ and its consolidated subsidiary
undertakings (collectively, the BOQ Group) to differ materially from the
information presented herein. When used in this Prospectus, the words
"estimate", "project", "intend", "anticipate", "believe", "expect", "should",
"likely", "could", "may", "target", "plan" and similar expressions, as they
relate to the BOQ Group and its management, are intended to identify such
forward-looking statements.
Projections are necessarily speculative in nature, and some or all of the
assumptions underlying the projections and other forward-looking statements
may not materialise or may vary significantly from actual results.
Consequently, future results may differ from the Issuer's expectations due to
a variety of factors, including (but not limited to) the economic environment
in Australia. Moreover, past financial performance should not be considered
a reliable indicator of future performance and prospective purchasers of the
Covered Bonds are cautioned that any such statements are not guarantees of
performance and involve risks and uncertainties, many of which are beyond the
control of the Issuer and/or the Covered Bond Guarantor. Neither the
Arranger nor the Dealers have attempted to verify any such statements, nor do
they make any representations, express or implied, with respect to such
statements.
None of the Arranger, the Dealers, the Issuer, the Covered Bond Guarantor, the
Security Trustee, the Trust Manager, the Bond Trustee, the Swap Providers nor
any other party to a Programme Document has any obligation to update or
otherwise revise any projections, including any revisions to reflect changes
in economic conditions or other circumstances arising after the date of this
Prospectus or to reflect the occurrence of unanticipated events, even if the
underlying assumptions do not come to fruition.
PRESENTATION OF FINANCIAL AND OPERATING INFORMATION
Unless otherwise indicated, the financial information incorporated by
reference into this Prospectus has been prepared in accordance with
International Financial Reporting Standards (IFRS).
Capitalised Terms
Capitalised terms used in this Prospectus, unless otherwise indicated, have
the meaning set out in this Prospectus. A glossary of defined terms appears at
the back of this Prospectus (see "Glossary").
In this Prospectus, unless the contrary intention appears, a reference to a
law or a provision of a law is a reference to that law or provision as
extended, amended or re-enacted.
COVERED BONDS MAY NOT BE A SUITABLE INVESTMENT FOR ALL INVESTORS
Each potential investor in the Covered Bonds must determine the suitability of
its investment in light of its own circumstances. In particular, each
potential investor should:
· have sufficient knowledge and experience to make a
meaningful evaluation of the Covered Bonds, the merits and risks of investing
in the Covered Bonds and the information contained or incorporated by
reference in this Prospectus or any applicable supplement;
· have access to, and knowledge of, appropriate analytical
tools to evaluate, in the context of its particular financial situation, an
investment in the Covered Bonds and the impact the Covered Bonds will have on
its overall investment portfolio;
· have sufficient financial resources and liquidity to bear
all of the risks of an investment in the Covered Bonds, including Covered
Bonds with principal or interest payable in one or more currencies, or where
the currency for principal or interest payments is different from the
potential investor's currency;
· understand thoroughly the terms of the Covered Bonds and
be familiar with the behaviour of any relevant indices and financial markets;
· be able to evaluate (either alone or with the help of a
financial adviser) possible scenarios for economic, interest rate and other
factors that may affect its investment and its ability to bear the applicable
risks; and
· understand the accounting, legal, regulatory and tax
implications of a purchase, holding and disposal of an interest in the
relevant Covered Bonds.
Covered Bonds are complex financial instruments. Sophisticated institutional
investors generally do not purchase complex financial instruments as
stand-alone investments. They may purchase complex financial instruments as
a way to reduce risk or enhance yield with an understood, measured,
appropriate addition of risk to their overall portfolios. A potential
investor should not invest in Covered Bonds which are complex financial
instruments unless it has the expertise (either alone or with a financial
adviser) to evaluate how the Covered Bonds will perform under changing
conditions, the resulting effects on the value of the Covered Bonds and the
impact this investment will have on the potential investor's overall
investment portfolio.
The investment activities of certain investors are subject to legal investment
laws and regulations, or review or regulation by certain authorities. Each
potential investor should consult its legal advisers to determine whether and
to what extent (1) Covered Bonds are legal investments for it, (2) Covered
Bonds can be used as collateral for various types of borrowing, (3) Covered
Bonds can be used as repo-eligible securities and (4) other restrictions
apply to its purchase or pledge of any Covered Bonds. Financial institutions
should consult their legal advisors or the appropriate regulators to determine
the appropriate treatment of Covered Bonds under any applicable risk-based
capital or similar rules. No predictions can be made as to the precise effects
of such matters on any investor and none of the Issuer, the Covered Bond
Guarantor, the Security Trustee, the Bond Trustee, the Arranger or the Dealers
makes any representation to any prospective investor or purchaser of the
Covered Bonds regarding the treatment of their investment as at the date of
this Prospectus or at any time in the future.
The Covered Bonds will not represent an obligation or be the responsibility of
any of the Arranger, the Dealers, the Bond Trustee, the Security Trustee, any
member of the BOQ Group (other than the Issuer in its capacity as Issuer under
the Programme Documents) or any other party to the Programme, their officers,
members, directors, employees, security holders or incorporators, other than
the Issuer and the Covered Bond Guarantor. The Issuer will be liable solely
in its corporate capacity for its obligations in respect of the Covered
Bonds. The Covered Bond Guarantor will be liable solely in its capacity as
trustee of the Trust for its obligations in respect of the Covered Bond
Guarantee. In both cases, such obligations will not be the obligations of
their respective officers, members, directors, employees, security holders or
incorporators.
TABLE OF CONTENTS
Risk
Factors.........................................................................................................................................
13
Principal Characteristics of the
Programme.........................................................................................
73
Structure
Overview..............................................................................................................................
77
General Description of the
Programme................................................................................................
84
Documents Incorporated by
Reference...............................................................................................
97
Form of the Covered
Bonds................................................................................................................
99
Form of Final Terms in respect of Covered Bonds to be issued under the
Programme...................... 103
Form of Pricing Supplement in respect of Exempt Covered Bonds to be issued
under the Programme 118
Terms and Conditions of the Covered
Bonds....................................................................................
135
Use of
Proceeds................................................................................................................................
199
Bank of Queensland
Limited.............................................................................................................
200
The BOQ Covered Bond
Trust..........................................................................................................
206
Bank of Queensland Limited Residential Mortgage Loan Origination, Mortgage
Loan Features, Servicing and
Enforcement......................................................................................................................................
209
Overview of the Principal
Documents...............................................................................................
217
Credit
Structure.................................................................................................................................
266
Cashflows.........................................................................................................................................
270
The Mortgage Loan
Rights.................................................................................................................
285
Description of the Covered Bond Provisions of the Australian Banking
Act..................................... 286
Book-Entry Clearance
Systems.........................................................................................................
289
Taxation............................................................................................................................................
291
Exchange Controls and
Limitations...................................................................................................
300
Subscription and Sale and Transfer and Selling
Restrictions.............................................................. 301
General
Information..........................................................................................................................
309
Glossary............................................................................................................................................
314
Risk Factors
The Issuer's activities are subject to risks that can adversely impact its
business, operations, financial condition and future performance.
This section describes the principal or material risk factors associated with an investment in the Covered Bonds that have been identified by the Issuer.
In each category of factors set out below, the Issuer believes that each
factor included in each category of factors is material, with the most
material in each category (based on the Issuer's assessment of the probability
of its occurrence and the expected magnitude of its negative impact) being
described first in each category.
Noting the points set out above by the Issuer with respect to its assessment
of the level, order of materiality and potential of occurrence of the risks
set out below, prospective purchasers of Covered Bonds should consider
carefully all the information contained in this Prospectus, including the
considerations set out below, before making any investment decision. Any of
the risks described below, or additional risks not currently known to the
Issuer or that the Issuer currently deems immaterial, could have a significant
or material adverse effect on the business, financial condition, operations or
prospects of the Issuer and could result in a corresponding decline in the
value of the Covered Bonds. As a result, investors could lose all or a
substantial part of their investment.
In addition, factors which are material for the purpose of assessing the
market risks associated with Covered Bonds issued under the Programme are also
described below.
RISK FACTORS RELATED TO THE ISSUER, INCLUDING THE ABILITY OF THE ISSUER TO
FULFIL ITS OBLIGATIONS UNDER THE COVERED BONDS
Risks relating to the BOQ Group
The Covered Bonds will constitute direct, unsecured and unconditional
obligations of the Issuer. A purchaser of Covered Bonds relies on the
creditworthiness of the Issuer and no other person (other than the Covered
Bond Guarantor in respect of payments under the Covered Bond Guarantee).
Investment in the Covered Bonds involves the risk that subsequent changes in
actual or perceived creditworthiness of the Issuer may adversely affect the
market value of the Covered Bonds.
Set out below are the principal risks and uncertainties associated with the
Issuer. However, the risk in each sub-category that the Issuer considers most
material is listed first, based on the information available at the date of
this Prospectus and the Issuer's best assessment of the likelihood of each
risk occurring and potential magnitude of its negative impact to the BOQ Group
should such risk materialise. In the event that one or more of these risks
materialise, the Issuer's business, operations, financial condition and future
performance may be adversely impacted.
There may be other risks faced by the Issuer and its controlled entities that
are currently unknown or are deemed immaterial, but which may subsequently
become known or material. These may individually or in aggregate adversely
impact the Issuer's future financial performance and position. Accordingly,
no assurances or guarantees of future performance, profitability,
distributions or returns of capital are given by the Issuer.
Credit risk
As a financial institution, the Issuer is exposed to the risks associated with
extending credit to other parties. Credit risk is the risk of financial loss
arising from a debtor or counterparty failing to meet their contractual debts
and obligations or the failure to recover the recorded value of secured
assets. Credit risk arises from both the Issuer's lending activities as well
as markets and trading activities.
The Issuer's lending activities cover a broad range of sectors, customers and
products, including residential mortgages, consumer loans, commercial loans
(including commercial property), equipment finance, vendor finance,
derivatives and other finance products.
Less favourable economic or business conditions or a deterioration in
commercial and residential property markets, whether generally (such as recent
increases in inflation and interest rates by central banks) or in a specific
industry sector or geographic region, or external events such as natural
disasters and natural hazards (including climatic, biological (such as the
COVID-19 pandemic (as defined below)), meteorological or geological), could
cause customers to experience an adverse financial situation, thereby exposing
the Issuer to the increased risk that those customers will fail to meet their
obligations in accordance with agreed terms.
An increase in the failure of customers to meet their obligations or the
decline in the value of security held by the Issuer (including a decline in
house prices), could adversely impact the Issuer's financial performance,
financial position, capital resources and prospects. The large proportion of
customers rolling from fixed rate to variable rate in the next 12 months may
also affect customer's ability to meet their obligations and may require the
Issuer to offer additional support.
The Issuer's markets and trading activities exposes the Issuer to counterparty
risk on other market counterparties that the Issuer may face when entering
into transactions such as interest rate swaps or cross currency swaps, should
those counterparties be unable to honour their contractual obligations due to
bankruptcy, lack of liquidity, operational failure or other reasons.
Such counterparty risk is more acute in difficult or volatile market
conditions (for example, in a high inflation environment with rising interest
rates) where the risk of failure of counterparties is higher, which could
adversely impact the Issuer's financial performance, financial position,
capital resources and prospects. There is also the risk that any provisioning
by the Issuer will be inadequate and any losses suffered will exceed the
Issuer's expectations.
Dependence on the Australian economy
The Issuer's business activities are primarily located in Australia and
therefore the Issuer's revenues and earnings are largely dependent on customer
and investor confidence, the state of the economy, the residential lending
market and prevailing market conditions in Australia. These factors are, in
turn, impacted by both domestic and international economic and political
events, natural disasters and the general state of the global and Australian
economy.
A downturn in the Australian economy (including as a result of high inflation
or rising interest rates which can lead to increased cost of living pressures)
may give rise to an increase in customer defaults, ultimately affecting the
Issuer's financial performance, profitability and return to investors.
Dependence on real estate markets
Residential and commercial property lending, together with property finance,
including real estate development and investment property finance, constitute
important businesses to the Issuer.
A significant decrease in residential or commercial property valuations or a
significant slowdown in Australian residential or commercial real estate
markets (including as a result of recent interest rate rises in Australia)
could result in a decrease in the amount of new lending the Issuer is able to
write and/or increase the losses that the Issuer may experience from existing
loans, which, in either case, could adversely impact the Issuer's financial
performance, financial position, capital resources and prospects.
Further, should the Issuer's regulators impose new supervisory measures
impacting the Issuer's residential or commercial lending or if Australian
housing price growth subsides or commercial property valuations decline, the
demand for the Issuer's home lending or commercial lending products may
decrease, which may adversely affect the Issuer's financial performance,
financial position, capital resources and prospects.
Disruption to financial markets
In recent years, global credit and equity markets have experienced periods of
uncertainty, followed by periods of stability and low volatility. More
recently, financial markets globally have been impacted by central bank
monetary policy (including raising interest rates), inflationary pressures,
expected slowing of global economic growth and the COVID-19 pandemic (see also
"Risk Factors - Credit Risk - The Coronavirus (COVID-19) pandemic and
similar events" for further details), which has seen governments and central
banks around the world implement both monetary and fiscal policy to reduce
volatility, manage inflation and maintain liquidity in financial markets,
whilst also promoting sustainable growth to severely impacted economies.
More recently the failure of a number of United States regional banks, as well
as the government bailout of Credit Suisse and subsequent merger with UBS in
March 2023, has caused disruption to wholesale funding markets and raised
concerns regarding the financial strength of some financial institutions.
Financial market stability relies on the flow of credit and investor
confidence, and as such any event, such as the failure of a bank, that
disrupts the flow of credit and reduces investor confidence can have adverse
impacts on financial markets in general (see also "Risk Factors - Funding and
Liquidity Risk"). Whilst the Issuer is under a different regulatory
environment and has different risk management practices than some of the
United States regional banks, the Issuer's performance can be influenced by
financial market instability and access to wholesale markets. In addition, the
Issuer sources deposits from a range of customers as part of the BOQ Group's
diversified funding base. As such, any disruption in financial markets that
either prevents the Issuer from accessing credit markets or reduces investor
and depositor confidence in the BOQ Group could impact either the BOQ Group's
financial performance, financial position, capital and liquidity resources and
prospects.
The uneven pace of global economic growth, environmental and social issues
(including emerging issues such as payroll compliance and modern slavery
risk), costs and availability of capital, central bank intervention,
inflationary pressures, increasing interest rates, shifts in global commodity
prices, consumer and business confidence, outlook and investment, risings
costs of living, the tightening labour markets, and the risk of asset bubbles
as a result of changing monetary and fiscal policy, all pose risks to global
financial markets.
There are also significant and ongoing global political and geopolitical
developments, or the consequences of such developments, that have the
potential to cause, or are causing, conflict and/or impact major global
economies, including the conflict between Russia and Ukraine (including the
sanctions against Russia which are also impacting the global economy, with
higher energy and commodity prices), diplomatic tensions between the Chinese
and Australian governments, geopolitical tensions in the Asia-Pacific region
and the introduction of tariffs and other protectionist measures by various
countries such as the United States and China (including as a result of
tensions between the United States and China). A shock to one of the major
global economies could result in currency and interest rate fluctuations,
operational disruptions and dislocation in financial markets that negatively
impact the BOQ Group.
Financial markets globally may also be disrupted by future biological hazards,
pandemics and contagious diseases.
Any such market and economic disruptions or a general weakening in the global
economy, could have an adverse effect on financial institutions such as the
BOQ Group because consumer and business confidence may decrease, unemployment
may rise and demand for the products and services the BOQ Group provides may
decline, thereby reducing the BOQ Group's earnings. These conditions, as well
as the increase in interest rates, may also affect the ability of its
borrowers to repay their loans, or the BOQ Group's counterparties to meet
their obligations, causing it to incur higher credit losses. These events
could also result in the undermining of confidence in the financial system,
reducing liquidity and impairing the BOQ Group's access to funding and
impairing its customers and counterparties and their businesses.
The nature and consequences of any such event, or combination of events, as
described above are difficult to predict and there can be no guarantee that
the BOQ Group could respond effectively to any such event. Any such event
and/or the effectiveness of the BOQ Group's response could adversely affect
the BOQ Group's financial performance, financial position, capital resources
and prospects.
Regulatory, legal and compliance risk
Regulation in Australia
As a financial services provider, the Issuer is subject to substantial
regulatory and legal oversight in Australia. The key regulatory bodies that
oversee the Issuer and its subsidiaries include APRA, the Australian
Securities and Investments Commission (ASIC), the Office of the Australian
Information Commissioner (OAIC), the Australian Transaction Reports and
Analysis Centre (AUSTRAC), the Australian Competition and Consumer Commission
(ACCC), the RBA, the Australian Securities Exchange (ASX) and the Australian
Taxation Office (ATO).
Increased public, political and regulatory scrutiny of the financial services
industry has resulted in an increase in changes to the laws and regulations
that the BOQ Group must comply with. In addition, regulation is becoming
increasingly extensive and complex and some areas of regulatory change involve
multiple jurisdictions seeking to adopt a coordinated approach or certain
jurisdictions seeking to expand the territorial reach of their regulation. For
example, the current political and regulatory environment that the BOQ Group
is operating in has also seen (and may in the future see) the Issuer's
regulators receive new powers. The nature and extent of these future changes
and impacts cannot be predicted with any certainty but the impact for the
Issuer is not likely to be greater than it is for any other financial
institution.
Laws and regulations have been passed that broaden the range of misconduct
that can attract a civil penalty. Regulators have also been increasing their
use of enforcement powers in relation to compliance with laws and regulations,
both new and existing. For example, ASIC can commence civil penalty
proceedings and seek significant civil penalties against an Australian
Financial Services licensee (such as the Issuer) for failing to do all things
necessary to ensure that financial services provided under the licence are
provided efficiently, honestly and fairly. This trend towards increasing
enforcement actions taken for failing to meet compliance obligations could
continue in the future and be expanded into other areas of regulation that the
BOQ Group is subject to.
Changes may also occur in the oversight approach of regulators, which could
result in a regulator preferring its enforcement powers over a more
consultative approach. In recent years, there have been significant increases
in the nature and scale of regulatory investigations, enforcement actions and
the quantum of fines issued by global regulators. Increased oversight from
regulators could result in increased costs to BOQ in meeting the requirements
or expectations of regulators, as well as increased risk of fines, penalties
or other sanctions being imposed on the Issuer.
APRA has stated that it will use enforcement where appropriate to prevent and
address serious prudential risks and hold entities and individuals to
account. The current environment may see a shift in the nature of
enforcement proceedings commenced by regulators. As well as conducting more
civil penalty proceedings, The Issuer's regulators may be more likely to bring
criminal proceedings against institutions and/or their representatives in the
future. Alternatively, regulators may elect to make criminal referrals to the
Commonwealth Department of Public Prosecutions or other prosecutorial bodies.
Regulatory powers to take enforcement action, coupled with the increasingly
active supervisory and enforcement approaches adopted by them, increases the
risk of adverse regulatory action being brought against the BOQ Group should
the Issuer fail to comply with any legal or regulatory obligations or respond
appropriately to regulatory change. Regulatory action brought against the BOQ
Group may expose the BOQ Group to an increased risk of litigation brought by
third parties such as the BOQ Group's customers and/or its shareholders
(including through class action proceedings), which may require the BOQ Group
to pay compensation to those third parties and/or undertake further
remediation activities. A negative outcome to regulatory investigations or
litigation involving the Issuer may impact the Issuer's reputation, divert
management time from operations and affect the BOQ Group's financial
performance and position, profitability and returns to investors.
The nature and impact of future changes are not predictable and are beyond the
Issuer's control. There is also a risk that regulators or the courts change
their interpretation of an existing law or regulation. There is operational
and compliance risk and cost associated with the implementation of any new or
changed laws and regulations, or changes to the interpretation of an existing
law or regulation, that apply to the Issuer as a financial institution. In
particular, changes to laws, regulations, industry codes, government policies
or accounting standards, including changes in interpretation or implementation
of laws, regulations, government policies or accounting standards could
adversely affect one or more of the BOQ Group's businesses and could require
the Issuer and/or the BOQ Group to incur substantial costs. Further impacts
include required levels, or the measurement, of bank liquidity and capital
adequacy (potentially requiring the Issuer to increase the levels and types of
capital held by the Issuer), limiting the types of financial services and
products that can be offered, and/or reducing the fees which banks can charge
on their financial services. APRA may introduce new prudential regulations or
modify existing regulations, including those that apply to the Issuer as an
authorised deposit-taking institution (ADI). Any such event could adversely
affect the business or financial performance of the BOQ Group. Any new or
amended rules may result in changes to the Issuer's capital adequacy ratio.
The Issuer is responsible for ensuring that it complies with all applicable
legal and regulatory requirements (including accounting standards, where
applicable, as well as rules and regulations relating to corrupt and illegal
payments and money laundering) and industry codes of practice (such as the
Banking Code of Practice), as well as meeting its ethical standards. The
failure to comply with applicable regulations could result in suspensions,
restrictions of operating licences, fines and penalties or limitations on its
ability to do business or requirement to undertake remediation programmes.
They could also have adverse reputational consequences. These costs, expenses
and limitations could have an adverse effect on the Issuer's and the BOQ
Group's financial performance, financial position, capital resources and
prospects. The legal and regulatory requirements described above could also
adversely affect the profitability and prospects of the Issuer and the BOQ
Group or their businesses to the extent that they limit the Issuer's and BOQ
Group's operations and flexibility of the Issuer's and BOQ Group's businesses.
The nature and impact of future changes in such requirements are not
predictable and are beyond the Issuer's and the BOQ Group's control.
Significant domestic and global legislative and regulatory developments and
industry reforms which will, or may, impact on the BOQ Group's operations in
Australia are further set out below. Depending on the nature, implementation
or enforcement of any regulatory requirements, they may have an adverse impact
on the Issuer's financial performance, financial position, capital resources
and prospects.
The nature, timing and impact of future regulatory reforms or changes are not
predictable, can be substantial and are beyond the BOQ Group's control. Such
changes can require the BOQ Group to significantly increase investments in
staff, systems and procedures to comply with the regulatory requirements.
Regulatory compliance and the management of regulatory change is an
increasingly important part of the BOQ Group's strategic planning. Regulatory
change may also impact the BOQ Group's operations by requiring it to have
higher levels, and better quality of capital as well as place restrictions on
the businesses the BOQ Group operates or require the BOQ Group to alter its
product or service offerings. If regulatory change has any such effect, it
could adversely affect one or more of the BOQ Group's businesses, restrict its
flexibility, require it to incur substantial costs and impact the
profitability of one or more of the BOQ Group's businesses.
The BOQ Group's regulators, including but not limited to ASIC, APRA, AUSTRAC
and the ACCC, also engage with the BOQ Group and may request certain
information from the BOQ Group or perform reviews of the BOQ Group's
operational risk, compliance arrangements or risk culture. During the
financial year ended 2022, the BOQ Group had numerous engagements with its
regulators and been subject to reviews, including by AUSTRAC.
In the financial year ending 2023 (FY23), the Issuer has regularly engaged
with its principal regulators, APRA, AUSTRAC and ASIC. Internal and external
reviews identified that a material uplift is required in respect of BOQ's
operational resilience, risk culture and AML/CTF Program (as defined below)
and compliance. In order to address the matters identified in these reviews,
the Issuer intends to undertake a multi-year Integrated Risk Program to
strengthen its non-financial resilience.
There is a risk that the Integrated Risk Program will not adequately achieve
the Issuer's objective. Further, there is a risk that the outcome of this
ongoing engagement with regulators will involve regulators imposing fines,
sanctions or taking other enforcement actions (including increased
supervision) in relation to the BOQ Group's compliance with relevant laws and
regulations.
Banking Executive Accountability Regime
The Treasury Laws Amendment (Banking Executive Accountability and Related
Measures) Act 2018 (Cth) (BEAR or BEAR Legislation) established accountability
obligations for ADIs and their senior executives and directors. The BEAR
Legislation applied to the Issuer from 1 July 2019.
Penalties may apply for breach of this legislation and the legislation may
impact the Issuer's ability to attract and retain high quality executives.
Financial Crime Obligations
The BOQ Group is subject to anti-money laundering and counter-terrorism
financing (AML/CTF) laws, anti-bribery and corruption laws, economic and trade
sanctions laws and tax transparency laws in the jurisdictions in which it
operates. These laws can be complex and, in some circumstances, impose a
diverse range of obligations. Specifically, under the Anti-Money Laundering
and Counter‑Terrorism Financing Act 2006 of Australia (AML/CTF Act) and the
Anti-Money Laundering and Counter Terrorism Financing Rules Instrument 2007
(No.1) of Australia (together, the Australian AML/CTF Laws) the BOQ Group must
have in place an AML/CTF program (the AML/CTF Program) specifying how the BOQ
Group complies with the Australian AML/CTF Laws. The primary purpose of the
AML/CTF Program is to identify, mitigate and manage the money laundering and
terrorism financing (ML/TF) risk the BOQ Group may reasonably face through the
provision of any designated service offered by any member of the BOQ Group.
The AML/CTF Program must consist of two parts, 'Part A' which defines how the
processes and procedures help identify, mitigate and manage ML/TF risks and
'Part B' which focuses on the procedures to identify customers and verify a
customer's identify before the Issuer can offer any designated services. The
BOQ Group, under its AML/CTF Program, is also required to conduct ongoing due
diligence on relevant customers and undertake periodic risk assessments. The
Australian AML/CTF Laws also require the Issuer to report certain matters and
transactions to AUSTRAC (including in relation to International Funds Transfer
Instructions, Threshold Transaction Reports and Suspicious Matter Reports) and
ensure that certain information is not disclosed to third parties in a way
that would contravene the 'tipping off' provisions in the Australian AML/CTF
Laws. The AML/CTF Program is to be reviewed regularly and must be regularly
independently reviewed.
Due to the volume of transactions that the BOQ Group processes, the undetected
failure or the ineffective implementation, monitoring or remediation of a
system, policy, process or control (including in relation to a regulatory
reporting obligation) could result in breaches of AML/CTF obligations. This in
turn could lead to significant monetary penalties. If the Issuer fails, or
where the Issuer has failed, to comply with these obligations, it could face
regulatory enforcement action such as litigation, significant fines, penalties
and the revocation, suspension or variation of licence conditions.
Non-compliance with financial crime obligations could also lead to litigation
commenced by third parties (including class action proceedings) and cause
reputational damage. These actions could, either individually or in aggregate,
adversely affect the Issuer's business, prospects, reputation, financial
performance or financial condition.
As previously noted in "Risk Factors - Regulatory, legal and compliance risk -
Regulation in Australia", AUSTRAC has raised concerns with the Issuer in
respect of its AML/CTF Program in FY23. The Issuer continues to engage with
AUSTRAC in relation to these concerns.
Consumer Data Right / Open Banking
The Australian Government passed legislation in August 2019 to establish a
"Consumer Data Right" (CDR) rules regime which seeks to improve consumers'
ability to compare and switch between products and services. The CDR regime is
being introduced in the banking sector in phases. These reforms (referred to
as Open Banking) are expected to reduce the barriers to new entrants into, and
increase competition in, the banking industry in Australia.
Ongoing competition for customers can lead to compression in profit margins
and loss of market share, which may ultimately impact the Issuer's financial
performance and position. Open Banking's regulatory timelines require changes
to the Issuer's operations and technology. There is a risk that the Issuer
does not achieve compliance with the set milestones for the complete
implementation of Open Banking or that the Issuer does not implement open
banking requirements in a compliant way. For example, the Issuer did not meet
the initial Phase 1, 2 or 3 compliance dates and received an infringement
notice from the ACCC in relation to non-compliance with the CDR Rules. ME also
sought a compliance exemption from the ACCC for a later compliance date for
initial Phases. Open Banking may also lead to cyber and fraud risks in the
CDR ecosystem. Governance mechanisms including accountabilities, controls and
frameworks are still evolving and, under the Open Banking regime, customer
data will be shared with a broader range of stakeholders. The significant
resources and management time required to implement Open Banking may also have
a flow-on effect, impacting the Issuer's timely implementation of other
regulatory reforms and its transformation agenda.
International regulation
There continues to be proposals and changes by global regulatory advisory and
standard-setting bodies, such as the International Association of Insurance
Supervisors, the Basel Committee on Banking Supervision (Basel Committee) and
the Financial Stability Board, which, if adopted or followed by domestic
regulators, may increase operational and capital costs or requirements (see
"Basel III" below for further information).
The BOQ Group's businesses may also be affected by changes to the regulatory
framework in other jurisdictions, including the cost of complying with
regulation that has extra-territorial application to the extent it is relevant
to the BOQ Group. These could include the Bribery Act 2010 (UK), FATCA (as
defined in "Taxation - Foreign Account Tax Compliance Act"), General Data
Protection Regulation (EU), Dodd-Frank Wall Street Reform (US) and Consumer
Protection Act 2010 (US) and other reforms.
There has also been increased regulator expectation and focus in relation to a
number of other areas such as privacy and security of data, data quality and
controls, governance and culture and conduct. Changes in international
regulation could increase costs and/or restrict the Issuer from operating in
certain businesses, which could adversely impact the Issuer's financial
performance, financial position, capital resources and prospects.
Regulatory review and investigations
From time to time, the Issuer may be exposed to regulatory reviews or
investigations (including those identified in "Risk Factors - Regulatory,
legal and compliance risk - Regulation in Australia"). The nature of those
reviews and investigations are wide ranging and, for example, include a range
of matters including responsible lending practices, risk governance,
operational risk, compliance and risk culture, product suitability, and
conduct in financial markets and capital markets transactions.
Although the Issuer intends to comply with all regulatory reviews and
investigations, the outcomes of these reviews and investigations are
uncertain. If any of these reviews lead to legislative or other regulatory
change, this could have an impact on the Issuer's business. In addition,
enforcement action may result in fines, remediation or other regulatory action
or reputation impacts, which could have an adverse impact on the overall
financial position and performance of the Issuer.
Basel III
Basel III is a comprehensive set of reform measures, developed by the Basel
Committee, to strengthen the regulation, supervision and risk management of
the banking sector globally.
The International Standards for Basel III have now been finalised and
following this, APRA released its final requirements in relation to capital
adequacy and credit risk capital requirements for ADIs in November 2021 for
implementation from 1 January 2023 (the APRA capital reforms).
The APRA capital reforms follow the consultation process that began in
February 2018 when APRA released a consultation paper regarding proposed
changes to the capital framework for ADIs, and was finalised in December 2021
with the release of new standards for adoption from 1 January 2023.
Significant aspects of APRA's final requirements include but are not limited
to greater alignment with internationally agreed Basel standards relating to
non-residential mortgages exposures, introduction of the Basel II capital
floor, the implementation of more risk-sensitive risk weights for residential
mortgage lending, improving the flexibility of the capital framework through
the introduction of a default level of the countercyclical capital buffer and
increasing the capital conservation buffer for Internal Ratings Based (IRB)
ADIs, improving the transparency and comparability of ADIs' capital ratios and
implementing a minimum leverage ratio for IRB ADIs at 3.5 per cent.
The Basel Committee continue to meet regularly to assess risks and
vulnerabilities to the global banking system which includes evaluating the
effectiveness of Basel III reforms. During the fourth quarter of 2022, the
Basel Committee published reports on the Basel III reforms and buffer
useability considering the COVID-19 pandemic experience. These reports may
give rise to further international policy developments, with APRA retaining
full discretion whether to implement and on what time frame to implement any
international policy developments to its prudential framework.
The capital frameworks that the BOQ Group operates under have been recently
reviewed in light of the Basel III APRA capital reforms, which came into
effect on 1 January 2023. Changes to regulatory frameworks and the requirement
of the Issuer to hold more capital can have an adverse impact on the BOQ
Group.
Regulatory fines and sanctions
The increased regulatory focus on compliance and conduct risk and the upward
trend in fines and enforcement actions imposed by, and settlement sums agreed
with, regulators, means that these risks continue to be an area of focus for
the Issuer. The Issuer is overseen by a number of regulators, including APRA,
ASIC, AUSTRAC, ACCC, the Office of the Australian Information Commissioner
(OAIC), the Banking Code Compliance Committee (BCCC), the RBA and the ASX.
These regulators could take enforcement action against the Issuer for
compliance breaches, including by imposing fines, penalties and sanctions.
In particular, the risk of non-compliance with anti-money laundering and
counter-terrorist financing, bribery and sanction laws remains high given the
current environment in which the Issuer operates and the increased focus by
regulators and law enforcement agencies on how banks comply with these laws. A
failure to develop and implement a robust program to combat money laundering,
bribery and terrorist financing or to ensure compliance with economic
sanctions could have serious legal and reputational consequences for the
Issuer and its employees. Consequences can include fines, criminal and civil
penalties (including custodial sentences), civil claims, reputational harm and
possible limitations or amendments to banking licences and limitations on
doing business in certain jurisdictions, as well as costs to remediate and
uplift compliance processes and controls as well as increased aggregate costs
of remediation.
Customer remediation risk
Operational risk, technology risk, conduct risk or compliance risk events have
required, and could in the future require, the Issuer to undertake customer
remediation activity. The Issuer relies on a large number of policies,
processes, procedures, systems and people to conduct its business. Breakdowns
or deficiencies in one of these areas (arising from one or more operational
risk, technology risk, conduct risk or compliance risk events) have resulted,
and could in the future result in, adverse outcomes for customers which the
Issuer is required to remediate.
These events could require the Issuer to incur significant remediation costs
(which may include compensation payments to customers, costs associated with
correcting the underlying issue and costs associated with obtaining assurance
that the remediation has been conducted appropriately) and result in
reputational damage.
There are significant challenges and risks involved in customer remediation
activities. The Issuer's ability to quickly and accurately investigate an
adverse customer outcome that may require remediation could be impeded if the
issue is a legacy matter spanning beyond the Issuer's record retention period,
if the Issuer's record keeping and data is otherwise inadequate or if there
are multiple matters to be investigated and remediated at the same time.
Depending on the nature of the issue, it may be difficult to quantify and
scope the remediation activity.
Determining how to quickly, properly and fairly compensate customers can also
be a complicated exercise involving numerous stakeholders, such as the
affected customers, regulators and industry bodies. The Issuer's proposed
approach to a remediation may be affected by a number of events, such as a
group of affected customers commencing class action proceedings on behalf of
the broader population of affected customers, or a regulator exercising their
powers to require that a particular approach to remediation be taken. The
Issuer's ability to quickly remediate customers could also be impeded by
having multiple matters to remediate at the same time and/or having
insufficient resources to perform remediation. These factors could impact the
cost of, and timeframe for, completing the remediation activity, potentially
resulting in the Issuer failing to execute the remediation in a timely manner.
A failure of this type could lead to a regulator commencing enforcement action
against the Issuer or result in customer or class action litigation against
the Issuer. The ineffective or slow completion of a remediation also exposes
the Issuer to reputational damage, with the Issuer potentially being
criticised by regulators, affected customers, the media and other
stakeholders.
The significant challenges and risks involved in scoping and executing
remediations in a timely way also create the potential for remediation costs
actually incurred to be higher than those initially estimated by the Issuer.
If the Issuer cannot effectively scope, quantify or implement a remediation
activity in a timely way, there could be an adverse impact on the Issuer's
financial performance, financial position, capital resources and prospects.
Failure of risk management strategies
There is a risk that the Issuer implements risk management strategies and
internal controls that do not identify, assess, measure, monitor, report and
mitigate current risks or those that develop in the future, or controls do not
operate effectively. The complexity of legacy systems and manual nature of
some of the BOQ Group's processes presents additional complexity for the BOQ
Group to improve its risk management framework and practices and strengthen
its risk culture.
There is a risk that the Issuer fails to have or develop an organisational
culture that supports a mature risk culture. This includes the risk that the
Issuer does not sufficiently improve the maturity of its risk behaviours and
architecture and that its framework and practices fail to achieve early
identification and accountability of current and future risks.
Furthermore, there is a risk that the improvements to the Issuer's risk
management framework and capabilities and/or the strengthening of its risk
culture does not achieve the anticipated benefits or does not strengthen the
Issuer's financial and operating resilience or risk culture, or that it does
not meet regulator requirements or expectations.
If any of the BOQ Group's risk management processes and procedures prove
ineffective or inadequate, including by failing to identify risks early, not
allocating accountability in a timely manner or are otherwise not
appropriately implemented, the BOQ Group could suffer unexpected losses,
reputational damage and increased costs to meet regulators' expectations which
could adversely impact the BOQ Group's financial performance, financial
position, ability to pay future dividends or capital distributions, capital
resources and prospects.
Mergers, acquisitions and divestments
The Issuer regularly considers a range of corporate opportunities, including
acquisitions, divestments, joint ventures and investments and accordingly the
Issuer may engage in merger, acquisition or divestment activities which
facilitate the Issuer's strategic direction.
These activities may involve entering new markets, exiting products and/or
offering third party manufactured products or expanding the BOQ Group's
current product suite and may affect the BOQ Group's risk profile through
changes to, or to the relative importance of, the geographies and/or product
types to which it has exposures. Whilst the Issuer recognises that benefits
may arise from merger, acquisition or divestment activities, significant risks
exist in both the execution and implementation of such activities.
It is likely that the Issuer would raise additional debt or raise equity to
finance any major merger or acquisition and this would cause the Issuer to
face the financial risks and costs associated with additional debt or equity.
Where the Issuer decides to divest a business or asset, this may involve a
loss against book value, particularly of any goodwill or other intangibles and
may require the Issuer to provide certain warranties and indemnities.
Changes in ownership and management may result in impairment of relationships
with employees and customers of the acquired and existing businesses.
Depending on the type of transaction, it could take a substantial period of
time for the Issuer to realise the financial benefits of the transaction, if
any.
Any acquisition or divestment may result in a material positive or negative
impact on the BOQ Group's financial position, including reported profit and
loss and capital ratios. There can be no assurance that any acquisition (or
divestment) would have the anticipated positive results, including results
relating to the total cost of integration (or separation), the time required
to complete the integration (or separation), the amount of longer-term cost
savings, or synergies, the overall performance of the combined (or remaining)
entity, or an improved price for the Issuer's securities. The Issuer's
operating performance, risk profile and capital structure may be affected by
these corporate opportunities and there is a risk that the Issuer's credit
ratings may be placed on credit watch or downgraded if these opportunities are
pursued.
Integration (or separation) of an acquired (or divested) business can be
complex and costly, sometimes including combining (or separating) relevant
accounting and data processing systems, and management controls, as well as
managing relevant relationships with employees, customers, regulators,
counterparties, suppliers and other business partners. Integration (or
separation) efforts could create inconsistencies in standards, controls,
procedures and policies, as well as diverting management attention and
resources. This could adversely affect the Issuer's ability to conduct its
business successfully and impact the Issuer's operations, reputation,
financial performance, financial position, capital resources and prospects.
Additionally, there can be no assurance that employees, customers,
counterparties, suppliers and other business partners of newly acquired (or
retained) businesses will remain post-acquisition (or post-divestment), and
the loss of employees, customers, counterparties, suppliers and other business
partners could adversely affect the Issuer's operations, reputation, financial
performance, financial position, capital resources and prospects.
ME Integration
In July 2021, the Issuer completed the acquisition of Members Equity Bank
Limited (ACN 070 887 679) (ME). While significant progress has been completed
to date on integration of the ME business, this is not yet complete and the
Issuer still faces the risk that integration may take longer, be more
complex or cost more than expected, encounter unexpected challenges or issues
particularly in integrating technology and merging operations, divert
management attention, cause customer churn or cultural issues which may result
in loss of key employees or that the anticipated benefits and synergies of the
integration may be less than estimated or less than expected by the market.
Any failure to achieve the targeted synergies of integration may impact the
financial performance, operation and position of the BOQ Group and the future
price of the Issuer's shares.
The Coronavirus (COVID-19) pandemic and similar events
On 11 March 2020, the World Health Organisation declared a pandemic following
the emergence in China, and subsequent spread to the rest of the world, of a
severe acute respiratory illness caused by a novel coronavirus (COVID-19). The
COVID-19 pandemic has had an adverse impact on global, national and regional
economies and caused disruption to trade and business activities within
Australia and globally.
During the peak of the crisis, governments worldwide, including the Australian
Government, enacted wide ranging restrictions on, suspensions of, or advice
against, regional and international travel, large gatherings of people as well
as prolonged closures of workplaces which had a substantial negative impact on
economic and business activity. While certain restrictions have been lifted or
modified, governments may in the foreseeable future reintroduce prior
restrictions or implement and introduce further measures to contain the spread
of the COVID-19 pandemic (including as a result of further variants or
outbreaks) to limit adverse health outcomes.
Similar risks are also applicable to any future pandemic.
Governments and central banks also took increased measures to stabilise the
financial markets, however if such actions prove to be unsuccessful in
mitigating economic disruption and/or the COVID-19 pandemic is prolonged
(including as a result of further variants or outbreaks) the negative impact
on global economies could continue. Despite government measures and assistance
introduced to limit the severity of the impact of COVID-19 on businesses and
individuals, including those support measures provided by the Issuer to its
customers, there is the continued risk that the COVID-19 pandemic (including
future variants), or other outbreaks or pandemics, will cause customers to
experience an adverse financial situation thereby exposing the BOQ Group to an
increased risk of reduced customer demand for the Issuer's products and
services and higher credit risk of customers failing to meet their
obligations. The support provided by the Issuer throughout the COVID-19
pandemic has had, and may continue to have, a negative impact on the Issuer's
financial performance and may see the Issuer assume greater risk than it would
have normally. There is also the risk that future government or regulator
intervention to support the economy may be required to be supported by banks
(including the Issuer).
In response to the COVID-19 pandemic, the Issuer implemented, and may need to
implement in the future, for either COVID-19 or other pandemics or similar
events, new measures within a short timeframe. Such actions increase the risk
of operational and compliance shortcomings, potentially leading to adverse
impacts on the Issuer's financial performance, customer service or regulator
and/or legal action.
In addition, the COVID-19 pandemic has disrupted numerous industries and
global supply chains leading to shortages of materials and labour and/or costs
increases. There is the risk that these disruptions continue to occur
(including as a result of new variants) and impact the provision of services,
activities and products delivered to the BOQ Group by third party vendors and
in turn possibly negatively impact the timelines of strategic projects.
With respect to the potential future impacts of the COVID-19 pandemic on the
Issuer's financial performance, any adjustment or provisioning made by the
Issuer to reflect the impact of COVID-19 is based on circumstances that
continue to evolve, making any definitive assessment difficult. There is a
risk that the assessments or stress testing used by the Issuer to determine
any forward-looking adjustments prove to be subsequently incorrect with the
impact on the BOQ Group's financial performance or position materially
different to that forecasted. Similarly, those effects are proving to have a
broader impact on the economy due to inflationary pressures.
All of the above, together with any other epidemics or pandemics that may
arise in the future, have the ability to impact the BOQ Group's financial
performance, financial position, capital resources and prospects.
Climate change risk
The Issuer, its customers and external suppliers, may be adversely affected by
physical, transition and liability risks of climate change (including the
possibility of destruction or disruption to human life, physical and natural
capital and socioeconomic impacts to liveability, food systems and
infrastructure assets).
Physical risks could include longer term chronic changes in climate such as
droughts and increases in sea levels as well as acute changes to the frequency
and magnitude of extreme weather events, such as floods, storms, heat waves
and the occurrence of fires. These effects, whether acute or chronic in
nature, may directly impact the Issuer and its customers through damage to
assets and property, business disruption and changes to income and costs,
changes to asset values and liquidity, changes to cost and availability of
insurance and may have an adverse impact on financial performance (including
through an increase in defaults on customers' loans).
Initiatives to mitigate or respond to adverse impacts of climate change may
result in transition risks, related to changes to domestic and international
policy regulatory settings, market and asset prices, economic activity,
technological innovation and customer behaviour, particularly in geographic
locations and industry sectors adversely affected by these changes. Liability
risks could stem from the Issuer or its clients experiencing litigation,
regulatory enforcement or reputational damage as a result of climate change.
Failure of the Issuer to effectively assess and respond to the risks of
climate change (including transition to a low carbon footprint) or to be
perceived as failing to do so, could adversely affect the Issuer's reputation
which in turn could adversely affect Issuer's financial performance, financial
position, capital resources and prospects.
In addition, natural disasters as a result of climate change such as (but not
restricted to) cyclones, floods and earthquakes, and the economic and
financial market implications of such disasters on domestic and global market
conditions could adversely impact the Issuer's financial performance,
financial position, capital resources and prospects.
Environmental and social risks
The Issuer and its customers operate businesses and hold assets in a diverse
range of sectors, asset types and geographical locations. The Issuer may
suffer losses due to the impacts of hostile, catastrophic or unforeseen events
including due to environmental and social factors.
Environmental events could include natural disasters such as (but not
restricted to) cyclones, floods, earthquakes, extreme weather events (such as
drought and floods), biodiversity loss, fire and release of toxic substances
which given climate change, are growing risks to both the Issuer and the
Australian and global economies.
Geopolitical risks including those arising from conflicts, trade tension,
terrorist attacks, military conflict, sanctions and acts of civil or
international hostility are also increasing. For example, the continued
conflict between Russia and Ukraine which escalated in February 2022 has the
potential to escalate further, including as a result of measures taken against
Russia by other countries, resulting in elevated geopolitical instability,
trade restrictions, disruptions to global supply chains and commodity markets,
increases in energy prices and a potential adverse impact in markets and a
general downturn in the global economy. Any deterioration in global markets
can result in currency and interest rate fluctuations and operational
disruptions that can negatively impact the BOQ Group.
Further, the deteriorating relations between Taiwan and China also have the
potential to have a material impact on the global manufacturing supply chain,
which in turn can lead to a deterioration in global economies and/or cause
operational disruptions to the BOQ Group and/or its customers.
All of these risks have the ability to disrupt business activities, affect
supply chain, impact operations or reputation, increase credit risk or
exposures, affect value of assets or impact ability to recover amounts owing
to the Issuer.
The Issuer also faces increasing public scrutiny, laws and regulations related
to environmental and social factors and a failure to act responsibly in a
number of areas such as diversity, corporate governance, modern slavery and/or
to manage these risks and respond appropriately could adversely impact the
Issuer's reputation and financial performance.
Funding and liquidity risk
Financial institutions (including the BOQ Group) are currently subject to
global credit and capital market conditions, which experienced extreme
volatility, disruption and decreased liquidity following the global financial
crisis, the COVID-19 market disruptions and the more recent United States
regional bank failures. Global credit and capital market conditions rely on
the flow of credit and investor confidence. As such, any event that disrupts
the flow of credit, or reduces investor confidence can have a material impact
on the Issuer's funding and liquidity levels. In addition, the Issuer relies
on deposits provided by natural persons, small to medium enterprises,
non-financial corporates and financial corporates as a vital funding tool.
Whilst the Issuer has a diversified funding base, any loss in confidence from
depositors as to the financial stability of the Issuer could have a material
adverse impact on both the Issuer's funding and liquidity levels.
The recent events in the United States involving the Silicon Valley Bank and
Signature Bank and their placement into receivership with the Federal Deposit
Insurance Corporation (FDIC) has created bank-specific and broader financial
institution liquidity risk and concerns.
Although the Department of the Treasury, the Federal Reserve, and the FDIC in
the United States have jointly released a statement that depositors at Silicon
Valley Bank and Signature Bank would have access to their funds, even those in
excess of the standard FDIC insurance limits, future adverse developments with
respect to specific financial institutions or the broader financial services
industry may lead to market-wide liquidity shortages. The failure of any
international bank may increase the possibility of a sustained deterioration
of international financial market liquidity, or illiquidity at clearing, cash
management and/or custodial financial institutions.
If other international banks and financial institutions enter receivership or
become insolvent in the future in response to financial conditions affecting
the banking system and financial markets, this could affect the way the Issuer
conducts its business and its ability to access capital.
In addition, if market conditions deteriorate due to economic, financial,
political, health or other reasons which may increase competition for funding,
the BOQ Group's funding costs may be adversely affected, and its ability to
raise funding for lending activities and to maintain adequate liquidity levels
may be constrained. There is no assurance that the BOQ Group will be able to
obtain adequate funding at acceptable prices or at all, leading to an
inability to maintain sufficient liquidity levels or to fund balance sheet
growth in a timely and cost-effective way.
Funding and liquidity risk is the risk that the BOQ Group, although balance
sheet solvent, cannot meet or generate sufficient cash resources to meet its
payment obligations in full as they fall due, or can only do so at materially
disadvantageous terms, including incurring a loss on a forced asset sale.
Funding risk can occur due to an increase in competition for funding, or a
change in risk premiums required by investors, which cause an increase in
funding costs or increased difficulty accessing funding markets. The BOQ Group
mitigates this risk by sourcing a diversified investor base through a number
of different funding programmes in a number of different markets.
Additionally, the BOQ Group's 'Contingency Funding Plan' is used to manage
this risk.
The Issuer maintains a portfolio of high quality, diversified liquid assets to
facilitate balance sheet liquidity needs and meet internal and regulatory
requirements. Post the Committed Liquidity Facility handback, the Issuer has
become more concentrated in High Quality Liquid Assets. The Issuer raises
funding from a variety of sources, including customer deposits and wholesale
funding in Australia and offshore markets to meet its funding obligations and
to maintain or grow its business generally. If confidence in the Issuer is
damaged and the Issuer's sources of funding prove to be insufficient or so
expensive as to be uncompetitive, it may be forced to seek alternative funding
arrangements or curtail its business operations and limit loan growth. The BOQ
Group may also experience challenges in managing its capital base, which could
give rise to greater volatility in capital ratios. The ability for the Issuer
to secure alternative funding will depend on a variety of factors, including
prevailing market conditions, the availability of credit and the Issuer's
credit ratings.
The financial performance of the BOQ Group may also be significantly impacted
by changes in monetary policy both in Australia and globally through the
impact of broader economic conditions, as well as actions taken by central
banks. The actions of central banks, such as interest rate settings and
quantitative easing, can potentially impact the BOQ Group's access to funding
markets, liquidity levels, cost of funding, margin on products and, as a
result, could adversely impact the BOQ Group's financial performance,
financial position, capital resources and prospects.
Challenges in managing capital base
The Issuer's capital base is critical to the management of its businesses and
access to funding. The Issuer is required by APRA to maintain adequate
regulatory capital determined by its risk profile. Capital risk is the risk
that the Issuer does not hold sufficient capital and reserves to achieve
strategic plans, cover exposures and to protect against unexpected losses, and
to meet market expectations and regulatory requirements, both in normal
operating environments or stressed conditions.
If the information or the assumptions upon which the BOQ Group's capital
requirements are assessed prove to be inaccurate, this may adversely impact
the BOQ Group's operations, financial performance and financial position.
Under current regulatory requirements, risk-weighted assets and expected loan
losses increase as a counterparty's risk grade worsens. These additional
regulatory capital requirements compound any reduction in capital resulting
from increased provisions for loan losses and lower profits in times of
stress. As a result, greater volatility in capital ratios may arise and may
require the Issuer to raise additional capital. There can be no certainty that
any additional capital required would be available or could be raised on
reasonable terms. Capital constraints could restrict the Issuer's ability to
pay dividends (or pay a dividend below market expectations) or capital
distributions, threaten financial viability and increase risk of regulatory
intervention.
Regulatory change has led banks to progressively build capital and management
buffers have been built to assist maintaining capital adequacy during stressed
times and in preparation for the implementation of APRA's finalised Capital
Framework which came into effect on 1 January 2023. Changes to regulatory
frameworks and the requirement of the Issuer to hold more capital can have an
adverse impact on the BOQ Group. Ineffective capital management could result
in a negative impact on the BOQ Group's capital levels and potential
regulatory action or enforcement should the BOQ Group not meet minimum
regulatory requirements.
Credit ratings risk
Credit ratings are opinions on the BOQ Group's creditworthiness. Credit rating
agencies may withdraw, revise or suspend credit ratings or change the
methodology by which companies are rated. The BOQ Group's credit ratings
affect the cost and availability of its funding from capital markets and other
funding sources and they may be important to customers or counterparties when
evaluating its products and services. Therefore, maintaining high quality
credit ratings is important.
The credit ratings assigned to the BOQ Group and its subsidiaries by rating
agencies are based on an evaluation of a number of factors, including
financial strength, support from members of the BOQ Group and structural
considerations regarding the Australian financial system. A credit rating
downgrade could be driven by the occurrence of one or more of the other events
identified as risks in this section of the Base Prospectus or by other events,
including changes to the methodologies used by the rating agencies to
determine ratings.
If the Issuer fails to maintain its current credit ratings, this could
adversely affect the BOQ Group's cost of funds and related margins,
competitive position and its access to capital and funding markets. This could
adversely affect the BOQ Group's businesses, financial performance, liquidity,
capital resources, financial condition and prospects. The extent and nature of
these impacts would depend on various factors, including the extent of any
ratings change, whether the ratings of the Issuer differ among agencies (split
ratings) and whether any ratings changes also impact the BOQ Group's peers or
the banking and insurance sectors more generally.
Market risk
The BOQ Group is exposed to market risk as a consequence of both its
investments and trading activities in financial markets and through the asset
and liability management of its balance sheet. The BOQ Group is exposed to
losses arising from adverse movements in levels and volatility of market
factors, including interest rates, foreign exchange rates, equity prices and
credit spreads.
The BOQ Group, through its investment portfolios, is exposed to risk and
volatility in the markets, securities and other assets in which it invests.
Those risks include, but are not limited to:
· Interest rate risk arising from a variety of sources, including
mismatches between the repricing periods of assets and liabilities and the
investment of the low cost deposit and capital portfolio. As a result of these
mismatches, movements in interest rates (including material increases as
central banks such as the Reserve Bank of Australia (the RBA) unwind
stimulatory monetary policy settings) may affect earnings or the value of the
BOQ Group;
· Currency risk is the risk of loss of earnings or reduction in asset
values due to adverse movements in foreign exchange rates;
· Basis risk arising where the cash rate and bank bill rates do not
move in tandem which arises primarily from variable retail assets repricing
off the cash rate whilst the wholesale funding liabilities price off the bank
bill rates. As a result of these mismatches between the base rate that assets
price off and the base rate that liabilities price off, movements in basis
markets may affect earnings or the value of the BOQ Group;
· Asset/liability risk is the risk that the value of an investment
portfolio will decrease relative to the value of the liabilities as a result
of fluctuation in investment factors including share prices, interest rates,
credit spreads, counterparty default, exchange rates or commodity prices; and
· Liquidity risk including that assets cannot be sold without a
significant impairment in value.
Such risks can be heightened during periods of high volatility, market
disruption and periods of sustained low interest rates and if the BOQ Group
was to suffer substantial losses due to any market volatility, it could
adversely affect the BOQ Group's financial performance, financial position,
capital resources and prospects.
Operational risk
Operational risk is the risk of loss, other than those captured in the credit
and market risk categories, resulting from inadequate or failed internal
processes, people or systems (including information security systems), or from
external events.
The BOQ Group is exposed to a variety of risks including those arising from
process error, fraud, technology failure, security and physical protection,
franchise agreements entered into with owners of the Owner Managed Branches
(OMBs), customer services, staff skills, workplace safety, compliance,
business continuity, crisis management, processing errors, mis-selling of
products and services and performance and product development and maintenance.
Financial crime, in particular, is an inherent risk within the financial
services industry. In response to the COVID-19 pandemic, a proportion of the
Issuer's workforce commenced working from home, with the number of employees
working from home continuing to be higher than prior to the onset of the
COVID-19 pandemic, with flexible working arrangements likely to continue. This
exposes the Issuer to additional operating risk, including increased risk of
fraud, technology and related risks and employee health and safety risks and
the Issuer may suffer financial loss if the Issuer fails to monitor, detect
and control potentially suspicious financial crime activity.
The Issuer manages these operational risks through appropriate reporting
lines, defined responsibilities, policies and procedures and an operational
risk framework incorporating regular risk monitoring and reporting by each
business unit. Operational risks are documented in centralised risk databases
which provide the basis for business unit and bank-wide risk profiles, the
latter being reported to the BOQ Group's Risk Committees on a regular basis.
Although these steps are in place, there is no guarantee that the BOQ Group
will not suffer loss as a result of these risks (and an inherent risk also
exists due to systems and internal controls failing to identify or prevent
losses relating to these operational risks). Such losses can include fines,
penalties, loss or theft of funds or assets, customer compensation, loss of
shareholder value, reputational losses, loss of life or injury to people and
loss of property and information. Loss from such risks could affect the BOQ
Group's financial performance, financial position, capital resources and
prospects.
The BOQ Group includes a number of subsidiaries that are trading entities.
Dealings and exposures between the members of the BOQ Group (which principally
arise through the provision of administrative, corporate and distribution
services, as well as through the provision of funding and equity
contributions) also give rise to a risk of loss to the Issuer.
Reputation risk
Reputation risk may arise through the actions of the Issuer or other financial
services market participants and adversely affect perceptions of the Issuer
held by the public, holders of its securities, regulators or rating agencies
or political bodies such as government. These actions could include
inappropriately dealing with conflicts of interests, pricing policies,
compliance with legal and regulatory requirements, ethical issues, conduct
risk issues, litigation, compliance with anti-money laundering laws and laws
to prevent financial crime, employment laws, compliance with trade sanctions
legislation, compliance with privacy laws, information security policies,
sales and trading practices, technology failures, security breaches and risk
management failures. Damage to the Issuer's reputation may have an adverse
impact on the Issuer's financial performance, financial position, capital
resources and prospects. This is in addition to any regulatory sanctions that
may be imposed from the same conduct or issues.
Changes in technology
In order to continue to deliver new products and better services to customers,
comply with regulatory obligations (such as obligations to report certain data
and information to regulators) and meet the demands of customers in a highly
competitive banking environment, the Issuer needs to regularly renew and
continually enhance its technology.
Currently there are strategic technology programs underway as part of the
Issuer's digital transformation across the Issuer's retail, business bank and
supporting infrastructure, that are critical to delivery of the Issuer's
overarching strategy to simplify and modernise its technology infrastructure,
application and operations environment. These programs comprise both
maintenance and remedial activity to ensure the Issuer's technology
environment remains compliant, secure and stable, and transformational
activity to drive customer growth and improve efficiency.
Failure to successfully deliver these programs could result in substantial
cost overruns, unrealised productivity, additional operational and system
costs, failure to meet compliance obligations, reputational damage and/or
result in the loss of market share to competitors.
The delivery, non-delivery or delayed delivery of these strategic programs can
have a direct impact on the BOQ Group's financial performance.
Cyber security risks
The Issuer is highly dependent on information systems and technology, a number
of which are outsourced or provided by third parties. Therefore, there is a
risk that these, or the services the Issuer uses or is dependent upon
(including those provided by third parties), might fail, including because of
unauthorised access or use. Most of the Issuer's daily operations are
computer-based and information systems applications and technology are
essential to maintaining effective communications with customers. The Issuer
is also conscious that threats to information systems applications and
technology are continuously evolving and cyber threats and risk of attacks are
increasing due to increased use of the internet and telecommunications to
conduct financial transactions, growing sophistication of attackers and global
increase in cyber crime. A number of recent examples have occurred in
Australia.
Cyber security means protecting the cyber environment and information from
threats including unauthorised access, use, disclosure, disruption,
modification, perusal, inspection, recording or destruction. By its nature,
the Issuer handles a considerable amount of personal and confidential
information about its customers. The exposure to systems risks include the
complete or partial failure of information technology systems due to, among
other things, failure to keep pace with industry developments and the capacity
of the existing systems to effectively accommodate growth, prevent
unauthorised access and integrate existing and future acquisitions and
alliances, such as the acquisition of ME. There is a risk that information and
data may be inadvertently or inappropriately accessed or distributed or
illegally accessed or stolen. This could be a direct attack on the Issuer or
an attack on one the Issuer's third party suppliers who manage the Issuer's
data or have access to the Issuer's information systems, applications or
technology.
To manage these risks, the Issuer employs a cyber security team which is
responsible for the development and implementation of the Issuer's information
security policies, operational procedures and cyber security specialist
partners. The Issuer is conscious that threats to cyber security are
continuously evolving and as such the Issuer conducts regular internal and
external reviews to ensure new threats are identified, evolving risks are
mitigated, policies and procedures are updated and good practice is
maintained. However, the Issuer may not be able to anticipate all attacks as
they may be dynamic in nature or implement effective measures to prevent or
minimise disruptions that may be caused by all cyber threats because the
techniques used can be highly sophisticated and those perpetuating the attacks
may be well resourced.
As there can be no guarantee that the steps taken by the Issuer to manage the
risks will be fully effective, any failure of these systems or a successful
cyberattack could result in a number of potential consequences including
business interruption, damage to technology infrastructure, loss of data or
information, customer dissatisfaction, legal or regulatory breaches and
liability including fines or penalties, loss of customers, financial
compensation or remediation, class actions and need for significant additional
resources to modify and enhance the Issuer's systems and investigate and
remediate any incidents.
All of these consequences could have regulatory impacts, cause damage to the
Issuer's reputation and/or a weakening of the Issuer's competitive position,
which could adversely impact the Issuer's financial performance, financial
position, capital resources and prospects.
Failure to recruit and retain key executives, employees and directors
The Issuer's ability to attract and retain qualified and skilled executives,
employees and directors is critical to the success of the Issuer's business
and its pursuit of its strategic objectives. The success of the Issuer's
recruitment and retention practices, remuneration and talent and success
planning will have an impact on the Issuer's ability to attract and retain
qualified and skilled employees. The unexpected departure of an individual in
a key role, or the Issuer's failure to recruit and retain appropriately
skilled and qualified persons into these roles, could each have an adverse
effect on the Issuer's ability to operate its business efficiently, its
ability to execute on its strategy, its prospects, reputation, financial
performance or financial condition. It may also have an impact on the BOQ
Group's ability to maintain an effective risk management framework.
Emerging risks include low unemployment, reduced migration levels of skilled
workers, new flexible ways of working, introduction of AI, wages pressure and
a highly competitive talent market (with competition from both within and
outside of financial services), which are all having a significant impact on
the ability of the BOQ Group to hire and retain qualified and skilled
employees. This may result in the BOQ Group having to pay employees at or
above market levels which in turn could have adverse impacts on the Issuer's
financial performance, financial position, capital resources and prospects.
Breach of industrial practices
Failure by an employer to comply with relevant employment laws, awards or
enterprise agreements can lead to potential regulatory investigations or
enforcement actions or other civil or criminal fines or penalties. As
disclosed on 29 September 2020, the Issuer identified irregularities in
superannuation payments and potential underpayment and entitlement issues
relating to employees employed under the 2010, 2014 and 2018 Enterprise
Agreements.
While the Issuer has undertaken significant work, with the assistance of
external third parties, to estimate the likely costs to remediate any
underpayments plus associated costs, the work and analysis, together with
ongoing engagement with the Fair Work Ombudsman (FWO) and Financial Services
Union, will continue throughout 2023 or longer depending on any enforcement
action. Accordingly, there is a risk that the full impact may differ from the
amount for which the Issuer has currently provisioned. Given the time required
to undertake this work and the FWO deliberations, it is not yet possible to
fully determine what enforcement action, if any, FWO may take but could
include an enforceable undertaking.
There is also a risk of further regulatory enforcement action and associated
penalty payments in relation to these underpayments for which the Issuer has
included an estimate in the current provision.
Changes to accounting policies and/or methods in which they are applied may
adversely affect the Issuer's business, operations and financial condition
The accounting policies and methods that the Issuer applies are fundamental to
how it records and reports its financial position and results of operations.
Management of the Issuer must exercise judgment in selecting and applying many
of these accounting policies and methods as well as estimates and assumptions
applied so that they not only comply with generally accepted accounting
principles, but they also reflect the most appropriate manner in which to
record and report on the financial position and results of operations.
These estimates and associated assumptions are based on historical experience
and various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making the judgements
about carrying values of assets and liabilities that are not readily apparent
from other sources. Actual results may differ from these estimates.
Insurance risk
The BOQ Group maintains insurance that it considers to be prudent for the
scope and scale of its activities. If the BOQ Group's third-party providers
fail to perform their obligations and/or its third-party insurance cover is
insufficient for a particular matter or group or related matters, the net loss
to the BOQ Group could adversely impact the Issuer's financial performance,
financial position, capital resources and prospects.
Strategic risk
Strategic risk is the risk associated with the pursuit of the Issuer's
strategic objectives in a dynamic environment. There is a risk that the
strategic objectives of the Issuer may not achieve or realise the Issuer's key
priorities. If the business does not perform as anticipated or if there are
changes in the business, economic, legislative or regulatory environment,
wholesale or retail funding markets or customer behaviour changes, this may
also affect the effectiveness of any strategy.
This includes risk associated with strategic opportunities, including
acquisitions, divestments and restructuring of existing businesses as well as
simplification, transformational investment and innovation initiatives. Each
of these activities can be complex, costly and time consuming and require the
BOQ Group, its directors and senior management to make strategic choices about
where to place the BOQ Group's investment expenditure and how to use its
capital.
Pursuing a growth strategy, organic or inorganic (through acquisitions,
divestments or other transactions) can place significant demand on the
Issuer's legal, compliance, finance, IT and risk management teams and risks
disruption to existing businesses and the operations of the Issuer, including
possible changes in key executives and employees. Strategic risk extends to
internal business choices made in a timely manner covering product
development, pricing, processes, resource allocation and investment. These all
impact the performance and ability to deliver on the strategic ambitions for
the BOQ Group.
A failure to execute the Issuer's strategic objectives may result in a failure
to achieve anticipated benefits and ultimately adversely impact the Issuer's
operations, reputation, financial performance, financial position, ability to
pay future dividends or capital distributions, capital resources and
prospects. Executing on multiple transactions and/or initiatives can intensify
this risk as well as accelerating large-scale transformation execution. There
is also the risk that other strategic opportunities are missed.
Implementation of digital transformation strategy
The Issuer has previously announced its digital transformation strategy to
simplify and modernise its technology infrastructure, applications and
operations environment. The Issuer's investment in this transformation program
is critical to simplifying its technology and automating its manual processes.
These programmes of work comprise both maintenance and remedial activity to
ensure the technology environment remains secure and stable, and
transformational activity to drive customer growth such as the build out of a
new digital bank and the move to cloud.
While significant progress has been made through its partnership with key
global technology partners such as Temenos and Microsoft, with benefits
emerging, the Issuer is currently still operating on multiple legacy systems
and platforms meaning lower cost to income ratios will not be fully realised
until duplication has been removed.
There continues to be a risk that the costs and expenses associated with
implementing the digital transformation are not managed as planned and/or the
implementation timelines are extended. The increased costs or extended
timeframes could have an adverse effect on the Issuer's financial performance,
financial position, ability to pay future dividends or capital distributions,
capital resources and prospects. There is also the risk that the benefits of
the digital transformation are not as anticipated including lower than
expected customer growth and a failure to achieve significant improvements in
cost-to-income ratios. Should the Issuer not execute its digital
transformation, it will be required to continue with complex legacy systems,
including those used in risk management frameworks and manual processes and
controls. This could lead to the Issuer underperforming market expectations
regarding growth, costs and profit, which may have an impact on the Issuer's
financial performance, financial position, capital resources and prospects.
Increased industry competition
There is substantial competition for the provision of financial services in
the markets in which the Issuer operates. Existing participants (including as
a result of merger or consolidation activity) or potential new entrants to the
market, especially in the Issuer's main markets and products, could heighten
competition and reduce margins or increase costs of participation, which would
adversely affect the BOQ Group's financial performance and position.
Competition is expected to increase including from non-Australian financial
services providers as well as new non-bank entrants who may be unregulated or
subject to lower prudential or regulatory standards than the Issuer and may be
able to operate more efficiently.
Ongoing consolidation in the financial services sector, including in the
banking sector, has the potential to change the competitive environment,
increase competition and to create different competitive opportunities and
threats, all which may have a negative impact on the Issuer. There is no
guarantee that the Issuer will be able to participate in any further industry
consolidation and the ability for the Issuer to be able to take advantage of
any associated competitive opportunities, or to respond to any competitive
threats, is uncertain.
As the financial services industry is a licensed and regulated industry, the
prudential framework across industry participants creates its own challenges
and any changes in the regulatory environment can potentially influence the
industry's competitive dynamic.
If the Issuer is unable to compete effectively in its business segments and
markets, its market share may decline placing pressure on margins, which may
in turn adversely affect the BOQ Group's financial performance, financial
position, capital resources and prospects.
Conduct risk
Conduct risk is the risk that the Issuer's provision of products and services
results in unsuitable or unfair outcomes for its customers and/or undermines
market integrity. Conduct risk could occur through the provision of products
and services to the Issuer's customers that do not meet their needs or that
are not appropriate for them or that do not support market integrity, as well
as the poor conduct of the Issuer's employees, contractors, agents, authorised
representatives and external service providers, which could include deliberate
attempts by such individuals to circumvent the Issuer's controls, processes
and procedures. This could occur through a failure to meet professional
obligations to specific clients (including suitability requirements), poor
product design and distribution, failure to adequately consider customer needs
or selling products and services outside of customer target markets. Conduct
risk may also arise where there has been a failure to adequately provide a
product or services that the Issuer had agreed to provide a customer.
While the Issuer has frameworks, policies, processes and controls that are
designed to mitigate the risk of poor conduct outcomes, these policies and
processes may not always have been or continue to be effective. The failure of
these policies and processes could result in financial losses, regulatory
fines and reputational damage, as well as remediation costs to improve
policies and processes. This could adversely affect the Issuer's financial
performance, financial position, capital resources and prospects.
Reliance on external parties
The Issuer's operations depend on performance by a number of external parties
operating under contractual arrangements with the Issuer. Examples include:
· The Issuer's OMBs network and brokers. For example,
non-performance of contractual obligations and poor operational performance of
OMBs, who operate the majority of the Issuer's retail branches, the Issuer's
broker partners, may have an adverse effect on the Issuer's business and
financial performance.
· The risk of relying on third parties to review and advise
on improvements to processes and practices should such advice or guidance be
incorrect or fail to meet legal or regulatory requirements or regulator
expectations or lead to litigation or class actions.
· The Issuer also has key outsourcing agreements including
in relation to its IT platforms and systems where certain activities or
products can be more effectively provided by suppliers. Although the Issuer
has taken steps to protect it from the effects of defaults, inadvertent loss
of data, breaches of privacy or breaches of security under these contractual
arrangements and outsourcing agreements, such defaults, losses or breaches may
have an adverse effect on the Issuer's business continuity and financial
performance and could additionally lead to a loss of customer, employee or
commercially sensitive data, regulatory fines or penalties and/or reputational
damage. There is also a risk that one of the Issuer's suppliers will suffer a
cyber threat or cyber attack that may disrupt the Issuer's business
operations, damage its technology infrastructure or cause loss of data or
information.
A risk of relying on third parties to provide the Issuer's core platforms and
other operating requirements is the risk of disputes arising under such
contractual arrangements that may lead to early termination of such
arrangements which may cause financial loss or damage to the Issuer, cause
material interruptions to the Issuer's business and operations and/or lead to
loss of the Issuer's licenses or permits to operate.
Litigation and regulatory proceedings
The Issuer (like all entities in the banking, insurance or finance sectors) is
exposed to the risk of litigation and/or regulatory reviews, investigations or
proceedings brought by or on behalf of its customers, policyholders,
reinsurers, government agencies (including regulators) or other potential
claimants. If the BOQ Group fails to meet its legal or regulatory
requirements, or the requirements of industry codes of practice (such as the
Banking Code of Practice), or its ethical standards, it may be exposed to
fines, public censure, litigation, settlements, restitution and remediation to
customers, regulators or other stakeholders, or enforced suspension of
operations or loss of licence to operate all or part of the BOQ Group's
business.
The BOQ Group may be exposed to risks relating to design and distribution of
its products and services, and/or the provision of advice, recommendations or
guidance about those products and services, or behaviours which do not
appropriately consider the interests of customers, the integrity of the
financial markets and the expectations of the community, in the course of its
business activities.
In recent years there have been significant increases in the nature and scale
of regulatory investigations and reviews, enforcement actions (whether by
court action or otherwise) and the quantum of fines issued by regulators,
particularly against financial institutions both in Australia and globally.
The nature of those investigations, reviews and enforcement actions can be
wide ranging and, for example, have included and currently include a range of
matters including responsible lending practices, anti-money laundering and
counter terrorism financing, product suitability, wealth advice, operational
risk, compliance and risk culture and conduct in financial markets and
capital markets transactions.
As has been disclosed to the market, on 25 May 2021, the Commonwealth Director
of Public Prosecution commenced proceedings against ME in relation to alleged
contraventions of the National Credit Code and the ASIC Act. As at the date of
this Prospectus, those proceedings remain on foot.
As noted in "Risk Factors - Regulatory, legal and compliance risk - Regulation
in Australia", internal and external reviews identified that a material uplift
is required in respect of the Issuer's operational resilience, risk culture
and AML/CTF Program and compliance.
There is a risk that the outcome of ongoing engagement with regulators in
respect of the matters above will involve regulators imposing fines, sanctions
or taking other enforcement actions in relation to the BOQ Group's compliance
with relevant laws and regulations.
Additionally, there can be no assurance that significant litigation will not
arise in the future and that the outcome of legal proceedings from time to
time will not have an adverse effect on the BOQ Group's businesses, financial
performance, financial condition or prospects.
RISK FACTORS THAT MAY AFFECT THE COVERED BOND GUARANTOR'S ABILITY TO FULFIL
ITS OBLIGATIONS UNDER THE COVERED BONDS ISSUED UNDER THE PROGRAMME
There is limited recourse to the Covered Bond Guarantor.
The Assets of the Trust will be the sole source of payments by the Covered
Bond Guarantor under the Programme Documents (including under the Covered Bond
Guarantee). The Covered Bond Guarantor's personal assets or any other assets
held as trustee of another trust will not be available to make such payments
unless, in the case of personal assets, there is a reduction in the extent of
the Covered Bond Guarantor's indemnification out of the Assets of the Trust as
a result of the Covered Bond Guarantor's fraud, negligence or wilful default.
Therefore, if the Assets of the Trust are insufficient to enable the Covered
Bond Guarantor to meet its obligations (including in respect of the Covered
Bond Guarantee), this may affect the timing or amount of interest and
principal payments under the Covered Bonds following an Issuer Event of
Default and service of a Notice to Pay on the Covered Bond Guarantor.
The Covered Bond Guarantor is only obliged to pay Guaranteed Amounts when the
same are Due for Payment.
Subsequent to an Issuer Event of Default that is continuing, the Bond Trustee
at its discretion may, and if so requested in writing by the holders of at
least 25 per cent. of the Australian Dollar Equivalent of the aggregate
Principal Amount Outstanding of the Covered Bonds then outstanding or if so
directed by an Extraordinary Resolution of the Covered Bondholders will,
subject to being indemnified and/or secured and/or prefunded to its
satisfaction, give an Issuer Acceleration Notice to the Issuer (copied to the
Covered Bond Guarantor) that as against the Issuer (but not, for the avoidance
of doubt, as against the Covered Bond Guarantor) each Covered Bond will
thereupon immediately become due and repayable at its Early Redemption Amount
together with accrued interest.
Upon the Covered Bonds becoming immediately due and repayable against the
Issuer, the Bond Trustee will forthwith serve a Notice to Pay on the Covered
Bond Guarantor (copied to the Trust Manager and the Security Trustee) and the
Covered Bond Guarantor will be required to make payments of Guaranteed Amounts
when the same will become Due for Payment in accordance with the terms of the
Covered Bond Guarantee. The Covered Bond Guarantor will have no obligation
to pay the Guaranteed Amounts payable under the Covered Bond Guarantee prior
to receipt of an Issuer Acceleration Notice and Notice to Pay.
Following service of a Notice to Pay on the Covered Bond Guarantor (copied to
the Trust Manager and the Security Trustee) the Covered Bond Guarantor must
pay or procure to be paid on each Scheduled Payment Date to or to the order of
the Bond Trustee (for the benefit of Covered Bondholders) an amount equal to
those Guaranteed Amounts which have become Due for Payment in accordance with
the terms of the Bond Trust Deed but which have not been paid by the Issuer
provided that no Notice to Pay may be served on the Covered Bond Guarantor
until an Issuer Acceleration Notice has been served by the Bond Trustee on the
Issuer.
All payments of Guaranteed Amounts by the Covered Bond Guarantor will be made
without withholding or deduction for or on account of any present or future
taxes, duties, assessments or governmental charges of whatever nature imposed
or levied by or on behalf of Australia or any political sub-division thereof
or by any authority therein or thereof having power to tax unless such
withholding or deduction is required by law or regulation or administrative
practice of any jurisdiction. In the event of a withholding or deduction
being made by the Covered Bond Guarantor, the Covered Bond Guarantor will not
be obliged to pay any additional amounts as a consequence. In addition, the
Covered Bond Guarantor will not be obliged at any time to make any payments in
respect of additional amounts which may, had the Issuer been making payments
on the Covered Bonds, have become payable by the Issuer under Condition 7.
Prior to service on the Covered Bond Guarantor of a Covered Bond Guarantee
Acceleration Notice, the Covered Bond Guarantor will not be obliged to make
payment in respect of any additional amounts relating to prepayments, early
redemption, broken funding indemnities, penalties, premiums, default interest
or interest upon interest which may accrue on or in respect of the Covered
Bonds.
Subject to any grace period, if the Covered Bond Guarantor fails to make a
payment when Due for Payment under the Covered Bond Guarantee or any other
Covered Bond Guarantor Event of Default occurs and is continuing, then the
Bond Trustee may, and if so requested in writing by the holders of at least 25
per cent. of the Australian Dollar Equivalent of the aggregate Principal
Amount Outstanding of the Covered Bonds then outstanding or if so directed by
an Extraordinary Resolution of the Covered Bondholders will, subject to being
indemnified and/or secured and/or prefunded to its satisfaction, accelerate
the obligations of the Covered Bond Guarantor under the Covered Bond Guarantee
by service of a Covered Bond Guarantee Acceleration Notice, whereupon the Bond
Trustee will have a claim under the Covered Bond Guarantee for an amount equal
to the Early Redemption Amount of each Covered Bond, together with accrued
interest and all other amounts then due under the Covered Bonds (other than
additional amounts payable under Condition 7, although in such circumstances
the Covered Bond Guarantor will not be obliged to gross up in respect of any
withholding which may be required in respect of any payment). Following
service of a Covered Bond Guarantee Acceleration Notice, the Security Trustee
may enforce the Security over the Charged Property. The proceeds of
enforcement and realisation of the Security will be applied by the Security
Trustee in accordance with the Post-Enforcement Priority of Payments in the
Security Deed, and Covered Bondholders will receive amounts from the Covered
Bond Guarantor on an accelerated basis.
There is no guarantee that the Covered Bond Guarantor will be able to satisfy
its obligations to make payments under the Covered Bond Guarantee. Should the
Covered Bond Guarantor be unable to meet the claims of Covered Bondholders
under the Covered Bond Guarantee, the interests of Covered Bondholders may be
adversely affected and Covered Bondholders may not receive payment in full of
all amounts due in respect of the Covered Bonds held by them.
The obligations under the Covered Bond Guarantee in respect of a Series of
Covered Bonds may be extendable for a period of up to 31.5 years.
The Applicable Final Terms for a Series of Covered Bonds (or, in the case of a
Series of Exempt Covered Bonds, the Applicable Pricing Supplement) will
provide that such Covered Bonds are subject to an Extended Due for Payment
Date, being the earlier of (a) the date which falls 31.5 years after the Final
Maturity Date in relation to that Series of Covered Bonds; (b) the date which
falls 31.5 years after the Conversion of that Series of Covered Bonds; and (c)
the date which falls 31.5 years after the Conversion Event Date.
Accordingly (subject to no Conversion or Covered Bond Guarantor Event of
Default having occurred), following the failure by the Issuer to pay, in full,
the Final Redemption Amount of the relevant Series of Covered Bonds on their
Final Maturity Date (subject to applicable grace periods) and if, following
the service of a Notice to Pay on the Covered Bond Guarantor (by no later than
the date which falls one Business Day prior to the Extension Determination
Date), payment of the Guaranteed Amounts corresponding to the unpaid portion
of such Final Redemption Amount in respect of the relevant Series of Covered
Bonds are not paid in full by the earlier of (a) the date which falls two
Business Days after service of such Notice to Pay on the Covered Bond
Guarantor or, if later, the Final Maturity Date (or, in each case, after the
expiry of the grace period set out in Condition 9(a)(i)) under the terms of
the Covered Bond Guarantee and (b) the Extension Determination Date, then the
payment of such Guaranteed Amounts will be automatically deferred to the
Extended Due for Payment Date for the relevant Series of Covered Bonds and
such Covered Bonds will become Pass-Through Covered Bonds. The Trust Manager
is required to notify the Covered Bondholders in accordance with Condition 13
of such deferral (but failure to do so does not affect the validity or
effectiveness of the extension).
To the extent that the Covered Bond Guarantor has received a Notice to Pay in
sufficient time and has sufficient moneys available to pay in whole or in part
the Guaranteed Amounts corresponding to the relevant unpaid portion of the
Final Redemption Amount in respect of the relevant Series of Pass-Through
Covered Bonds, the Covered Bond Guarantor will be required to make such
payment in accordance with the Guarantee Priority of Payments and as described
in Condition 6(a). Payment of the unpaid amount will be deferred
automatically until the applicable Extended Due for Payment Date, provided
that any amount representing the Final Redemption Amount due and remaining
unpaid on the earlier of (a) and (b) in the preceding paragraph may also be
paid by the Covered Bond Guarantor (at the direction of the Trust Manager) on
any Interest Payment Date thereafter up to (and including) the Extended Due
for Payment Date.
In addition, if, prior to the Conversion Event Date, (a) an Issuer Event of
Default has occurred (x) in accordance with Condition 9(a) (other than in
accordance with Condition 9(a)(i) as a result of a failure to pay the Final
Redemption Amount in respect of a Series of Covered Bonds) and the Bond
Trustee has served a Notice to Pay on the Covered Bond Guarantor or (y) in
accordance with Condition 9(a)(i) as a result of a failure to pay the Final
Redemption Amount in respect of a Series of Covered Bonds and such Series of
Covered Bonds has been redeemed in full and (b) at such time there are no
Pass-Through Covered Bonds then outstanding, then (subject as provided below)
payment of the Final Redemption Amount in respect of the then Earliest
Maturing Covered Bonds by the Covered Bond Guarantor under the Covered Bond
Guarantee will be deferred until the Extended Due for Payment Date (and such
Earliest Maturing Covered Bonds will become Pass-Through Covered Bonds). In
such circumstances, the Covered Bond Guarantor is required, on the next and
each following Interest Payment Date, under the Covered Bond Guarantee, to
apply the moneys (if any) available on a Distribution Date (after paying or
providing for payment of higher ranking or pari passu amounts in accordance
with the Guarantee Priority of Payments) rateably in part payment of an amount
equal to the Final Redemption Amount of the then Earliest Maturing Covered
Bonds (and to such extent, the Final Redemption Amount will, for the purpose
of the Guarantee Priority of Payments and all other purposes, be due) and will
pay Guaranteed Amounts constituting the Scheduled Interest in respect of the
then Earliest Maturing Covered Bonds on such Interest Payments Dates. The
obligation of the Covered Bond Guarantor to pay any amounts in respect of the
balance of the Final Redemption Amount not so paid on such Interest Payments
Date for such Earliest Maturing Covered Bonds will be deferred as described
above and such failure to pay by the Covered Bond Guarantor will not
constitute a Covered Bond Guarantor Event of Default, provided that any amount
representing the Final Redemption Amount remaining unpaid may also be paid by
the Covered Bond Guarantor (at the direction of the Trust Manager) on any
Interest Payment Date thereafter up to (and including) the Extended Due for
Payment Date. Once the then Earliest Maturing Covered Bonds are repaid in
full, the above will then apply to the next Earliest Maturing Covered Bonds.
All Series of Covered Bonds will convert to Pass-Through Covered Bonds
immediately upon the Conversion Event Date, being the date on which an
Amortisation Test Breach Notice is served on the Covered Bond Guarantor and
the Issuer, following the service of a Notice of Pay on the Covered Bond
Guarantor. Following the Conversion Event Date (subject to no Covered Bond
Guarantor Event of Default having occurred and subject as provided below),
payment of the unpaid amount in respect of all Series of Covered Bonds by the
Covered Bond Guarantor under the Covered Bond Guarantee will be deferred until
the Extended Due for Payment Date. The Covered Bond Guarantor (at the
direction of the Trust Manager) must on the next, and each following Interest
Payment Date for each Series of Covered Bonds, apply the moneys (if any)
available for that Series of Covered Bonds on a Distribution Date (after
paying or providing for payment of higher ranking or pari passu amounts in
accordance with the Guarantee Priority of Payments) towards payment, in whole
or part, of the Final Redemption Amount of that Series of Covered Bonds (and
to such extent, the Final Redemption Amount will, for the purpose of the
Guarantee Priority of Payments and all other purposes, be due) on such
Interest Payment Date.
The Covered Bond Guarantor will also pay Guaranteed Amounts constituting
Scheduled Interest in respect of each Series of Pass-Through Covered Bonds on
the basis set out in the Applicable Final Terms (or, in the case of Exempt
Covered Bonds, the Applicable Pricing Supplement) or, if not set out therein,
in accordance with Condition 4, without prejudice to the Covered Bond
Guarantor's obligation to pay any other Guaranteed Amount (i.e. other than the
Final Redemption Amount) when Due for Payment.
In each of the circumstances set out above, except where the Covered Bond
Guarantor has failed to apply money in accordance with the Guarantee Priority
of Payments, failure by the Covered Bond Guarantor to make payment in respect
of the Final Redemption Amount on the Final Maturity Date in respect of a
Series of Covered Bonds (or such later date within any applicable grace
period) will not constitute a Covered Bond Guarantor Event of Default.
However, failure by the Covered Bond Guarantor to pay Guaranteed Amounts
corresponding to the Final Redemption Amount or the balance thereof, as the
case may be, on the Extended Due for Payment Date in respect of a Series of
Covered Bonds and/or pay Guaranteed Amounts constituting Scheduled Interest on
any Original Due for Payment Date up to and including the Extended Due for
Payment Date in respect of a Series of Covered Bonds will (subject to any
applicable grace period) be a Covered Bond Guarantor Event of Default.
The Final Maturity Dates for different Series of Covered Bonds may not be the
same. In the case of a Series of Covered Bonds, if the principal amounts
have not been repaid in full by the Extension Determination Date, then the
repayment of unpaid principal amounts will be deferred until the Extended Due
for Payment Date.
The Extended Due for Payment Dates for different Series of Covered Bonds may
not be the same. On each Distribution Date following the service of a Notice
to Pay on the Covered Bond Guarantor (but prior to the service of a Covered
Bond Guarantee Acceleration Notice), the Covered Bond Guarantor will apply the
Available Income Amount and the Available Principal Amount in accordance with
the Guarantee Priority of Payments. To the extent that the amount available
for distribution under the Guarantee Priority of Payments would be
insufficient to pay the Scheduled Interest, the Scheduled Principal or the
Final Redemption Amount of any Series of Covered Bonds to which an Extended
Due for Payment Date applies, the shortfall will be divided amongst all such
Series of Covered Bonds on a pari passu and rateable basis.
Prior to the occurrence of a Conversion, the Covered Bond Guarantor will be
entitled to apply the Available Principal Amount in order to repay earlier
maturing Series of Covered Bonds, which may mean that there may be fewer
assets available to support later maturing Series of Covered Bonds.
Payments by the Covered Bond Guarantor may be treated as interest for
Australian withholding tax purposes.
It is possible that payments by the Covered Bond Guarantor that relate to
interest on the Covered Bonds would be treated as interest for Australian
withholding tax purposes and therefore subject to withholding tax. Please
refer to the section "Taxation - Australian Taxation - Payments by the Covered
Bond Guarantor" of this Prospectus. Investors should be aware that in the
event payments by the Covered Bond Guarantor are subject to any withholding or
deduction for or on account of tax, the Covered Bond Guarantor will not be
required to pay any additional amounts to Covered Bondholders.
Excess proceeds received by the Bond Trustee will be paid to the Covered Bond
Guarantor following the occurrence of an Issuer Event of Default.
Following the occurrence of an Issuer Event of Default and service by the Bond
Trustee of an Issuer Acceleration Notice any Excess Proceeds received by the
Bond Trustee on behalf of the Covered Bondholders of the relevant Series will
be paid to the Covered Bond Guarantor, as soon as practicable, and must be
held by the Covered Bond Guarantor in the GIC Account and the Excess Proceeds
will thereafter form part of the Security and will be used by the Covered Bond
Guarantor in the same manner as all other moneys from time to time standing to
the credit of the GIC Account. Any Excess Proceeds received by the Bond
Trustee will discharge pro tanto the obligations of the Issuer in respect of
the Covered Bonds and Coupons (subject to restitution of the same if such
Excess Proceeds will be required to be repaid by the Covered Bond
Guarantor). However, the obligations of the Covered Bond Guarantor under the
Covered Bond Guarantee are (following service of an Issuer Acceleration Notice
and a Notice to Pay or, if earlier, a Covered Bond Guarantee Acceleration
Notice) unconditional and irrevocable and the receipt by the Bond Trustee of
any Excess Proceeds will not reduce or discharge any such obligations.
By subscribing for Covered Bonds, each Covered Bondholder will be deemed to
have irrevocably directed the Bond Trustee to pay the Excess Proceeds to the
Covered Bond Guarantor for application in the manner as described above.
There are finite resources available to the Covered Bond Guarantor to make
payments due under the Covered Bond Guarantee.
Following service by the Bond Trustee of an Issuer Acceleration Notice on the
Issuer (copied to the Covered Bond Guarantor), all amounts payable under the
Covered Bonds will be accelerated by the Bond Trustee as against the Issuer
and a Notice to Pay must be served by the Bond Trustee on the Covered Bond
Guarantor (copied to the Trust Manager and the Security Trustee). The
Covered Bond Guarantor's ability to meet its obligations under the Covered
Bond Guarantee will depend on: (i) the realisable value of the sale of
Selected Mortgage Loan Rights; (ii) the amount of Principal Collections and
Finance Charge Collections generated by the Mortgage Loan Rights forming part
of the Assets of the Trust and the timing thereof; (iii) amounts received from
the Swap Providers; (iv) the realisable value of Substitution Assets and
Authorised Investments held by it; and (v) the receipt by it of credit
balances and interest on credit balances on the GIC Account. Recourse
against the Covered Bond Guarantor under the Covered Bond Guarantee is limited
to the extent of its right of indemnity from the Assets of the Trust
(including as described in the foregoing) (except to the extent of any
reduction in the extent of the Covered Bond Guarantor's right of indemnity as
a result of the Covered Bond Guarantor's fraud, negligence or wilful default)
and the Covered Bond Guarantor will not have any obligation to use its own
funds or any other assets held by it (except in those limited circumstances)
to meet its obligations under the Covered Bond Guarantee.
If a Covered Bond Guarantee Acceleration Notice is served on the Covered Bond
Guarantor and the Issuer and the Security created by or pursuant to the
Security Deed is enforced, the realisation of the Charged Property may not be
sufficient to meet the claims of all the Secured Creditors, including the
Covered Bondholders.
If, following enforcement of the Security constituted by or pursuant to the
Security Deed, the Covered Bondholders have not received the full amount due
to them pursuant to the terms of the Programme Documents, then they may still
have an unsecured claim against the Issuer for the shortfall. There is no
guarantee that the Issuer will have sufficient funds to pay that shortfall.
Covered Bondholders should note that the Asset Coverage Test has been
structured to ensure that the Adjusted Aggregate Mortgage Loan Amount is at
least equal to the Australian Dollar Equivalent of the aggregate Principal
Amount Outstanding of the Covered Bonds for so long as Covered Bonds remain
outstanding (prior to service of a Notice to Pay or, if earlier, a Covered
Bond Guarantee Acceleration Notice on the Covered Bond Guarantor and the
Issuer), which should reduce the risk of there ever being a shortfall in
amounts to pay the Covered Bondholders (although there is no assurance of this
- in particular, the sale of further Mortgage Loan Rights by the Seller to the
Covered Bond Guarantor or other action may be required to avoid or remedy any
non-satisfaction or breach of the Asset Coverage Test).
The Trust Manager will be required to ensure that, following the service of a
Notice to Pay on the Covered Bond Guarantor (but prior to the service of a
Covered Bond Guarantee Acceleration Notice on the Covered Bond Guarantor and
the Issuer), the Amortisation Test is met on each relevant Determination
Date. The Trust Manager must immediately notify the Covered Bond Guarantor,
the Security Trustee and (for so long as Covered Bonds are outstanding) the
Bond Trustee of any breach of the Amortisation Test and the Bond Trustee must
serve an Amortisation Test Breach Notice on the Issuer and the Covered Bond
Guarantor. The service of an Amortisation Test Breach Notice on the Covered
Bond Guarantor and the Issuer (following service of a Notice to Pay on the
Covered Bond Guarantor), will result in all Series of Covered Bonds converting
to Pass-Through Covered Bonds.
The Asset Coverage Test, the Amortisation Test, the Interest Rate Shortfall
Test and the Yield Shortfall Test have in the aggregate been structured to
ensure that the Assets forming part of the Trust are sufficient to pay amounts
due on the Covered Bonds and senior expenses (which will include costs
relating to the maintenance, administration and winding-up of the Asset Pool
whilst the Covered Bonds are outstanding). However no assurance can be given
that the Assets forming part of the Trust will in fact generate sufficient
amounts for such purposes (see "Overview of the Principal Documents -
Establishment Deed - Asset Coverage Test" and "Credit Structure - Asset
Coverage Test", "Overview of the Principal Documents - Establishment Deed -
Amortisation Test" and "Credit Structure - Amortisation Test", "Overview of
the Principal Documents - Servicing Deed - Interest Rate Shortfall Test" and
"Overview of the Principal Documents - Servicing Deed - Yield Shortfall
Test").
The Covered Bond Guarantor relies on third parties.
The Covered Bond Guarantor has entered into agreements with a number of third
parties, which have agreed to perform services for the Covered Bond
Guarantor. In particular, but without limitation:
(a) the Servicer has been appointed to administer and service
the Mortgage Loan Rights forming part of the Assets of the Trust and to
provide certain other administration and management services to the Covered
Bond Guarantor pursuant to the provisions of the Servicing Deed;
(b) the Trust Manager has been appointed to provide the
administration, cash management and calculation services set out in the
Programme Documents including, operating the Trust Accounts prior to the
service of a Notice to Pay on the Covered Bond Guarantor, keeping and
maintaining records, preparing annual accounts of the Trust and arranging for
those to be audited, directing the Covered Bond Guarantor to invest moneys
standing to the credit of the GIC Account in Substitution Assets or Authorised
Investments, performing all calculations on each Determination Date or other
relevant date which are required to determine whether the Mortgage Loan Rights
then forming part of the Assets of the Trust are in compliance with the Asset
Coverage Test or the Amortisation Test, as applicable, and providing
information to the Cover Pool Monitor;
(c) the Cover Pool Monitor has been appointed to perform certain
procedures and report on the accuracy of the Trust Manager's calculations in
respect of the Asset Coverage Test or Amortisation Test, as the case may be,
to assess whether the Trust Manager is keeping an accurate register of the
Assets of the Trust and to perform certain procedures and report on compliance
of the Assets forming part of the Trust with the requirements of the
Australian Banking Act and the limits on investment in Substitution Assets in
the Establishment Deed; and
(d) the Account Bank has been appointed to operate each of the
Trust Accounts in accordance with the relevant Account Bank Mandate pursuant
to the Account Bank Agreement.
In the event that any of those third parties fails to perform its obligations
under the relevant Programme Documents to which it is a party, the realisable
value of the Mortgage Loan Rights and other Assets forming part of the Trust
or any part thereof or pending such realisation (if the Mortgage Loan Rights
and other Assets forming part of the Trust or any part thereof cannot be sold)
the ability of the Covered Bond Guarantor to make payments under the Covered
Bond Guarantee may be affected. For example, if the Servicer fails to
adequately administer the Mortgage Loan Rights, this may lead to higher
incidences of non-payment or default by Borrowers.
The Covered Bond Guarantor will also be reliant on the Swap Providers to
provide it with the funds matching its obligations under the Intercompany
Notes, the Demand Note and the Covered Bond Guarantee, as described below.
If the Trust Manager or the Covered Bond Guarantor has determined that, among
other things, a Servicer Default has occurred and is continuing, then the
Trust Manager or the Covered Bond Guarantor (as applicable) must, by written
notice to the Servicer, immediately terminate the rights and obligations of
the Servicer and appoint another appropriately qualified organisation to act
in its place. The purported appointment of a Substitute Servicer following
such termination has no effect until the Substitute Servicer executes an
agreement under which it covenants to act as servicer in accordance with the
Servicing Deed and all other Programme Documents to which the Servicer is a
party. The Trust Manager must notify the Security Trustee, the Bond Trustee
and the Rating Agencies of the identity of the Substitute Servicer. Until the
appointment of the Substitute Servicer is complete, the Covered Bond Guarantor
must act as Servicer, provided that the Trust Manager and the Covered Bond
Guarantor (acting reasonably) have agreed a fee in writing to be paid to the
Covered Bond Guarantor for the period during which the Covered Bond Guarantor
is required to so act. There can be no assurance that a Substitute Servicer
with sufficient experience of administering mortgages of residential
properties would be found who would be willing and able to service the
Mortgage Loan Rights forming part of the Assets of the Trust on the terms of
the Servicing Deed or that the Servicer will be able to continue to perform
this role until such Substitute Servicer is appointed, particularly if the
Servicer's termination is as a result of an Insolvency Event occurring in
respect of the Servicer.
The ability of a Substitute Servicer or the Covered Bond Guarantor (when
acting as Servicer) to perform fully the required services as Servicer would
depend, among other things, on the information, software and records available
at the time of the appointment or it being required to act as Servicer,
respectively. Any delay or inability to appoint a substitute servicer may
affect payments on the Mortgage Loan Rights forming part of the Assets of the
Trust, the realisable value of such Mortgage Loan Rights and/or the ability of
the Covered Bond Guarantor to make payments under the Covered Bond Guarantee.
The Servicer has no liability for any obligations of the Borrowers in respect
of the Mortgage Loan Rights forming part of the Assets of the Trust. Covered
Bondholders will have no right to consent to or approve of any actions taken
by the Servicer under the Servicing Deed.
The Servicer is required to act as collecting agent for the Covered Bond
Guarantor in respect of all payments in respect of the Mortgage Loan Rights
forming part of the Assets of the Trust (including, without limitation, a
Mortgage Loan Scheduled Payment). If the Servicer receives, during a
Collection Period, any money whatsoever arising from the Mortgage Loan Rights
forming part of the Assets of the Trust which money belongs to the Covered
Bond Guarantor, the Servicer will hold such money on trust for the Covered
Bond Guarantor. The Servicer is entitled to commingle such money with any
other money held by it. In the event of an insolvency of the Servicer, the
ability of the Covered Bond Guarantor to trace and recover any such commingled
money may be impaired. The risk of the Servicer not making such payments to
the GIC Account, is mitigated by an obligation on the Servicer to transfer the
collections into the GIC Account within two AU Business Days of receipt if the
Servicer does not have (i) a short-term deposit rating of P-1 (by Moody's) and
(ii) either a short-term credit rating of F1 (by Fitch) or a long term credit
rating of at least A (by Fitch).
Neither the Security Trustee nor the Bond Trustee is obliged in any
circumstances to act as a Servicer and none of the Covered Bond Guarantor, the
Security Trustee or the Bond Trustee is obliged to monitor the performance by
the Servicer of its obligations.
While a Trust Manager Default is subsisting and after the Covered Bond
Guarantor becomes aware of the Trust Manager Default, the Covered Bond
Guarantor may, upon giving written notice to the Servicer, the Trust Manager
and the Rating Agencies, immediately terminate the rights and obligations of
the Trust Manager under the Programme Documents and appoint another entity to
act in its place. Until the appointment of the Substitute Trust Manager is
complete, the Covered Bond Guarantor must act as Trust Manager, provided that
the Issuer and the Covered Bond Guarantor (acting reasonably) have agreed a
fee in writing to be paid to the Covered Bond Guarantor for the period during
which the Covered Bond Guarantor is required to so act (and is entitled to the
relevant fees for the period it so acts). There can be no assurance that a
Substitute Trust Manager would be found who would be willing and able to
provide such trust management services on the terms of the Establishment Deed
and the Management Agreement or that the Trust Manager will be able to
continue to perform this role until such Substitute Trust Manager is
appointed, particularly if the Trust Manager's termination is as a result of
an Insolvency Event occurring in respect of the Trust Manager. Neither the
Security Trustee nor the Bond Trustee will be obliged in any circumstances to
act as a Trust Manager or to monitor or supervise the performance by the Trust
Manager (or any Substitute Trust Manager) of its obligations.
The ability of a Substitute Trust Manager or the Covered Bond Guarantor (when
acting as Trust Manager) to perform fully the required trust management
services as Trust Manager would depend, among other things, on the
information, software and records available at the time of the appointment or
it being required to act as Trust Manager, respectively. Any delay or
inability to appoint a Substitute Trust Manager may affect payments to and
from the Trust Accounts in accordance with the terms of the Programme
Documents, and/or the provision of the Asset Coverage Reports and other
information to, inter alia, the Rating Agencies, the Security Trustee and the
Covered Bond Guarantor and may ultimately affect the ability of the Covered
Bond Guarantor to make payments under the Covered Bond Guarantee.
The Trust Manager has no obligation itself to advance payments that Borrowers
fail to make in a timely fashion. Covered Bondholders will have no right to
consent to or approve of any actions taken by the Trust Manager under the
Establishment Deed and/or the Management Agreement.
The Covered Bond Guarantor relies on Swap Providers.
In order to hedge certain interest rate, currency or other risks in respect of
amounts received by the Covered Bond Guarantor under the Mortgage Loans and
from certain other Assets forming part of the Trust, amounts payable by the
Covered Bond Guarantor under the Intercompany Notes and the Demand Note and/or
amounts payable by the Covered Bond Guarantor under the Covered Bond Guarantee
to Covered Bondholders in respect of the Covered Bonds on issue, the Covered
Bond Guarantor will enter into certain swap transactions with a number of swap
providers (each, a Swap Provider).
If the Covered Bond Guarantor fails to make timely payments of amounts due
under any Swap Agreement, then it will have defaulted under that Swap
Agreement and such Swap Agreement may be terminated. Further, a Swap
Provider is only obliged to make payments to the Covered Bond Guarantor if the
Covered Bond Guarantor complies with its payment obligations under the
relevant Swap Agreement. If a Swap Agreement (or one or more Swaps under
such Swap Agreement) terminates or the relevant Swap Provider is not obliged
to make payments or if it defaults in its obligations to make payments of
amounts in the relevant currency equal to the full amount to be paid to the
Covered Bond Guarantor on the payment date under such Swap Agreements, the
Covered Bond Guarantor will be exposed to changes in the relevant currency
exchange rates to Australian Dollars (where relevant) and to any changes in
the relevant rates of interest. Unless a replacement swap is entered into,
the Covered Bond Guarantor may have insufficient funds to make payments under
or in respect of the Intercompany Notes, the Demand Note or the Covered Bond
Guarantee.
If a Swap Agreement (or one or more Swaps under such Swap Agreement)
terminates, then the Covered Bond Guarantor may be obliged to make a
termination payment to the relevant Swap Provider. There can be no assurance
that the Covered Bond Guarantor will have sufficient funds available to make a
termination payment under the relevant Swap Agreement or to make any upfront
payment required by a replacement swap counterparty, nor can there be any
assurance that the Covered Bond Guarantor will be able to find a replacement
swap counterparty which has both sufficiently high ratings as may be required
by any of the Rating Agencies and which agrees to enter into a replacement
swap agreement on similar commercial terms.
If the Covered Bond Guarantor is obliged to pay a termination payment under
any Swap Agreement:
(i) (if the Interest Rate Swap Provider is not the Issuer or,
if the Interest Rate Swap Provider is the Issuer and a Regulatory Event has
occurred or is likely to occur) and such termination payment in respect of the
Interest Rate Swaps will rank ahead of amounts due on the Covered Bonds; and
(ii) any such termination payment in respect of the Covered Bond
Swaps, and (if the Interest Rate Swap Provider is the Issuer and a Regulatory
Event has not occurred or is not likely to occur) any such termination payment
in respect of the Interest Rate Swaps will rank pari passu and rateably with
amounts due on the Covered Bonds,
except where default by, or downgrade of, the relevant Swap Provider has
caused the relevant Swap Agreement to terminate. The obligation to pay a
termination payment may adversely affect the ability of the Covered Bond
Guarantor to meet its obligations under the Covered Bond Guarantee (see
further "Risk Factors - General Risk Factors - Enforceability of Priority of
Excluded Swap Termination Proceeds").
There are differences in timings of obligations of the Covered Bond Guarantor
and the Covered Bond Swap Providers under the Covered Bond Swaps that may
affect the Covered Bond Guarantor's ability to make payments under the Covered
Bond Guarantee.
With respect to the Covered Bond Swaps, it is expected that the Covered Bond
Guarantor will pay a quarterly amount, on each relevant payment date, to each
Covered Bond Swap Provider based on the Bank Bill Rate (or such other rate as
may be specified in the relevant confirmation). A Covered Bond Swap Provider
may not be obliged to make corresponding swap payments to the Covered Bond
Guarantor under a Covered Bond Swap for up to 12 months until amounts are due
and payable by the Covered Bond Guarantor under the relevant Intercompany Note
(prior to the service of a Notice to Pay or Covered Bond Guarantee
Acceleration Notice on the Covered Bond Guarantor) or are Due for Payment
under the Covered Bond Guarantee (after the service of a Notice to Pay or
Covered Bond Guarantee Acceleration Notice on the Covered Bond Guarantor).
If a Covered Bond Swap Provider does not meet its payment obligations to the
Covered Bond Guarantor under the relevant Covered Bond Swap and such Covered
Bond Swap Provider does not make a termination payment that has become due
from it to the Covered Bond Guarantor, the Covered Bond Guarantor may have a
larger shortfall in funds with which to make payments under the Covered Bond
Guarantee with respect to the Covered Bonds than if the Covered Bond Swap
Provider's payment obligations coincided with the Covered Bond Guarantor's
payment obligations under the Covered Bond Guarantee. Hence, the difference
in timing between the obligations of the Covered Bond Guarantor and the
Covered Bond Swap Providers under the Covered Bond Swaps may affect the
Covered Bond Guarantor's ability to make payments under the Covered Bond
Guarantee with respect to the Covered Bonds.
Covered Bondholders receive a limited description of the Mortgage Loan Rights.
Covered Bondholders may not receive detailed statistics or information in
relation to the Mortgage Loans Rights forming part of the Assets of the Trust
because it is expected that the constitution of the Mortgage Loans Rights
forming part of the Assets of the Trust will frequently change due to, for
instance:
· the Seller selling additional Mortgage Loan Rights to the
Covered Bond Guarantor;
· payments by the Borrowers on those Mortgage Loans; and
· the Covered Bond Guarantor's interest in the Mortgage
Loan Rights being transferred to, or surrendered in favour of, the Seller in
accordance with the Mortgage Sale Agreement (see "Overview of the Principal
Documents - The Mortgage Sale Agreement - Repurchase by the Seller following
Breach of Representations and Warranties ").
There is no assurance that the characteristics of the Mortgage Loan Rights
sold to the Covered Bond Guarantor on any Closing Date will be the same as
those of the other Mortgage Loan Rights forming part of the Assets of the
Trust as at the relevant Closing Date. However, each Mortgage Loan sold to
the Covered Bond Guarantor will be required to be an Eligible Mortgage Loan
and the Seller will also be required to make the Representations and
Warranties set out in the Mortgage Sale Agreement on such date - see "Overview
of the Principal Documents - Mortgage Sale Agreement" (although the criteria
for Eligible Mortgage Loans and Representations and Warranties may change in
certain circumstances - see "The Bond Trustee and the Security Trustee may
agree to modifications to the Programme Documents without, respectively the
Covered Bondholders' or Secured Creditors' prior consent" above). In
addition, the Asset Coverage Test is intended to ensure that on each
Determination Date the Adjusted Aggregate Mortgage Loan Amount (as at the last
day of the immediately preceding Collection Period) is an amount at least
equal to the Australian Dollar Equivalent of the aggregate Principal Amount
Outstanding (as at the last day of the immediately preceding Collection
Period) of the Covered Bonds for so long as Covered Bonds remain outstanding
(prior to the Service of a Notice to Pay or, if earlier, a Covered Bond
Guarantee Acceleration Notice on the Covered Bond Guarantor and the Issuer)
and the Trust Manager will provide monthly reports that will set out certain
information in relation to the Asset Coverage Test.
The credit and origination policies of the Seller may change and if any
Mortgage Loans have been originated under revised policies and the Mortgage
Loans are then sold to the Covered Bond Guarantor in accordance with and
pursuant to the terms of the Mortgage Sale Agreement, the characteristics of
the Mortgage Loan Rights forming part of the Assets of the Trust could
change. This could adversely affect the ability of the Covered Bond
Guarantor to meet its obligations under the Covered Bond Guarantee.
Maintenance of the Mortgage Loan Rights.
The Asset Coverage Test may not be satisfied which may lead to an Issuer Event
of Default.
The Asset Coverage Test is intended to test the asset coverage of the Assets
of the Trust held from time to time by the Covered Bond Guarantor in respect
of the Covered Bonds on a monthly basis (prior to the service of an Issuer
Acceleration Notice and a Notice to Pay or, if earlier, a Covered Bond
Guarantee Acceleration Notice on the Covered Bond Guarantor). This is to
ensure that the Assets of the Trust held from time to time by the Covered Bond
Guarantor do not fall below a certain threshold and are sufficient for the
Covered Bond Guarantor to meet its obligations under the Covered Bond
Guarantee and senior expenses which rank in priority or pari passu and
rateably with amounts due on the Covered Bonds. (see "Overview of the
Principal Documents - Establishment Deed - Asset Coverage Test" and "Overview
of the Principal Documents - Mortgage Sale Agreement").
If the Asset Coverage Test is not satisfied on a Determination Date and also
on the next following Determination Date, the Trust Manager will immediately
notify the Covered Bond Guarantor, the Bond Trustee and the Security Trustee
and the Bond Trustee must serve an Asset Coverage Test Breach Notice on the
Covered Bond Guarantor (subject to the Bond Trustee having actual knowledge or
express notice of the non-satisfaction of the Asset Coverage Test). The Bond
Trustee will be deemed to revoke an Asset Coverage Test Breach Notice if, on
any Determination Date falling on or prior to the third Determination Date
after the Asset Coverage Test was initially not satisfied, the Asset Coverage
Test is subsequently satisfied and neither a Notice to Pay nor a Covered Bond
Guarantee Acceleration Notice has been served. If the Bond Trustee is deemed
to revoke an Asset Coverage Test Breach Notice, the Trust Manager will
immediately notify in writing the Bond Trustee of such revocation. If the
Asset Coverage Test Breach Notice is not revoked by the Bond Trustee as
described above, an Issuer Event of Default will occur. The Bond Trustee will
then be entitled to, and in certain circumstances required to, serve an Issuer
Acceleration Notice on the Issuer. Following the service of an Issuer
Acceleration Notice, the Bond Trustee will be required to serve a Notice to
Pay on the Covered Bond Guarantor.
The Senior Demand Note Component ranks senior to payments on the Covered
Bonds, provided that the Asset Coverage Test is met.
The Demand Noteholder is entitled to require repayment of any principal amount
of the Demand Note at any time by notice in writing to the Covered Bond
Guarantor (copied to the Trust Manager). Any amount so demanded must be
repaid on the Distribution Date falling immediately after the demand is made
by the Demand Noteholder, provided that the Asset Coverage Test will continue
to be satisfied after giving effect to such repayment and that no Asset
Coverage Test Breach Notice has been given on or prior to such day which has
not been revoked.
Repayment of the Demand Note in those circumstances will be made in accordance
with the applicable Priority of Payments. In the Pre-Issuer Event of Default
Principal Priority of Payments, the Guarantee Priority of Payments and the
Post-Enforcement Priority of Payments, repayment of the Demand Note in respect
of the Senior Demand Note Component (such that the Asset Coverage Test
continues to be met after such repayment) ranks senior to the amounts due and
payable by the Covered Bond Guarantor to the Covered Bondholders and
Couponholders under the Covered Bond Guarantee and to the Intercompany
Noteholder under the Intercompany Notes. However, the amounts so due and
payable in respect of the Senior Demand Note Component must only be satisfied
by in specie distribution of the Mortgage Loan Rights to the Demand
Noteholder. This means that the Covered Bondholders and Couponholders will
not have the benefit of any voluntary over-collateralisation. This may
adversely affect the ability of the Covered Bond Guarantor to meet its
obligations under the Covered Bond Guarantee.
Failure to comply with the Asset Coverage Test or Amortisation Test may result
in the acceleration of the obligations of the Issuer and the Covered Bond
Guarantor.
The Amortisation Test is intended to ensure that, following service of an
Issuer Acceleration Notice and a Notice to Pay (but prior to service of a
Covered Bond Guarantee Acceleration Notice), the Assets of the Trust held from
time to time by the Covered Bond Guarantor do not fall below a certain
threshold to ensure that the Assets of the Trust held from time to time by the
Covered Bond Guarantor are sufficient to meet its obligations under the
Covered Bond Guarantee and senior expenses which rank in priority or pari
passu and rateably with amounts due on the Covered Bonds (see "Overview of the
Principal Documents - Establishment Deed - Amortisation Test").
If the aggregate collateral value of the Mortgage Loan Rights forming part of
the Assets of the Trust has not been maintained in accordance with the terms
of the Asset Coverage Test or the Amortisation Test, then that may affect the
realisable value of the Mortgage Loan Rights forming part of the Assets of the
Trust (both before and after the occurrence of a Covered Bond Guarantor Event
of Default) and/or the ability of the Covered Bond Guarantor to make payments
under the Covered Bond Guarantee.
Failure to satisfy the Amortisation Test on any Determination Date following
an Issuer Event of Default that is continuing will result in the Bond Trustee
serving an Amortisation Test Breach Notice on the Issuer and the Covered Bond
Guarantor and immediately upon the service of such notice, the Conversion
Event Date will occur. Upon the occurrence of the Conversion Event Date, all
Series of Covered Bonds will become Pass-Through Covered Bonds and
accordingly, payment of the unpaid amount in respect of all Series of Covered
Bonds by the Covered Bond Guarantor under the Covered Bond Guarantee will be
deferred until the Extended Due for Payment Date.
None of the Covered Bond Guarantor, the Security Trustee or the Bond Trustee
will be responsible for monitoring compliance with, nor the monitoring of, the
Asset Coverage Test or the Amortisation Test or any other test.
There is no guarantee or assurances that the Covered Bond Guarantor will be
able to sell Selected Mortgage Loan Rights following service of an Asset
Coverage Test Breach Notice or a Notice to Pay at the times required or for an
amount equal to or in excess of the Adjusted Required Redemption Amount.
Following the service of an Asset Coverage Test Breach Notice on the Covered
Bond Guarantor or the occurrence of an Issuer Event of Default and service of
a Notice to Pay on the Covered Bond Guarantor, the Trust Manager must direct
the Covered Bond Guarantor to sell Selected Mortgage Loan Rights (selected on
a basis that is representative of the Mortgage Loan Rights then forming part
of the Assets of the Trust). The proceeds from any such sale must be
deposited into the GIC Account and applied in accordance with the applicable
Priority of Payments (see "Overview of the Principal Documents - Establishment
Deed - Sale of Selected Mortgage Loan Rights following service of an Asset
Coverage Test Breach Notice" and "Overview of the Principal Documents -
Establishment Deed - Sale of Selected Mortgage Loan Rights following service
of a Notice to Pay").
There is no guarantee the Covered Bond Guarantor will, where the Covered Bond
Guarantor is obliged to sell Selected Mortgage Loan Rights, find a buyer to
buy Selected Mortgage Loan Rights at the times required and there can be no
guarantee or assurance as to the price which may be able to be obtained, which
may affect payments under the Covered Bond Guarantee. The Covered Bond
Guarantor will offer the Selected Mortgage Loan Rights for the best price
reasonably available but, in any event, following the service of an Asset
Coverage Test Breach Notice (but prior to an Issuer Event of Default and
service of a Notice to Pay on the Covered Bond Guarantor) the Selected
Mortgage Loan Rights may not be sold by the Covered Bond Guarantor for an
amount less than the Current Principal Balance of the Mortgage Loans relating
to the Mortgage Loan Rights plus the arrears of interest and accrued interest
thereon. Following an Issuer Event of Default and service of a Notice to Pay
on the Covered Bond Guarantor, the Selected Mortgage Loan Rights may not be
sold by the Covered Bond Guarantor for an amount less than the Adjusted
Required Redemption Amount for the relevant Series of Pass-Through Covered
Bonds. The Trust Manager may only direct the Covered Bond Guarantor to
proceed with any sale of Selected Mortgage Loan Rights in accordance with the
above and subsequent redemption of any Covered Bonds if such sale and
subsequent redemption will not result in an Amortisation Test Deterioration.
At any time after service of a Notice to Pay on the Covered Bond Guarantor
(but prior to service of a Covered Bond Guarantee Acceleration Notice on the
Covered Bond Guarantor and the Issuer), on each Distribution Date the Covered
Bond Guarantor will apply the Available Income Amount and the Available
Principal Amount to redeem or repay in part the relevant Series of Covered
Bonds, to the extent (a) such Series of Covered Bonds are either Pass-Through
Covered Bonds or are due and payable and; (b) that the Covered Bond Guarantor
has sufficient moneys available to make such payments in accordance with the
Guarantee Priority of Payments. The Available Principal Amount will include
the sale proceeds of Selected Mortgage Loan Rights (including any excess sale
proceeds resulting from the sale of Selected Mortgage Loan Rights sold in
respect of another Series of Covered Bonds) and all principal repayments
received on the Mortgage Loan Rights forming part of the Assets of the Trust
generally. Prior to the occurrence of the Conversion Event Date, this may
adversely affect later maturing Series of Covered Bonds.
For the purposes hereof:
Adjusted Required Redemption Amount means in relation to a Series of Covered
Bonds:
(a) the Australian Dollar Equivalent of the Required Redemption
Amount; plus or minus
(b) the Australian Dollar Equivalent of any swap termination
amounts payable under the Covered Bond Swaps corresponding to the Series to or
by the Covered Bond Guarantor less (where applicable) amounts standing to the
credit of (i) the GIC Account; and (ii) the principal balance of any
Substitution Assets and Authorised Investments (excluding all amounts to be
applied on the next following Distribution Date to repay higher ranking
amounts in the relevant Priority of Payments and those amounts that are
required to repay any Series of Covered Bonds which mature prior to or on the
same date as the relevant Series of Covered Bonds); plus or minus
(c) the Australian Dollar Equivalent of any swap termination
amounts payable to or by the Covered Bond Guarantor under any Interest Rate
Swap.
Realisation of Charged Property may not be sufficient to repay all Secured
Creditors following a Covered Bond Guarantor Event of Default.
If a Covered Bond Guarantor Event of Default occurs and entitles the Security
Trustee to enforce the Security created under and pursuant to the Security
Deed, the proceeds from the realisation of the Charged Property will be
applied by the Security Trustee towards payment of all secured obligations in
accordance with the Post-Enforcement Priority of Payments described in
"Cashflows" below.
There is no guarantee that the proceeds of realisation of the Charged Property
will be in an amount sufficient to repay all amounts due to the Secured
Creditors (including the Covered Bondholders) under the Covered Bonds and the
Programme Documents.
If a Covered Bond Guarantee Acceleration Notice is served on the Covered Bond
Guarantor and the Issuer then the Covered Bonds may be repaid sooner or later
than expected or not at all.
A number of factors may affect the realisable value of the Mortgage Loan
Rights or the ability of the Covered Bond Guarantor to make payments under the
Covered Bond Guarantee.
Following the occurrence of an Issuer Event of Default that is continuing, the
service on the Issuer and the Covered Bond Guarantor of an Issuer Acceleration
Notice and the service on the Covered Bond Guarantor (copied to the Trust
Manager) of a Notice to Pay, the realisable value of Mortgage Loan Rights
forming part of the Assets of the Trust may be reduced (which may affect the
ability of the Covered Bond Guarantor to make payments under the Covered Bond
Guarantee) by:
· representations or warranties not being given by the
Covered Bond Guarantor or (unless otherwise agreed with the Seller) the
Seller;
· default by Borrowers of amounts due on their Mortgage
Loans;
· changes to the Seller's credit and origination policies;
· the Covered Bond Guarantor not having legal title to the
Mortgage Loan Rights forming part of the Assets of the Trust;
· risks in relation to some types of Mortgage Loans which
may adversely affect the value of Mortgage Loan Rights forming part of the
Assets of the Trusts;
· limited recourse to the Seller;
· the state of the Australian economy and/or residential
mortgage market (which may impact potential buyers);
· possible regulatory changes by ASIC in Australia and
other regulatory authorities;
· regulations in Australia that could lead to some terms of
the Mortgage Loans being unenforceable; and
· other issues which impact on the enforceability of the
Mortgage Loans.
Some of these factors are considered in more detail below. However, it
should be noted that the Asset Coverage Test, the Amortisation Test and the
criteria for Eligible Mortgage Loans are intended to ensure that there will be
an adequate amount of Mortgage Loans forming part of the Assets of the Trust
and moneys standing to the credit of the GIC Account to enable the Covered
Bond Guarantor to repay the Covered Bonds following the service of an Issuer
Acceleration Notice on the Issuer and service of a Notice to Pay on the
Covered Bond Guarantor and accordingly it is expected (but there is no
assurance) that Selected Mortgage Loan Rights could be realised for sufficient
values to enable the Covered Bond Guarantor to meet its obligations under the
Covered Bond Guarantee. In addition, any sale of Selected Mortgage Loan Rights
and subsequent redemption of any Covered Bonds by the Covered Bond Guarantor
following the service of an Asset Coverage Test Breach Notice on the Covered
Bond Guarantor or an Issuer Event of Default and the service of a Notice to
Pay on the Covered Bond Guarantor, can only proceed if such sale and
subsequent redemption does not result in an Amortisation Test Deterioration.
No representations or warranties will be given by the Covered Bond Guarantor
or the Seller if Selected Mortgage Loan Rights are to be sold.
Following the occurrence of an Issuer Event of Default, service on the Issuer
and the Covered Bond Guarantor of an Issuer Acceleration Notice and service on
the Covered Bond Guarantor (copied to the Trust Manager) of a Notice to Pay
(but prior to the service of a Covered Bond Guarantee Acceleration Notice),
the Covered Bond Guarantor will be obliged to sell Selected Mortgage Loan
Rights to third party purchasers, subject to the rights of repurchase enjoyed
by the Seller pursuant to the terms of the Mortgage Sale Agreement (see
"Overview of the Principal Documents - Mortgage Sale Agreement - Seller's
right of repurchase in respect of Selected Mortgage Loan Rights"). In
respect of any sale of Selected Mortgage Loan Rights to third parties,
however, neither the Covered Bond Guarantor nor the Seller will be permitted
to give representations, warranties or indemnities in respect of those
Selected Mortgage Loan Rights (unless expressly permitted to do so by the
Security Trustee and otherwise agreed with the Seller). There is no
assurance that the Seller would give any warranties or representations in
respect of the Selected Mortgage Loan Rights originated by it and sold to the
Covered Bond Guarantor. Any Representations or Warranties previously given
by the Seller in respect of the Mortgage Loans forming part of the Assets of
the Trust may not have value for a third party purchaser if the Seller is then
insolvent. Accordingly, there is a risk that the realisable value of the
Selected Mortgage Loan Rights could be adversely affected by the lack of
representations and warranties which in turn could adversely affect the
ability of the Covered Bond Guarantor to meet its obligations under the
Covered Bond Guarantee.
A deterioration in the Australian housing market could adversely affect the
ability of the Covered Bond Guarantor to make payments under the Covered Bond
Guarantee.
The Issuer's business includes mortgage lending in Australia with loans
secured against residential property. Any deterioration in the quality of
the Mortgage Loan Rights forming part of the Assets of the Trust could have an
adverse effect on the Covered Bond Guarantor's ability to make payment under
the Covered Bond Guarantee. There can be no assurance that the housing market
will not deteriorate. An increase in household indebtedness, a decline in
house prices or an increase in interest rates could have an adverse effect on
the Australian mortgage market, which could be exacerbated by different types
of mortgages in the market, such as interest-only loans.
The current Australian economic environment may affect the rate at which the
Seller originates new Mortgage Loans and may also affect the level of
attrition of the Seller's existing Borrowers, which could in turn adversely
affect the ability of the Covered Bond Guarantor to make payments under the
Covered Bond Guarantee. There has not been any severe deterioration in the
Australian mortgage market as a whole in recent years.
Regional economic declines may adversely affect the ability of the Covered
Bond Guarantor to make payments under the Covered Bond Guarantee.
To the extent that specific geographic regions have experienced or may
experience in the future weaker regional economic conditions and housing
markets than other regions, a concentration of the Mortgage Loans in such a
region may be expected to exacerbate all of the risks relating to the Mortgage
Loans described in this section. The Covered Bond Guarantor can predict
neither when nor where such regional economic declines may occur nor to what
extent or for how long such conditions may continue but if the timing and
payment of the Mortgage Loans forming part of the Assets of the Trust is
adversely affected as described above, the ability of the Covered Bond
Guarantor to make payments under the Covered Bond Guarantee could be reduced
or delayed.
Default by Borrowers in paying amounts due on their Mortgage Loans could
affect the ability of the Covered Bond Guarantor to make payments under the
Covered Bond Guarantee.
Borrowers may default on their obligations due under the Mortgage Loans.
Defaults may occur for a variety of reasons. The Mortgage Loans are affected
by credit, liquidity and interest rate risks. Various factors influence
mortgage delinquency rates, prepayment rates, repossession frequency and the
ultimate payment of interest and principal on the Mortgage Loans. These
factors include changes in the national, regional or international economic
climate such as: volatility in interest rates; lack of liquidity in wholesale
funding markets in periods of stressed economic conditions, economic or
political crisis; illiquidity and downward price pressure; commencement of
recession and employment fluctuations; the availability of financing; consumer
perception as to the continuing availability of credit and price competition
which may have an adverse impact on delinquency and repossession rates;
inflation; yields on alternative investments; and political developments and
government policies, including changes in tax laws. Given that the majority
of Mortgage Loans have a variable rate of interest, most Mortgage Loans are
sensitive to changes in monetary policy and interest rates. Other factors in
Borrowers' individual, personal or financial circumstances may also affect the
ability of Borrowers to repay the Mortgage Loans. Loss of earnings, illness,
divorce and other similar factors may lead to an increase in delinquencies by,
and bankruptcies of, Borrowers and could ultimately have an adverse impact on
the ability of Borrowers to repay the Mortgage Loans.
The rate of prepayments on Mortgage Loans may be increased due to Borrowers
refinancing their Mortgage Loans and sales of any property charged by a
Mortgage (either voluntarily by Borrowers or as a result of enforcement action
taken), as well as the receipt of proceeds from buildings insurance and life
assurance policies. The rate of prepayment of Mortgage Loans may also be
influenced by the presence or absence of early repayment charges.
In addition, the ability of a Borrower to sell a property charged by a
Mortgage which secures a Mortgage Loan at a price sufficient to repay the
amounts outstanding under that Mortgage Loan will depend upon a number of
factors, including the availability of buyers for that property, the value of
that property and property values and the property market in general at the
time of such proposed sale. The downturn in the Australian economy has had
and could continue to have a negative effect on the housing market.
Further, the mortgage loan market in Australia is highly competitive. This
competitive environment may affect the rate at which the Seller originates new
Mortgage Loans and may also affect the repayment rate of existing Mortgage
Loans.
If the timing and payment of the Mortgage Loans is adversely affected by any
of the risks described above, the ability of the Covered Bond Guarantor to
make payments under the Covered Bond Guarantee could be reduced or delayed.
The Current Principal Balance of any Defaulted Mortgage Loans forming part of
the Assets of the Trust will be given no value for the purposes of any
calculation of the Asset Coverage Test and the Amortisation Test.
Enforcement of Mortgage Loans can involve substantial costs and delays and may
not permit full recovery by the Servicer
In order to enforce the Mortgage Loans in certain situations, such as
Defaulted Mortgage Loans, a court order or other judicial or administrative
proceedings may be needed in order to establish the Borrower's obligation to
pay and to enable a sale by executive measures. Such proceedings may involve
substantial legal costs and delays before the Servicer is able to enforce such
Defaulted Mortgage Loan and any related Mortgage Loan Rights. Such proceedings
may face a variety of impediments, including, but not limited to: (i)
regulatory and judicial policies and procedures designed to protect borrowers'
rights, (ii) judicial or administrative proceedings instigated by borrowers,
other creditors or other third parties, (iii) changes in applicable law that
may affect the enforceability or amount recoverable in respect of Mortgage
Loans and (iv) equitable judicial powers that could delay or halt judicial
enforcement proceedings. Even if a sale is successfully completed, the value
recovered from a Defaulted Mortgage Loan will also depend upon the prevailing
market conditions. Pursuant to the Servicing Deed, the Servicer is not
required to pursue such enforcement if it has reasonable grounds to believe
that the expenses of such litigation may outweigh the proceeds from such
litigation.
The value of the Mortgage Loan Rights may decline, which may result in losses
to the Covered Bondholders.
The guarantee granted by Covered Bond Guarantor in respect of the Covered
Bonds, will, inter alia, be backed by the Covered Bond Guarantor's interest in
the Mortgage Loan Rights forming part of the Assets of the Trust (through its
right of indemnity from the Assets of the Trust). Since the economic value
of the Mortgage Loan Rights forming part of the Assets of the Trust may
increase or decrease, the value of the Trust's Assets may decrease (for
example if there is a general decline in property values). Neither the
Issuer nor the Covered Bond Guarantor makes any representation, warranty or
guarantee that the value of a Mortgaged Property will remain at the same level
as it was on the date of the origination of the related Mortgage Loan or at
any other time. The value of the Mortgage Loan Rights forming part of the
Assets of the Trust may be significantly reduced by the overall decline in
property values experienced by the residential property market in Australia
and may also be further reduced by any additional decline in such property
values. This, ultimately, may result in losses to the Covered Bondholders if
such security is required to be enforced.
The Seller's credit and origination policies may be revised from time to time,
which may affect the ability of the Covered Bond Guarantor to make payments
under the Covered Bond Guarantee.
Each of the Mortgage Loans forming part of the Assets of the Trust originated
by the Seller will have been originated in accordance with the Seller's credit
and origination policies applicable at the time of origination. The Seller's
credit and origination policies consider a variety of factors such as a
potential Borrower's credit history, employment history and status and
repayment ability, as well as the value of the Mortgaged Property to be
mortgaged. The Seller retains the right to revise its credit and origination
policies from time to time.
If any new Mortgage Loans which have been originated under revised credit and
origination policies are then sold to the Covered Bond Guarantor pursuant to
the terms of the Mortgage Sale Agreement, notwithstanding that such Mortgage
Loans would need to be Eligible Mortgage Loans and the subject of
Representations and Warranties given in the Mortgage Sale Agreement by the
Seller, the characteristics of the Mortgage Loans forming part of the Assets
of the Trust could at such time change. This could lead to a delay or
reduction in the payments received by the Covered Bondholders under the
Covered Bond Guarantee.
The Servicer may initiate certain changes to the Mortgage Documents, which
could impact the rates of principal repayment on the Mortgage Loans.
Most frequently, the Servicer will change the interest rate applying to a
Mortgage Loan. In addition, subject to certain conditions, the Servicer may
from time to time offer additional features and/or products with respect to
the Mortgage Loans.
As a result of such changes, the characteristics of the Mortgage Loans may
differ from the characteristics of the Mortgage Loans at any other time. If
the Servicer elects to change certain features of the Mortgage Loans, this
could result in different rates of principal repayment on the Mortgage Loans
than initially anticipated.
The Seller will initially retain legal title to the Mortgage Loan Rights,
which may affect the ability of the Covered Bond Guarantor to make payments
under the Covered Bond Guarantee.
The Seller will initially retain legal title to the Mortgage Loan Rights and
custody of the Mortgage Documents in respect of such Mortgage Loan Rights. The
Covered Bond Guarantor will initially hold only equitable title to the
Mortgage Loan Rights forming part of the Assets of the Trust as the Borrower
in respect of the relevant Mortgage Loan will not be notified of the
assignment of that Mortgage Loan Rights in respect of that Mortgage Loan to
the Covered Bond Guarantor. This is different to holding legal title which
would require that the Covered Bond Guarantor not only has possession of the
mortgage title documents, but also that transfers of Mortgages to the Covered
Bond Guarantor be filed with the land title offices in the appropriate
Australian jurisdictions and that notice of such assignment be given to the
Borrower. The Covered Bond Guarantor will take certain steps to protect its
interest in, and title to, the Mortgage Loan Rights forming part of the Assets
of the Trust if and only in the limited circumstances described in "Overview
of the Principal Documents - Mortgage Sale Agreement -Transfer of Title to the
Mortgage Loan Rights to the Covered Bond Guarantor" and until such right
arises the Covered Bond Guarantor will not give notice of the sale of the
Mortgage Loan Rights to any Borrower or register or record its interest in the
Mortgages at any land title offices or take any other steps to perfect its
title to the Mortgages.
At any time during which the Covered Bond Guarantor does not hold legal title
to the Mortgage Loan Rights forming part of the Assets of the Trust, the
following risks exist:
(a) first, if the Seller wrongly sells Mortgage Loan Rights to
another person when such Mortgage Loan Rights have already been sold to the
Covered Bond Guarantor, that other person would acquire an interest in such
Mortgage Loan Rights either:
(i) free of any interest of the Covered Bond Guarantor, if
that acquisition was made for value and any security interest held by the
Covered Bond Guarantor in relation to the Mortgage Loan Rights was not
perfected for the purposes of the PPSA at the time of acquisition; or
(ii) ranking in priority to the Covered Bond Guarantor's
interest, if that person acquires a perfected security interest in the
Mortgage Loan Rights where the Covered Bond Guarantor's interest was not
perfected for the purposes of the PPSA at the time that person's security
interest was perfected.
However, the risk of third party claims obtaining priority to the interests of
the Covered Bond Guarantor would be likely to be limited to circumstances
arising from a breach by the Seller of its contractual obligations or fraud,
negligence or mistake on the part of the Seller or the Covered Bond Guarantor
or their respective personnel or agents. Additionally, for the purpose of
protecting the Covered Bond Guarantor's interests and security interests in
the Mortgage Loan Right, the Trust Manager has agreed to do all things
reasonably necessary to permit any security interest held by the Covered Bond
Guarantor in relation to the Mortgage Loan Rights to be perfected by
registration on the PPSR. However, if such registration is not completed or is
completed incorrectly, the Covered Bond Guarantor's security interest in
relation to Mortgage Loan Rights may not be perfected and a third party may be
able to take an interest in such Mortgage Loan Rights free of any interest
held by the Covered Bond Guarantor or take a security interest which ranks in
priority to any security interest of the Covered Bond Guarantor;
(b) second, until notice of the transfer to the Covered Bond
Guarantor has been provided to the relevant Borrowers, the rights of the
Covered Bond Guarantor may be subject to the rights of the Borrowers against
the Seller, as applicable, such as rights of set-off, which occur in relation
to transactions made between Borrowers and the Seller, and the rights of
Borrowers to redeem their Mortgages by repaying the Mortgage Loans directly to
the Seller. In addition, section 80(7) of the PPSA provides that an obligor in
relation to a receivable will be entitled to make payments to, and obtain a
good discharge from, the seller of the receivable rather than directly to, and
from, the purchaser of the receivable until such time as the obligor receives
a notice of the assignment of the relevant receivable that complies with the
requirements of section 80(7)(a) of the PPSA (including a statement that
payment is to be made to the purchaser of the receivable). If, however, an
obligor receives a notice that complies with the requirements of section
80(7)(a) of the PPSA from any person other than the seller of the receivable,
the obligor requests the purchaser of the receivable to provide proof of the
assignment and the purchaser of the receivable fails to provide that proof
within 5 business days of the request, the obligor may continue to make
payments to the seller. Accordingly, after a Perfection of Title Event has
occurred and legal title to the Mortgage Loan Rights has been transferred to
the Covered Bond Guarantor, a Borrower in relation to any Mortgage Loan may in
certain circumstances nevertheless make payments to the Seller and obtain a
good discharge from the Seller notwithstanding the legal assignment of the
relevant Mortgage Loan Rights to the Covered Bond Guarantor, if the Covered
Bond Guarantor fails to comply with these notice requirements. However, this
risk is mitigated by the fact that the Seller has provided the Covered Bond
Guarantor with powers of attorney to permit it to give notice of such an
assignment of the Mortgage Loan Rights to the relevant Borrower in the name of
the Seller; and
(c) third, unless the Covered Bond Guarantor, or the Trust
Manager, has perfected the Covered Bond Guarantor's title to the Mortgage Loan
Rights (which it is only entitled to do in certain limited circumstances), the
Covered Bond Guarantor would not be able to enforce any Borrower's obligations
under any Mortgage Loan Rights itself but would have to join the Seller as a
party to any legal proceedings.
If the risks described in paragraphs (a), (b) or (c) above were to occur, then
the realisable value of the Mortgage Loan Rights forming part of the Assets of
the Trust and/or the ability of the Covered Bond Guarantor to make payments
under the Covered Bond Guarantee may be affected.
There is limited recourse to the Seller in respect of a breach of
Representation and Warranty.
The Covered Bond Guarantor, the Bond Trustee and the Security Trustee will not
undertake any investigations, searches or other actions in respect of any
Mortgage Loan Rights and will rely instead on the Representations and
Warranties given in the Mortgage Sale Agreement by the Seller in respect of
the Mortgage Loans sold by the Seller to the Covered Bond Guarantor.
In the event of a material breach of any of the Representations and Warranties
made by the Seller or if any of the Representations and Warranties proves to
be materially untrue, in each case in respect of any Mortgage Loan Rights
forming part of the Assets of the Trust as at the date at which these are
given (having regard in determining materiality to, among other things,
whether a loss is likely to be incurred in respect of the Mortgage Loan to
which the breach relates after taking into account the likelihood of
recoverability or otherwise of any sums under any applicable Insurance
Policies), then following notice being given by the Trust Manager or the
Seller to the Covered Bond Guarantor or the Covered Bond Guarantor giving
notice to the Seller, if the breach is not remedied to the Covered Bond
Guarantor's satisfaction within five AU Business Days of the Seller or the
Trust Manager giving or receiving the notice, the Seller will be required to
pay the Covered Bond Guarantor an amount equal to the sum of the Current
Principal Balance of the relevant Mortgage Loan and arrears of interest and
accrued interest, following which the Covered Bond Guarantor will treat the
Mortgage Loan as having been paid in full and will hold the relevant Mortgage
Loan Rights as trustee of the BOQ Trust.
There can be no assurance that the Seller, in the future, will have the
financial resources to repurchase Mortgage Loan Rights from the Covered Bond
Guarantor. However, if the Seller does not repurchase those Mortgage Loan
Rights which are in material breach of the Representations and Warranties,
then the LVR Adjusted Mortgage Loan Balance Amount or the Asset Percentage
Adjusted Mortgage Loan Balance Amount of those Mortgage Loans (as applicable)
will be deducted from the calculation of the Adjusted Aggregate Mortgage Loan
Amount in the calculation of the Asset Coverage Test (except for any Defaulted
Mortgage Loans, which for the purposes of calculating the LVR Adjusted
Mortgage Loan Balance Amount and the Asset Percentage Adjusted Mortgage Loan
Balance Amount, as the case may be, are given a zero value). There is no
further recourse to the Seller in respect of a material breach of a
Representation or Warranty. The sole remedy is as described above.
RISK FACTORS RELATED TO THE COVERED BONDS
Risks related to the structure of a particular issue of Covered Bonds
A range of Covered Bonds may be issued under the Programme. A number of
these Covered Bonds may have features which contain particular risks for
potential investors. Set out below is a description of the material known
risks of the most common such features.
Further issue of Covered Bonds under the Programme may adversely affect the
existing Covered Bondholders.
Save in respect of the first issue of Covered Bonds issued under the
Programme, Covered Bonds issued under the Programme will either be fungible
with an existing Series of Covered Bonds (in which case they will form part of
such Series) or have different terms from an existing Series of Covered Bonds
(in which case they will constitute a new Series).
All Covered Bonds issued from time to time will rank pari passu with each
other in all respects (save as set out in the Guarantee Priority of Payments)
and will share in the security granted by the Covered Bond Guarantor under the
Security Deed. Prior to the occurrence of a Covered Bond Guarantor Event of
Default, if an Issuer Event of Default occurs in respect of a particular
Series of Covered Bonds then, following the service of an Issuer Acceleration
Notice on the Issuer (copied to the Covered Bond Guarantor) and service of a
Notice to Pay on the Covered Bond Guarantor, the Covered Bonds of all Series
then outstanding will accelerate at the same time as against the Issuer but
will be subject to, and have the benefit of, payments made by the Covered Bond
Guarantor under the Covered Bond Guarantee. If a Covered Bond Guarantor
Event of Default occurs in respect of a particular Series of Covered Bonds,
then following the service of a Covered Bond Guarantee Acceleration Notice,
the Covered Bonds of all Series outstanding will accelerate as against the
Issuer (if not already accelerated following the occurrence of an Issuer Event
of Default and the service on the Issuer and the Covered Bond Guarantor of an
Issuer Acceleration Notice) and the obligations of the Covered Bond Guarantor
under the Covered Bond Guarantee will accelerate.
In order to help ensure that any further issue of Covered Bonds under the
Programme does not adversely affect the existing Covered Bondholders:
· the Issuer (as Intercompany Note Subscriber) will be
obliged to subscribe for an Intercompany Note issued by the Covered Bond
Guarantor in an amount equal to either (i) the Principal Amount Outstanding of
such further issue of Covered Bonds; or (ii) the Australian Dollar Equivalent
of the nominal value of such further issue of Covered Bonds, and for a
matching term. The Covered Bond Guarantor will use the proceeds of such
issue (if not denominated in Australian Dollars, upon exchange into Australian
Dollars under the applicable Non-Forward Starting Covered Bond Swap) only: (i)
to fund (in whole or in part) the Consideration for Mortgage Loan Rights
purchased from the Seller in accordance with the terms of the Mortgage Sale
Agreement; and/or (ii) to invest in Substitution Assets in an amount not
exceeding the prescribed limits (as specified in the Establishment Deed) to
the extent required to meet the Asset Coverage Test and thereafter the Covered
Bond Guarantor may use such proceeds (subject to compliance with the Asset
Coverage Test) only:
(a) to make a repayment of the Demand Note in respect of the
Senior Demand Note Component provided that the Trust Manager has determined
that the Asset Coverage Test will continue to be met after giving effect to
such repayment; and/or
(b) if an existing Series or Tranche, or part of an existing
Series or Tranche, of Covered Bonds is being refinanced (by the issue of a
further Series or Tranche of Covered Bonds to which the Intercompany Note
relates), to repay the Intercompany Note(s) corresponding to the Covered Bonds
being so refinanced (after exchange into the currency of the Intercompany Note
being repaid (if necessary)); and/or
(c) to make a deposit of all or part of the proceeds in the GIC
Account (including to fund the Reserve Fund up to an amount equal to the
Reserve Fund Required Amount); and
· the Asset Coverage Test will be required to be met both
before and immediately after any further issue of Covered Bonds.
The Seller will, subject to the satisfaction of certain conditions (including
the criteria for Eligible Mortgage Loans), be permitted to sell further
Mortgage Loan Rights to the Covered Bond Guarantor from time to time.
Covered Bonds are subject to Optional Redemption by the Issuer, which may
limit their market value.
If an Issuer Call is specified in the Applicable Final Terms (or, in the case
of Exempt Covered Bonds, the Applicable Pricing Supplement), the Issuer may
elect to redeem all or some of the Covered Bonds at the Optional Redemption
Amount (specified in the Applicable Final Terms (or, in the case of Exempt
Covered Bonds, the Applicable Pricing Supplement)) plus accrued interest. An
optional redemption feature of Covered Bonds is likely to limit the market
value of such Covered Bonds. During any period when the Issuer may elect to
redeem Covered Bonds, the market value of those Covered Bonds generally will
not rise substantially above the price at which they can be redeemed. This
also may be true prior to any redemption period.
The Issuer may be expected to redeem Covered Bonds when its cost of borrowing
is lower than the interest rate on the Covered Bonds. At those times, an
investor generally would not be able to reinvest the redemption proceeds at an
effective interest rate as high as the interest rate on the Covered Bonds
being redeemed and may only be able to do so at a significantly lower rate.
Potential investors should consider reinvestment risk in light of other
investments that are likely to be available at that time.
The value of Fixed Rate Covered Bonds may be adversely affected by movements
in market interest rates.
Investment in Fixed Rate Covered Bonds involves the risk that if market
interest rates subsequently increase above the rate paid on Fixed Rate Covered
bonds, this will adversely affect the value of the Fixed Rate Covered Bonds.
If a Covered Bond is issued without the benefit of tax gross-up, its returns
and market value may be affected.
The Issuer may issue Covered Bonds without any obligation to gross-up the
relevant Covered Bondholders or Couponholders in the event it is required to
make a withholding or deduction in respect of a payment made by it in relation
to the Covered Bonds by any law or regulation or the administrative practice
of any jurisdiction. This may affect the return of relevant Covered
Bondholders or Couponholders in respect of the Covered Bonds and may affect
the market value of those Covered Bonds.
Withdrawal or downgrading of the initial ratings of the Covered Bonds, the
issuance of unsolicited ratings on the Covered Bonds, or unfavourable
regulatory actions with respect to Moody's or Fitch may adversely affect the
value of the Covered Bonds.
It is a condition to the issuance of the Covered Bonds that the Covered Bonds
receive appropriate credit ratings from Fitch and Moody's. A credit rating
is not a recommendation to purchase, hold or sell the Covered Bonds, inasmuch
as such credit rating does not address the market price or the suitability for
a particular investor of a security. The credit rating of the Covered Bonds
addresses the likelihood of the repayment of principal and the payment of
interest on the Covered Bonds pursuant to their terms but does not address the
timing of distributions of principal on the Covered Bonds prior to their Final
Maturity Date, or their Extended Due Date for Payment. There is no assurance
that a Covered Bond will remain outstanding for any given period of time or
that a credit rating will not be lowered or withdrawn entirely by a Rating
Agency, if in its judgment circumstances in the future so warrant. Any
action taken by a Rating Agency to lower or withdraw the credit rating on a
Covered Bond could adversely affect the value of that Covered Bond on
resale. In addition, if a Rating Agency issues a credit rating lower than
the solicited credit rating, changes its credit rating or withdraws its credit
rating, no one has any obligation to provide additional credit enhancement or
to restore the original credit rating. Investors should make their own
evaluation of an investment in the Covered Bonds and not rely solely on the
credit ratings assigned to the Covered Bonds. See "Credit ratings assigned
to the Covered Bonds may change and may not reflect all risks associated with
an investment in the Covered Bonds" below.
Credit ratings assigned to the Covered Bonds may change and may not reflect
all risks associated with an investment in the Covered Bonds.
The credit ratings assigned to a Series of Covered Bonds to be issued under
the Programme by Fitch address the probability of default and of the recovery
given a default of the Covered Bonds, the likelihood of full and timely
payment to holders of Covered Bonds of all payments of interest on each
Interest Payment Date and the likelihood of timely payment of principal in
relation to the Covered Bonds. The credit rating assigned to the Covered
Bonds by Moody's address the probability of default, the loss given by default
and the expected loss posed to potential investors.
The expected ratings of a Series of the Covered Bonds will be set out in the
Applicable Final Terms for such Series of Covered Bonds (or, in the case of
Exempt Covered Bonds, the Applicable Pricing Supplement). In addition, the
Final Terms or Pricing Supplement, as the case may be, will specify which
Rating Agencies are giving a credit rating to the relevant Series of Covered
Bonds. The relevant Series of Covered Bonds may be rated by one or more
Rating Agencies as set out therein. Any Rating Agency may lower its rating
or withdraw its rating if, in the sole judgment of the Rating Agency, the
credit quality of the Covered Bonds has declined or is in question.
In the event that a rating assigned to the Covered Bonds or the Issuer is
subsequently lowered or withdrawn or qualified for any reason, no person or
entity is obliged to provide any additional support or credit enhancement with
respect to the Covered Bonds, the Issuer may be adversely affected, the market
value of the Covered Bonds is likely to be adversely affected and the ability
of the Issuer to make payment under the Covered Bonds may be adversely
affected.
In addition, at any time any Rating Agency may revise its relevant rating
methodology with the result that, amongst other things, any rating assigned to
the Covered Bonds may be lowered. If any rating assigned to the Covered Bonds
is lowered or withdrawn, the market value of the Covered Bonds may reduce.
Rating agencies other than the Rating Agencies could seek to rate the Covered
Bonds and if such unsolicited ratings are lower than the comparable ratings
assigned to the Covered Bonds by a Rating Agency, those unsolicited ratings
could have an adverse effect on the value of the Covered Bonds. For the
avoidance of doubt and unless the context otherwise requires, any reference to
"ratings" or "rating" in this Prospectus is to the ratings assigned by a
Rating Agency only.
A rating is not a recommendation to buy, sell or hold securities and may be
subject to revision, suspension or withdrawal at any time (including as a
result of changes to rating methodologies). A credit rating may not reflect
the potential impact of all of the risks related to the structure, market,
additional factors discussed above and other factors that may affect the value
of the Covered Bonds. A downgrade in the rating of the Issuer or the
sovereign rating of Australia may have a negative impact on the credit ratings
of the Covered Bonds.
In general, European regulated investors are restricted under the CRA
Regulation from using credit ratings for regulatory purposes in the EEA,
unless such ratings are issued by a credit rating agency established in the
EEA and registered under the CRA Regulation (and such registration has not
been withdrawn or suspended), subject to transitional provisions that apply in
certain circumstances whilst the registration application is pending. Such
general restriction will also apply in the case of credit ratings issued by
third country non-EEA credit rating agencies, unless the relevant credit
ratings are endorsed by an EEA-registered credit rating agency or the relevant
third country rating agency is certified in accordance with the CRA Regulation
(and such endorsement action or certification, as the case may be, has not
been withdrawn or suspended). The list of registered and certified rating
agencies published by ESMA on its website in accordance with the CRA
Regulation is not conclusive evidence of the status of the relevant rating
agency included in such list, as there may be delays between certain
supervisory measures being taken against a relevant rating agency and the
publication of the updated ESMA list.
Investors regulated in the UK are subject to similar restrictions under the UK
CRA Regulation. As such, UK regulated investors are required to use for UK
regulatory purposes ratings issued by a credit rating agency established in
the UK and registered under the UK CRA Regulation. In the case of ratings
issued by third country non-UK credit rating agencies, third country credit
ratings can either be: (a) endorsed by a UK registered credit rating agency;
or (b) issued by a third country credit rating agency that is certified in
accordance with the UK CRA Regulation. Note this is subject, in each case, to
(a) the relevant UK registration, certification or endorsement, as the case
may be, not having been withdrawn or suspended, and (b) transitional
provisions that apply in certain circumstances.
If the status of the rating agency rating the Covered Bonds changes for the
purposes of the CRA Regulation or the UK CRA Regulation, relevant regulated
investors may no longer be able to use the rating for regulatory purposes in
the EEA or the UK, as applicable, and the Covered Bonds may have a different
regulatory treatment, which may impact the value of the Covered Bonds and
their liquidity in the secondary market.
Neither of the Rating Agencies is established in the European Union or UK, and
neither of the Rating Agencies has applied for registration under the CRA
Regulation or UK CRA Regulation. However their credit ratings with respect to
certain Series or Tranches of Covered Bonds have been endorsed. The rating by
Moody's has been endorsed by Moody's Deutschland GmbH and the rating by Fitch
has been endorsed by Fitch Ratings Ireland Limited, each in accordance with
the CRA Regulation, and have not been withdrawn. Moody's Deutschland GmbH and
Fitch Ratings Ireland Limited are established in the EU and registered under
the CRA Regulation. The rating by Moody's has been endorsed by Moody's
Investors Service Ltd and the rating by Fitch has been endorsed by Fitch
Ratings Limited, in each case in accordance with the UK CRA Regulation and
have not been withdrawn. References in this Prospectus to Moody's and/or
Fitch shall be construed accordingly. There can be no assurance that the
endorsement of the credit ratings in the EU or the UK of Moody's and Fitch
will continue.
The ratings assigned to a Series or Tranche of Covered Bonds to be issued
under the Programme will be specified in the Applicable Final Terms (or, in
the case of Exempt Covered Bonds, the Applicable Pricing Supplement). Whether
or not each credit rating applied for in relation to a Series or Tranche of
Covered Bonds will be issued by a credit rating agency established in the
European Union and registered under the CRA Regulation, or in the UK and
registered under the UK CRA Regulation, will be disclosed in the Applicable
Final Terms.
A Rating Agency may be removed as a rating agency on the Programme unless the
requisite number of Covered Bondholders object to such removal.
There is no assurance that both Rating Agencies will rate the Covered Bonds up
to their relevant Final Maturity Date. Covered Bondholders should note that
pursuant to Condition 14, the Bond Trustee and the Security Trustee are
required to concur in and effect any modifications required to any of the
Programme Documents to accommodate the removal of any one of the Rating
Agencies from the Programme or the addition of any Rating Agency, provided
that:
(a) at all times, there are at least two rating agencies rating
the Programme and any Covered Bonds then outstanding; and
(b) in respect of the removal of any one of the Rating Agencies
from the Programme only:
(i) the Issuer has provided at least 30 calendar days' notice
to the Covered Bondholders of the proposed modification effecting the removal
in the manner provided in Condition 13 and by publication on Bloomberg on the
"Company News" screen relating to the Covered Bonds; and
(ii) Covered Bondholders holding, in aggregate, at least 10 per
cent. of the Principal Amount Outstanding of the Covered Bonds of all Series
then outstanding (with the Covered Bonds of all Series taken together as a
single Series and, if the nominal amount of the Covered Bonds is not
denominated in Australian Dollars, converted into Australian Dollars at the
relevant Swap Rate) have not notified the Bond Trustee in writing (or
otherwise in accordance with the then current practice of any relevant
Clearing System through which such Covered Bonds may be held) within the
notification period referred to in paragraph (b)(i) above that such Covered
Bondholders do not consent to the proposed modification effecting the removal.
If Covered Bondholders holding, in aggregate, at least 10 per cent. of the
Principal Amount Outstanding of the Covered Bonds of all Series then
outstanding (with the Covered Bonds of all Series taken together as a single
Series and, if the nominal amount of the Covered Bonds is not denominated in
Australian Dollars, converted into Australian Dollars at the relevant Swap
Rate) have notified the Bond Trustee in writing (or otherwise in accordance
with the then current practice of any relevant Clearing System through which
such Covered Bonds may be held) within the notification period referred to in
paragraph (b)(i) above that they do not consent to the proposed modification
effecting the removal (an Objected Modification), then such Objected
Modification will not be made unless the Bond Trustee is (a) so directed by an
Extraordinary Resolution of the Covered Bondholders of the relevant one or
more Series with the Covered Bonds of all such Series taken together as a
single Series (and, if applicable, converted into Australian Dollars at the
relevant Swap Rate) or (b) requested to do so in writing by Covered
Bondholders holding not less than 25 per cent. of the Principal Amount
Outstanding of the Covered Bonds of the relevant one or more Series (with the
Covered Bonds of all such Series taken together as a single Series and, if
applicable, converted into Australian Dollars at the relevant Swap Rate) then
outstanding and at all times then only if the Bond Trustee is first
indemnified and/or secured and/or prefunded to its satisfaction against all
Liabilities to which it may thereby render itself liable or which it may incur
by so doing.
Objections made in writing other than through the relevant Clearing System
must be accompanied by evidence to the Bond Trustee's satisfaction (having
regard to prevailing market practices) of the relevant Covered Bondholder's
holding of the Covered Bonds.
A Rating Affirmation Notice may not address certain matters that may be of
relevance to Covered Bondholders.
Each Series or Tranche of Covered Bonds to be issued under the Programme will,
unless otherwise specified in the Applicable Final Terms (or, in the case of
Exempt Covered Bonds, the Applicable Pricing Supplement), be rated "Aaa" by
Moody's and "AAA" by Fitch. A credit rating is not a recommendation to buy,
sell or hold securities and may be subject to revision, suspension or
withdrawal at any time by the assigning Rating Agency. There is no obligation
on the Issuer to maintain the credit ratings in respect of any Series of
Covered Bonds.
The terms of certain of the Programme Documents provide that, if certain
events or circumstances occur, the Issuer must deliver a notice in writing to
the Covered Bond Guarantor (and copied to the Trust Manager and each Rating
Agency) confirming that it has notified each Rating Agency of the event or
circumstances and that the Issuer is satisfied, for the purposes of the
Programme Documents, following discussions with each Rating Agency, that the
event or circumstances, as applicable, will not result in a reduction,
qualification or withdrawal of the ratings then assigned by such Rating Agency
(a Rating Affirmation Notice). Any Rating Affirmation Notice, if given, will
be given on the basis of the facts and circumstances prevailing at the
relevant time, and in the context of cumulative changes to the transaction of
which the securities form part since the issuance closing date. A Rating
Affirmation Notice is given on the basis that it will not be construed as
advice for the benefit of any parties to the transaction. If a Rating Agency
confirmation is required for the purposes of the Programme Documents and the
Rating Agency does not consider such confirmation necessary, does not respond
to a written request for a discussion by the Issuer or does not provide a
confirmation in writing in connection with a Rating Affirmation Notice to be
given by the Issuer in respect of any event or circumstance, the Issuer will
be entitled to assume that the then current rating of the Covered Bonds from
that Rating Agency will not be downgraded, qualified or withdrawn by such
Rating Agency as a result of such event or circumstance. However, such
non-response or co-operation will not be interpreted to mean that such Rating
Agency has given any deemed confirmation or affirmation of rating or other
response in respect of such action or step. It should be noted that,
depending on the timing of delivery of the request and any information needed
to be provided as part of any such request, it may be the case that a Rating
Agency cannot provide a confirmation, affirmation or response in the time
available or at all, and the Rating Agency will not be responsible for the
consequences thereof. Such confirmation, affirmation or response if given,
will be given on the basis of the facts and circumstances prevailing at the
relevant time, and in the context of cumulative changes to the transaction of
which the securities form part since the issuance closing date.
By acquiring the Covered Bonds, investors will be deemed to have acknowledged
and agreed that, notwithstanding the foregoing, a credit rating is an
assessment of credit and does not address other matters that may be of
relevance to Covered Bondholders including, without limitation, in the case of
discussions undertaken by a Rating Agency in the context of a Rating
Affirmation Notice to be issued by the Issuer, whether any action proposed to
be taken by the Issuer, the Covered Bond Guarantor, the Seller, the Servicer,
the Trust Manager, the Bond Trustee, the Security Trustee or any other party
to a Programme Document is either (i) permitted by the terms of the relevant
Programme Document, or (ii) in the best interests of, or not materially
prejudicial to, some or all of the Covered Bondholders. The fact that the
Rating Agencies have not advised that the then current ratings of the Covered
Bonds would not be adversely affected or withdrawn does not impose or extend
any actual or contingent liability on a Rating Agency to the Issuer, the
Covered Bond Guarantor, the Bond Trustee, the Security Trustee, the Secured
Creditors (including the Covered Bondholders) or any other person or create
any legal relations between the Rating Agencies and the Issuer, the Covered
Bond Guarantor, the Bond Trustee, the Security Trustee, the Secured Creditors
(including the Covered Bondholders) or any other person whether by way of
contract or otherwise.
Covered Bonds that are not in physical form are subject to certain risks.
Unless the Bearer Global Covered Bonds or the Registered Global Covered Bonds
are exchanged for Bearer Definitive Covered Bonds or Registered Definitive
Covered Bonds, respectively, which exchange will only occur in the limited
circumstances set out under "Form of the Covered Bonds - Bearer Covered Bonds"
and "Form of the Covered Bonds - Registered Covered Bonds" below, the
beneficial ownership of the Covered Bonds will be recorded in book-entry form
only with Euroclear and Clearstream, Luxembourg or, in the case of A$
Registered Covered Bonds, the Austraclear System. The fact that the Covered
Bonds are not represented in physical form could, among other things:
· result in payment delays on the Covered Bonds because
distributions on the Covered Bonds will be sent by or on behalf of the Issuer
to Euroclear, Clearstream, Luxembourg or the Austraclear System instead of
directly to Covered Bondholders;
· make it difficult for Covered Bondholders to pledge the
Covered Bonds as security if Covered Bonds in physical form are required or
necessary for such purposes; and
· hinder the ability of Covered Bondholders to resell the
Covered Bonds because some investors may be unwilling to buy Covered Bonds
that are not in physical form.
Holders of Covered Bonds issued in the form of Global Covered Bonds and
deposited with a common depositary for Euroclear and Clearstream, Luxembourg
and/or an alternative clearing system will have to rely on their procedures,
including for transfer, payment and communications.
Covered Bonds (other than A$ Registered Covered Bonds) issued under the
Programme will be represented on issue by one or more global Covered Bonds
that may be deposited with a common depositary for Euroclear and Clearstream,
Luxembourg (each as defined under "Terms and Conditions of the Covered
Bonds"). Except in the circumstances described in each global Covered Bond,
investors will not be entitled to receive Covered Bonds in definitive form.
Each of Euroclear and Clearstream, Luxembourg and their respective direct and
indirect participants will maintain records of the beneficial interests in
each global Covered Bond held through it. While the Covered Bonds are
represented by a global Covered Bond, investors will be able to trade their
beneficial interests only through the relevant clearing systems and their
respective participants, and investors will have to rely on the procedures of
the relevant clearing system and of their respective participants, including
for transfer, payment and communications.
While the Covered Bonds are represented by global Covered Bonds, the Issuer
will discharge its payment obligations under the Covered Bonds by making
payments through the relevant clearing systems. A holder of a beneficial
interest in a global Covered Bond must rely on the procedures of the relevant
clearing system and its participants to receive payments under the Covered
Bonds. The Issuer has no responsibility or liability for the records relating
to, or payments made in respect of, beneficial interests in any global Covered
Bond.
A Covered Bondholder who holds less than the minimum Specified Denomination
may not receive a definitive Covered Bond in respect of such holding, making
such denomination illiquid and difficult to trade.
In relation to any issue of Covered Bonds that have denominations consisting
of a minimum Specified Denomination plus one or more higher integral multiples
of another smaller amount, it is possible that such Covered Bonds may be
traded in amounts in excess of the minimum Specified Denomination that are not
integral multiples of such minimum Specified Denomination. In such a case, a
Covered Bondholder who, as a result of trading such amounts, holds an amount
which (after deducting integral multiples of such minimum Specified
Denomination) is less than the minimum Specified Denomination in his account
with the relevant clearing system at the relevant time may not receive a
definitive Covered Bond in respect of such holding (should definitive Covered
Bonds be printed) and would need to purchase a principal amount of Covered
Bonds such that its holding amounts to a Specified Denomination. If
definitive Covered Bonds are issued, Covered Bondholders should be aware that
definitive Covered Bonds that have a denomination that is not an integral
multiple of the minimum Specified Denomination may be illiquid and difficult
to trade.
There are restrictions on the transfer of the Covered Bonds.
The Covered Bonds and the Covered Bond Guarantee have not been and will not be
registered under the Securities Act or under any securities laws of any state
or other jurisdiction of the United States and may not be offered or sold in
the United States or to, or for the account or the benefit of, U.S. persons as
defined in Regulation S unless an exemption from the registration requirements
of the Securities Act is available and in accordance with all applicable
securities laws of any state of the United States and any other jurisdiction.
No sale, assignment, participation, pledge or transfer of a Covered Bond or
any interest therein may be made unless made in compliance with the transfer
and selling restrictions set forth under "Subscription and Sale and Transfer
and Selling Restrictions" below.
The regulation and reform of benchmarks may adversely affect the value of
Covered Bonds linked to or referencing such "benchmarks".
Interest rates and indices which are deemed to be benchmarks (including,
amongst others, SONIA, EURIBOR, BBSW Rate and BKBM, each as defined below) are
the subject of recent national and international regulatory guidance and
proposals for reform. Some of these reforms are already effective whilst
others are still to be implemented. These reforms may cause such benchmarks to
perform differently than in the past, to disappear entirely, or have other
consequences which cannot be predicted. Any such consequence could have a
material adverse effect on any Covered Bonds linked to or referencing such a
"benchmark".
In Australia, examples of reforms that are already effective include changes
to the methodology for calculation of the BBSW Rate, and amendments to the
Corporations Act made by the Treasury Laws Amendment (2017 Measures No. 5) Act
2018 of Australia which, among other things, enable ASIC to make rules
relating to the generation and administration of financial benchmarks. On 6
June 2018, ASIC designated the BBSW Rate as a "significant financial
benchmark" and made the ASIC Financial Benchmark (Administration) Rules 2018
and the ASIC Financial Benchmarks (Compelled) Rules 2018. On 27 June 2019,
ASIC granted ASX Benchmarks Pty Limited a licence to administer the BBSW Rate
from 1 July 2019.
Further, the RBA has amended its criteria for repo eligibility to include a
requirement that floating rate bonds and marketed asset-backed securities
issued on or after 1 December 2022 that reference the BBSW Rate must contain
at least one "robust" and "reasonable and fair" fallback rate for the BBSW
Rate in the event that it permanently ceases to exist, if such securities are
to be accepted by the RBA as being eligible collateral for the purposes of any
repurchase agreements to be entered into with the RBA. In November 2022, the
Australian Financial Markets Association published proposed drafting for the
BBSW Rate fallback provisions (the AFMA Proposal). The fallback provisions
relating to the BBSW Rate included in Condition 4(b)(ii)(A)(II) for the
Covered Bonds are based on the AFMA Proposal (the BBSW Rate Fallback
Provisions).
The BBSW Rate Fallback Provisions for the Covered Bonds distinguish between
temporary and permanent triggers affecting the BBSW Rate.
If a Temporary Disruption Trigger occurs in respect of the BBSW Rate, the
interest rate for any day on which that Temporary Disruption Trigger is
continuing will be the interest rate determined in accordance with the
Temporary Disruption Fallback which provides that, in the first instance,
preference will be given to the Administrator Recommended Rate (which is a
rate formally recommended for use as the replacement for the BBSW Rate by the
Administrator). The second preference will be given to the Supervisor
Recommended Rate (which is a rate formally recommended for use as the
replacement for the BBSW Rate by the Supervisor). Finally, preference will be
given to the Final Fallback Rate.
In the event that a Permanent Discontinuation Trigger occurs in respect of the
BBSW Rate, the rate for any Interest Determination Date which occurs on or
following the applicable Permanent Fallback Effective Date will be the
Fallback Rate which is determined in accordance with the Permanent
Discontinuation Fallback and which may be AONIA.
Investors should be aware that whilst the BBSW Rate is based on a
forward-looking basis and on observed bid and offer rates for Australian prime
bank eligible securities (which rates may incorporate a premium for credit
risk), AONIA is an overnight, risk free cash rate and will be applied to
calculate interest by compounding observed rates in arrears and the
application of a spread adjustment. There can be no assurance that AONIA as
described above will produce the economic equivalent of the BBSW Rate.
In New Zealand, the current regulatory regime for the New Zealand Bank Bill
Benchmark Rate (BKBM) has been judged as not sufficient to meet the EU
equivalence standard under the Benchmarks Regulation. Without regulatory
reform, the use of BKBM will be restricted in the EU from 1 January 2020. To
address this, the Financial Markets (Derivatives Margin and Benchmarking)
Reform Amendment Act 2019 was enacted on 30 August 2019 which introduced a
licensing regime for administrators of financial benchmarks. Regulations
setting out further detail of licence obligations came into force on 15 March
2021.
The EU Benchmarks Regulation applies, subject to certain transitional
provisions, to the provision of benchmarks, the contribution of input data to
a benchmark and the use of a benchmark within the EU. Among other things, it
(i) requires benchmark administrators to be authorised or registered (or, if
non-EU-based, to be subject to an equivalent regime or otherwise recognised or
endorsed) and (ii) prevents certain uses by EU supervised entities of
benchmarks of administrators that are not authorised or registered (or, if
non-EU based, not deemed equivalent or recognised or endorsed). Regulation
(EU) 2016/1011 as it forms part of domestic law by virtue of the EUWA) among
other things, applies to the provision of benchmarks and the use of a
benchmark in the UK. Similarly, it prohibits the use in the UK by UK
supervised entities of benchmarks of administrators that are not authorised by
the FCA or registered on the FCA register (or, if non-UK based, not deemed
equivalent or recognised or endorsed).
The EU Benchmarks Regulation and/or the UK Benchmarks Regulation, as
applicable, could have a material impact on any Covered Bonds linked to or
referencing a benchmark in particular, if the methodology or other terms of
the benchmark are changed in order to comply with the requirements of the EU
Benchmarks Regulation and/or the UK Benchmarks Regulation, as applicable. It
is also not possible to predict whether such reforms will lead to any such
benchmarks (including the BBSW Rate) not being supported going forward. Such
changes could, among other things, have the effect of reducing, increasing or
otherwise affecting the volatility of the published rate or level of the
relevant benchmark.
More broadly, any of the international or national reforms, or the general
increased regulatory scrutiny of "benchmarks", could increase the costs and
risks of administering or otherwise participating in the setting of a
"benchmark" and complying with any such regulations or requirements.
Separately, the euro risk free-rate working group for the euro area has
published a set of guiding principles and high level recommendations for
fallback provisions in, amongst other things, new euro denominated cash
products (including bonds) referencing EURIBOR. The guiding principles
indicate, amongst other things, that continuing to reference EURIBOR in
relevant contracts (without robust fallback provisions) may increase the risk
to the euro area financial system. On 11 May 2021, the euro risk-free rate
working group published its recommendations on EURIBOR fallback trigger events
and fallback rates.
Such factors may have (without limitation) the following effects on certain
benchmarks: (i) discouraging market participants from continuing to administer
or contribute to a benchmark; (ii) triggering changes in the rules or
methodologies used in the benchmark and/or (iii) leading to the disappearance
of the benchmark. Any of the above changes or any other consequential
changes as a result of international or national reforms or other initiatives
or investigations, could have a material adverse effect on the value of and
return on any Covered Bonds linked to, referencing, or otherwise dependent (in
whole or in part) upon, a benchmark. In addition, if the benchmarks are
discontinued there can be no assurance that the applicable fall-back
provisions under the Swap Agreements would operate to allow the transactions
under the Swap Agreements to effectively mitigate interest rate risk in
respect of the Covered Bonds. It should also be noted that broadly divergent
interest rate calculation methodologies may develop and apply as between the
Covered Bonds and/or the Swap Agreements due to applicable fall-back
provisions or other matters. The consequences of this are uncertain but could
include a reduction in the amounts available to the Issuer to meet its payment
obligations in respect of the Covered Bonds.
Investors should be aware that in the case of certain Floating Rate Covered
Bonds, the Conditions of the Covered Bonds provide for certain fallback
arrangements in the event that a published benchmark, including an inter-bank
offered rate (such as EURIBOR) or another relevant reference rate (such as the
BBSW Rate) ceases to exist or be published. In certain circumstances the
ultimate fallback for the purposes of calculation of interest for a particular
Interest Period may result in the Rate of Interest for the last preceding
Interest Period being used. This may result in the effective application of a
fixed rate for Floating Rate Covered Bonds based on the rate which was last
observed on the Relevant Screen Page or the initial Rate of Interest
applicable to such Covered Bonds on the Interest Commencement Date.
Any such consequences could have a material adverse effect on the value or
liquidity of and return on any such Covered Bonds. Moreover, any of the above
matters or any other significant change to the setting or existence of any
relevant rate could affect the ability of the Issuer to meet its obligations
under the Floating Rate Covered Bonds or could have a material adverse effect
on the value or liquidity of, and the amount payable under, such Floating Rate
Covered Bonds.
Investors should consult their own independent advisers and make their own
assessment about the potential risks imposed by the EU Benchmarks Regulation
and/or the UK Benchmarks Regulation, as applicable, or any of the
international or national reforms, including in relation to the risks
associated with the potential discontinuation of the BBSW Rate and the
application of the BBSW Rate Fallback Provisions, in making any investment
decision with respect to any Covered Bonds linked to or referencing a
benchmark.
The market continues to develop in relation to SONIA as a reference rate.
Where the Applicable Final Terms (or, in the case of Exempt Covered Bonds, the
Applicable Pricing Supplement) for a Series of Floating Rate Covered Bonds
identifies that the Rate of Interest for such Covered Bonds will be determined
by reference to SONIA, the Rate of Interest will be determined on the basis of
Compounded Daily SONIA (as defined in the Conditions of the Covered Bonds).
Compounded Daily SONIA differs from LIBOR in a number of material respects,
including (without limitation) that Compounded Daily SONIA is a
backwards-looking, compounded, risk-free overnight rate, whereas LIBOR is
expressed on the basis of a forward-looking term and includes a risk-element
based on inter-bank lending. As such, investors should be aware that LIBOR and
SONIA may behave materially differently as interest reference rates for
Covered Bonds issued under the Programme. The use of Compounded Daily SONIA as
a reference rate for bonds is nascent, and is subject to change and
development, both in terms of the substance of the calculation and in the
development and adoption of market infrastructure for the issuance and trading
of debt securities referencing Compounded Daily SONIA.
Accordingly, prospective investors in any Covered Bonds referencing Compounded
Daily SONIA should be aware that the market continues to develop in relation
to SONIA as a reference rate in the capital markets and its adoption as an
alternative to Sterling LIBOR. For example, in the context of
backwards-looking SONIA rates, market participants and relevant working groups
have, as at the date of this Prospectus, explored different methodologies,
such as daily compounding rates and weighted average rates, and
forward-looking 'term' SONIA reference rates (which seek to measure the
market's forward expectation of an average SONIA rate over a designated term)
have also been or are being, developed. The adoption of SONIA may also see
component inputs into swap rates or other composite rates transferring from
LIBOR or another reference rate to SONIA.
The market or a significant part thereof may adopt an application of SONIA
that differs significantly from that set out in the Conditions as applicable
to Covered Bonds referencing Compounded Daily SONIA that are issued under this
Prospectus. In addition, the methodology for determining any overnight rate
index by reference to which the Rate of Interest in respect of certain Covered
Bonds may be calculated could change during the life of any Covered Bonds.
Furthermore, the Issuer may in future issue Covered Bonds referencing SONIA
that differ materially in terms of interest determination when compared with
any previous SONIA-referenced Covered Bonds issued by it under the Programme.
The nascent development of Compounded Daily SONIA as an interest reference
rate for the Eurobond markets, as well as continued development of SONIA-based
rates for such market and the market infrastructure for adopting such rates,
could result in reduced liquidity or increased volatility or could otherwise
affect the market price of any SONIA-referenced Covered Bonds issued under the
Programme from time to time.
Furthermore, the Rate of Interest on Covered Bonds which reference Compounded
Daily SONIA is only capable of being determined at the end of the relevant
Observation Period and immediately prior to the relevant Interest Payment
Date. It may be difficult for investors in Covered Bonds which reference
Compounded Daily SONIA to estimate reliably the amount of interest which will
be payable on such Covered Bonds, and some investors may be unable or
unwilling to trade such Covered Bonds without changes to their IT systems,
both of which factors could adversely impact the liquidity of such Covered
Bonds. Further, in contrast to LIBOR-based Covered Bonds, if Covered Bonds
referencing Compounded Daily SONIA become due and payable as a result of an
Event of Default under Condition 9, or are otherwise redeemed early on a date
which is not an Interest Payment Date, the final Rate of Interest payable in
respect of such Covered Bonds shall only be determined immediately prior to
the date on which the Covered Bonds become due and payable.
In addition, the manner of adoption or application of SONIA reference rates in
one market may differ materially compared with the application and adoption of
SONIA in other markets, such as the derivatives and loan markets. Investors
should carefully consider how any mismatch between the adoption of SONIA
reference rates across these markets may impact any hedging or other financial
arrangements which they may put in place in connection with any acquisition,
holding or disposal of Covered Bonds referencing Compounded Daily SONIA. If
the market adopts a different calculation method, that would likely adversely
affect the market value of such SONIA- referenced Covered Bonds.
Investors should carefully consider these matters when making their investment
decision with respect to any such Covered Bonds.
Covered Bondholders' ability to enforce certain rights in connection with the
Covered Bonds may be limited or affected by reforms to Australian insolvency
legislation relating to "ipso facto" rights.
On 18 September 2017, the Treasury Laws Amendment (2017 Enterprise Incentives
No.2) Act 2017 (the Treasury Act) received Royal Assent and was enacted. The
Treasury Act contains reforms to Australian insolvency laws. Under the
Treasury Act, any right under a contract, agreement or arrangement (such as a
right entitling a creditor to terminate a contract or to accelerate a payment
under a contract) arising merely because a company, among other circumstances,
is under administration, has appointed a managing controller or is the subject
of an application under section 411 of the Corporations Act (i.e. ipso facto
rights), will not be enforceable during a prescribed moratorium period.
The Treasury Act took effect on 1 July 2018 and applies to ipso facto rights
arising under contracts, agreements or arrangements entered into at or after
that date, subject to certain exclusions. On 21 June 2018, the Australian
Government introduced the Corporations Amendment (Stay on Enforcing Certain
Rights) Regulations 2018 (the Regulations) which sets out the types of
contracts that will be excluded from the operation of the stay on the
enforcement of ipso facto rights.
The Regulations provide that a contract, agreement or arrangement that is, or
governs securities, financial products, bonds or promissory notes will be
exempt from the moratorium. Furthermore, a contract, agreement or arrangement
under which a party is or may be liable to subscribe for, or to procure
subscribers for, securities, financial products, bonds or promissory notes is
also excluded from the stay. However, since their commencement, the Treasury
Act and the Regulations have not been the subject of judicial interpretation.
If the Regulations are determined not to exclude the Covered Bonds from their
operation under the exclusions mentioned above or any other exclusion under
the Regulations, this may render unenforceable in Australia provisions of the
Covered Bonds conditioned solely on the occurrence of events giving rise to
ipso facto rights.
GENERAL RISK FACTORS
Risks related to the Covered Bonds generally
Set out below is a brief description of certain risks relating to the Covered
Bonds generally:
It may be necessary for a Covered Bondholder to bring a suit in the courts of
England or New South Wales, Australia (as applicable) to enforce its rights
against the Issuer or the Covered Bond Guarantor.
The Issuer and the Covered Bond Guarantor have agreed to submit to the
exclusive jurisdiction of the courts of England in any action arising out of
the Bond Trust Deed, the Principal Agency Agreement, the Programme Agreement,
and the Covered Bonds (but, in each case, excluding the A$ Registered Covered
Bonds) and the non-exclusive jurisdiction of the courts of New South Wales,
Australia in any action arising out of the documents governed by Australian
law. In the limited instances where a Covered Bondholder or Couponholder may
proceed directly against the Issuer or Covered Bond Guarantor due to a failure
to act by the Bond Trustee or the Security Trustee, as the case may be, as
described herein, it may be necessary for such Covered Bondholder or
Couponholder to bring a suit in the courts of England or New South Wales,
Australia (as applicable) to enforce its rights against the Issuer or the
Covered Bond Guarantor, as the case may be, with respect to the Bond Trust
Deed or any other Programme Document (excluding the Programme Documents to the
extent that they refer only to the A$ Registered Covered Bonds), the Covered
Bonds (but excluding the A$ Registered Covered Bonds), the Coupons or the
Security.
There is currently no active and liquid secondary market for the Covered
Bonds, which may adversely impact their liquidity.
There is not, at present, an active and liquid secondary market for the
Covered Bonds, and there can be no assurance that a secondary market for the
Covered Bonds will develop. The Covered Bonds are subject to certain
restrictions on the resale and other transfer thereof as set forth under
"Subscription and Sale and Transfer and Selling Restrictions". If a secondary
market does develop, it may not continue for the life of the Covered Bonds or
it may not provide Covered Bondholders with liquidity of investment with the
result that a Covered Bondholder may not be able to find a buyer to buy its
Covered Bonds readily or at prices that will enable the Covered Bondholder to
realise a desired yield. Consequently, a Covered Bondholder must be able to
bear the economic risk of an investment in a Covered Bond for an indefinite
period of time.
The Security Trustee's powers may affect the interests of the Covered
Bondholders.
Except where expressly provided otherwise in the Security Deed, the Security
Trustee may exercise, or refrain from exercising, all of its rights, powers,
authorities, discretions and remedies under the Security Deed and the other
Programme Documents, and may form opinions, and give consents, approvals and
waivers under the Security Deed and the other Programme Documents, in
accordance with the direction or instructions of (for so long as there are any
Covered Bonds outstanding) the Bond Trustee (acting pursuant to and in
accordance with the terms of the Bond Trust Deed) or (where no Covered Bonds
are outstanding) the Majority Secured Creditors. If there is at any time a
conflict between a duty owed by the Security Trustee to the Covered
Bondholders and a duty owed by the Security Trustee to any other Secured
Creditor or class of Secured Creditor, then the Security Trustee must have
regard only to the interests of the Covered Bondholders while any of the
Covered Bonds remain outstanding and will not be required to have regard to
the interests of any other Secured Creditor or any other person, or to act
upon or comply with any direction or request of any other Secured Creditor or
any other person, while any amount remains owing to any Covered Bondholders.
Where the Security Trustee is required to have regard to the Covered
Bondholders (or any Series thereof), it must have regard to the general
interests of the Covered Bondholders (or any Series thereof) as a class and
will not have regard to any interests arising from circumstances particular to
individual Covered Bondholders or Couponholders (whatever their number)
resulting from their being for any purpose domiciled or resident in, or
otherwise connected with, or subject to the jurisdiction of, any particular
country, territory or any political subdivision thereof and the Security
Trustee will not be entitled to require, nor will any Covered Bondholder or
Couponholder be entitled to claim from, the Issuer, the Covered Bond
Guarantor, the Bond Trustee, the Security Trustee or any other person any
indemnification or payment in respect of any tax consequences of any such
exercise upon individual Covered Bondholders or Couponholders, except to the
extent already provided for in Condition 7.
If, in connection with the exercise of its powers, trusts, authorities or
discretions, the Security Trustee is of the opinion that the interests of the
holders of the Covered Bonds of any one or more Series could or would be
materially prejudiced thereby, the Security Trustee may determine that it will
not exercise such power, trust, authority or discretion without the approval
of such Covered Bondholders by Extraordinary Resolution or by a direction in
writing of such Covered Bondholders of not less than 25 per cent. of the
Australian Dollar Equivalent of the Principal Amount Outstanding of the
Covered Bonds of the relevant Series then outstanding, and which has not been
contradicted by a direction in writing of such Covered Bondholders of an equal
or greater Australian Dollar Equivalent received by the Security Trustee prior
to exercise thereof.
Provided that the Security Trustee acts in good faith, as described in the
foregoing, it will not incur any liability to any Secured Creditor or any
other person for so doing.
The Bond Trustee and the Security Trustee may agree to modifications to the
Programme Documents without, respectively, the Covered Bondholders' or other
Secured Creditors' prior consent.
Pursuant to and subject to the terms of the Security Deed, the Security
Trustee may, without the consent or sanction of any of the Covered Bondholders
of any Series, the related Couponholders and without the consent or sanction
of the other Secured Creditors (other than any Secured Creditor who is a party
to the relevant document) at any time and from time to time concur with the
Issuer and the Covered Bond Guarantor (acting at the direction of the Trust
Manager) and any other party in making any modification to the Covered Bonds
of one or more Series, the related Coupons or to the Security Deed or the
other Programme Documents if: (a) so directed by the Bond Trustee (if there
are Covered Bonds outstanding) or the Majority Secured Creditors (if there are
no Covered Bonds outstanding); or (b) the modification is: (1) of a formal,
minor or technical nature; (2) made to correct a manifest or proven error or
an error established as such to the satisfaction of the Security Trustee; or
(3) made to ensure compliance with mandatory provisions of law; and, in each
case, the Bond Trustee (if any Covered Bonds are outstanding) has approved of
the modification.
The Bond Trustee may, without the consent or sanction of any of the Covered
Bondholders of any Series, the related Couponholders and without the consent
or sanction of any other Secured Creditors (other than any Secured Creditor
who is a party to the relevant document) at any time and from time to time
concur with, and/or direct the Security Trustee to concur with the Issuer, and
the Covered Bond Guarantor (acting at the direction of the Trust Manager) and
any other party in making: (a) any modification to the Covered Bonds of one or
more Series, the related Coupons or to any Programme Document which does not
relate to a Series Reserved Matter and which in the opinion of the Bond
Trustee is not materially prejudicial to the interests of the Covered
Bondholders of any Series; or (b) any modification to the Covered Bonds of one
or more Series, the related Coupons or any Programme Document which is, in the
opinion of the Bond Trustee, of a formal, minor or technical nature or is, in
the opinion of the Bond Trustee, made to correct a manifest error or comply
with mandatory provisions of law (and for these purposes the Bond Trustee may
disregard whether any such modification relates to a Series Reserved Matter);
or (c) any modification referred to in the following paragraph. In forming
its opinion as to whether the Covered Bonds or any one or more Series, the
related Coupons or any Programme Document is subject to a manifest error, the
Bond Trustee may have regard to any evidence which it considers reasonably to
rely on (including a certificate from the Issuer as to certain matters) and it
must have regard to a Rating Affirmation Notice issued by the Issuer.
The Security Trustee and the Bond Trustee will be obliged to concur in and to
effect modifications to the Programme Documents requested by the Trust Manager
to: (a) accommodate accession of a new Servicer, new Swap Provider, new Trust
Manager, new Account Bank, new Cover Pool Monitor or new Agent if certain
conditions are met; (b) accommodate the removal of any one of the Rating
Agencies from the Programme or the addition of any Rating Agency, provided
that at all times there are at least two rating agencies rating the Programme
and any Covered Bonds then outstanding and, in respect of the removal of any
one of the Rating Agencies from the Programme only, the proposed modification
effecting such removal is not an Objected Modification; (c) take into account
any new covered bonds ratings criteria of the Rating Agencies, or any changes
or updates to, or any replacement of, the covered bonds ratings criteria of
the Rating Agencies (including, without limitation, any manner in which a
Rating Agency applies or construes any then existing covered bonds ratings
criteria), subject to receipt by the Bond Trustee and the Security Trustee of
a Rating Affirmation Notice from the Issuer and receipt by the Bond Trustee
and the Security Trustee of a certificate signed by two Authorised Signatories
of the Trust Manager each certifying to the Bond Trustee and the Security
Trustee that such modifications are required in order to take into account any
such new covered bonds ratings criteria of the Rating Agencies, or any such
changes or updates to, or any replacement of, the covered bonds ratings
criteria of the Rating Agencies; (d) allow a Swap Provider to transfer
securities as Swap Collateral under a relevant Swap Agreement Credit Support
Document, including to appoint a custodian to hold such securities in a
custody agreement; (e) enable N Covered Bonds to be issued under the Programme
subject to receipt by the Bond Trustee and the Security Trustee of certain
certifications from the Issuer and the Trust Manager; (f) ensure compliance of
the Programme, the Issuer or a Swap Provider (as applicable) with, or ensure
that the Programme, the Issuer or a Swap Provider (as applicable) may benefit
from, any existing, new or amended legislation, regulation, directive,
prudential standard or prudential guidance note of any regulatory body
(including, without limitation, APRA) in relation to covered bonds (or a Swap)
provided that the Trust Manager has certified to the Security Trustee and the
Bond Trustee in writing that such modifications are required in order to
comply with or benefit from such legislation, regulation, directive,
prudential standard or prudential guidance note, as the case may be. For the
purposes of providing a certificate to the Bond Trustee and the Security
Trustee under this paragraph (f) relating to modifications in connection with
a Swap, the Trust Manager may rely on a certification by an Authorised
Signatory of the relevant Swap Provider; (g) permit the acquisition (which,
without limitation, may be initially in equity only) by the Covered Bond
Guarantor from the Seller of Mortgage Loan Rights originated by an entity
other than the Seller and to enable the Covered Bond Guarantor to protect or
perfect its title to such Mortgage Loan Rights, provided that such Mortgage
Loan Rights comply with the Eligibility Criteria at the time of their
acquisition by the Covered Bond Guarantor and the Issuer is reasonably
satisfied following discussions with the Rating Agencies that the ratings then
assigned by the Rating Agencies to any Covered Bonds or the Programme will not
be subject to a downgrade, withdrawal or qualification; or (h) accommodate the
accession of BOQ Specialist Bank Limited as a new Seller to the Programme
provided that (i) the Trust Manager has certified to the Security Trustee and
the Bond Trustee in writing that such modifications are required in order to
accommodate the addition of BOQ Specialist Bank Limited as a new Seller to the
Programme; and (ii) the Trust Manager has certified to the Security Trustee
and the Bond Trustee in writing that all other conditions precedent to the
accession of BOQ Specialist Bank Limited as a new Seller to the Programme set
out in the Programme Documents have been satisfied at the time of the
accession.
The Bond Trustee may, without any requirement for the consent of approval of
the Covered Bondholders and at the written request of the Issuer in accordance
with Condition 4(b)(ii)(A)(III), make the necessary modifications to the
Conditions and/or any other Programme Document, to give effect to the proper
operation and application of the applicable Fallback Rate as contemplated by
Condition 4(b)(ii)(A)(II) in respect of the BBSW Rate. If such modifications
are required and except as otherwise provided in Condition 4(b)(ii)(A)(III),
the Bond Trustee shall be obliged to concur, and shall be obliged to direct
the Security Trustee to concur, with the Issuer in effecting any such
amendments. See further Condition 4(b)(ii)(A)(III).
If the Bond Trustee is required to hold an Australian Financial Services
Licence and is unable to rely on an exemption or enter into some other
arrangement, it may not be able to perform certain obligations required to be
performed by it in accordance with the terms of the Bond Trust Deed.
The Bond Trustee does not hold an Australian Financial Services Licence
(AFSL). In the event that the Bond Trustee is required to hold an AFSL, and is
unable to rely on an exemption from the requirement to hold an AFSL or is
unable to enter into some other arrangement, the Bond Trustee may not be able
to perform actions otherwise required to be performed by it in accordance with
the terms of the Bond Trust Deed (but for the fact that it does not hold an
AFSL) in respect of the Australian Covered Bonds. This may affect dealings by
the Bond Trustee in respect of the Australian Covered Bonds or under the
Covered Bond Guarantee in relation to the Australian Covered Bonds.
Certain decisions of the Covered Bondholders must be taken at Programme level.
Any Extraordinary Resolution to direct the Bond Trustee to serve an Issuer
Acceleration Notice following an Issuer Event of Default, to direct the Bond
Trustee to serve a Covered Bond Guarantee Acceleration Notice following a
Covered Bond Guarantor Event of Default and any direction to the Bond Trustee
or Security Trustee to take any enforcement action must be passed at a single
meeting of the holders of all Covered Bonds of all Series then outstanding and
therefore the holders of a single Series of Covered Bonds may not be able to
give any directions to the Bond Trustee or the Security Trustee without the
agreement of the holders of other outstanding Series of Covered Bonds.
Neither the Bond Trustee nor the Security Trustee will be bound to take
enforcement proceedings in relation to the Bond Trust Deed, the Covered Bonds,
the Coupons, the Security or any other Programme Document unless the Bond
Trustee or Security Trustee, as applicable, have been indemnified and/or
prefunded and/or secured to its satisfaction and provided that in the case of
Security Trustee, it will not be bound to take any enforcement proceedings
which may, in its opinion, in its absolute discretion, result in it failing to
receive any payment to which it is or would be entitled.
There is uncertainty as to the validity and/or enforceability of priority of
Excluded Swap Termination Amounts.
There is uncertainty as to the validity and/or enforceability of a provision
which (based on contractual and/or trust principles) subordinates certain
payment rights of a creditor to the payment rights of other creditors of its
counterparty upon the occurrence of insolvency proceedings relating to that
creditor. In particular, recent cases have focused on provisions involving
the subordination of a hedging counterparty's payment rights in respect of
certain termination payments upon the occurrence of insolvency proceedings on
the part of such counterparty. Such provisions are similar in effect to the
terms which are included in the Programme Documents (in particular the
Establishment Deed and the Security Deed relating to the Covered Bond Trust)
relating to the subordination of Excluded Swap Termination Amounts.
The UK Supreme Court has held that such a subordination provision of the type
described above is valid under English law. However, contrary to the
determination of the English Supreme Court, however, the U.S. Bankruptcy Court
for the Southern District of New York has held that such a subordination
provision is unenforceable under U.S. bankruptcy law and that any action to
enforce such provision would violate the automatic stay which applies under
such law in the case of a U.S. bankruptcy of the counterparty. However, in a
subsequent decision in relation to a similar matter, the U.S. Bankruptcy Court
for the Southern District of New York held that such a subordination provision
can be enforceable in certain circumstances. The implications of the
conflict in the findings of the English courts and the U.S. Bankruptcy Court
remain unresolved at this time. Furthermore, Australia has recently introduced
legislation that makes ipso facto clauses unenforceable at this time - see
"Risk factors relating to the Covered Bonds - Covered Bondholders' ability to
enforce certain rights in connection with the Covered Bonds may be limited or
affected by reforms to Australian insolvency legislation relating to "ipso
facto" rights"
An appeal against the 2018 U.S. District Court decision has since been filed,
however that appeal has not yet been decided. In the interim, the 2018
decision provides comfort that flip clauses will be captured by the safe
harbour provisions protecting a swap participant's rights under a swap
transaction under the U.S. Bankruptcy Code. The implications of these
conflicting judgments of the UK Supreme Court and the U.S. Bankruptcy Court
may not be settled until any right of appeal against the 2018 U.S. District
Court decision has been exhausted and the position in the United States is
resolved.
In particular, based on the first decision of the U.S. Bankruptcy Court
referred to above, there is a risk that subordination provisions such as those
included in the Programme Documents relating to the subordination of the
Excluded Swap Termination Amounts would not be upheld under U.S. bankruptcy
laws. Such laws may be relevant in certain circumstances with respect to a
range of entities which may act as Swap Provider, including U.S. established
entities and certain non-US established entities with assets or operations in
the U.S. (although the scope of any such proceedings may be limited if the
relevant non-US entity is a bank with a licensed branch in a U.S. state). If
a subordination provision included in the Programme Documents was successfully
challenged under the insolvency laws of any relevant jurisdiction outside
Australia and any relevant foreign judgment or order was recognised by the
Australian courts, there can be no assurance that such actions would not
adversely affect the rights of the Covered Bondholders, the market value of
the Covered Bonds and/or the ability of the Issuer to satisfy its obligations
under the Covered Bonds.
Given the general relevance of the issues under discussion in the judgments
referred to above, the uncertainty regarding the proposed reforms to
Australian insolvency laws and that the Programme Documents include terms
providing for the subordination of Excluded Swap Termination Amounts, there is
a risk that the final outcome of the dispute in such judgments (including any
recognition action by the Australian courts) or of any proposed reform may
result in negative rating pressure in respect of the Covered Bonds. If any
rating assigned to the Covered Bonds is lowered, the market value of the
Covered Bonds may reduce.
APRA's powers under the Australian Banking Act
APRA has the power to direct the Covered Bond Guarantor to return certain
assets to the Issuer, which may affect the ability of the Covered Bond
Guarantor to meet its obligations under the Covered Bond Guarantee.
The Australian Banking Act provides that, in certain circumstances, APRA has
the power to direct the Covered Bond Guarantor to return certain assets to the
Issuer. The Covered Bond Guarantor will be required to comply with APRA's
direction despite anything in its constitution or any contract or arrangement
to which it is a party.
Specifically, APRA has the power to direct the Covered Bond Guarantor to
return to the Issuer an Asset of the Trust which is held by the Covered Bond
Guarantor to the extent that, at the time the direction is given, that Asset
of the Trust does not secure "covered bond liabilities". A "covered bond
liability" (as defined in the Australian Banking Act) is a liability of the
Issuer or the Covered Bond Guarantor to covered bondholders and any other
liability which is secured by assets beneficially owned by the Covered Bond
Guarantor. A liability of the Covered Bond Guarantor to the Issuer (other
than a liability relating to derivatives or the provision of services) which
is secured in priority to any liability to holders of Covered Bonds is not a
"covered bond liability". Accordingly, APRA may direct the Covered Bond
Guarantor to return Assets forming part of the Trust held by the Covered Bond
Guarantor from time to time which secure such senior-ranking liabilities of
the Covered Bond Guarantor to the Issuer. In the context of the Programme,
if a Regulatory Event has occurred or is likely to occur, this means that APRA
will have the power to direct the Covered Bond Guarantor to return to the
Issuer any Assets of the Trust which secure the repayment of the Demand Note
in respect of the Senior Demand Note Component as such amounts will at that
point in time rank senior to the amounts due and payable by the Covered Bond
Guarantor to the Covered Bondholders and Couponholders under the applicable
Priority of Payments.
Under the Australian Prudential Standard APS 121 (Covered Bonds), the Issuer
is required to maintain an accurate and up-to-date register of the Assets of
the Trust which secure "covered bond liabilities".
APRA's power to give a direction to the Covered Bond Guarantor as described in
this section is also subject to secrecy requirements, which means that
investors will not receive any notice or otherwise be aware that APRA has
given the Covered Bond Guarantor any such direction.
If APRA exercises its power to direct the return of assets to the Issuer, this
may adversely affect the ability of the Covered Bond Guarantor to meet its
obligations under the Covered Bond Guarantee.
APRA has the power to prevent additional sales to meet the Asset Coverage Test
on any day, which could affect the ability of the Covered Bond Guarantor to
meet its obligations under the Covered Bond Guarantee.
The Australian Banking Act permits APRA to direct the Issuer, in certain
circumstances, not to transfer any asset to the Covered Bond Guarantor (that
is, to prevent the Issuer "topping up" the Assets of the Trust). Those
circumstances include where APRA has reason to believe that the Issuer is
unable to meet its liabilities, there has been a material deterioration in the
Issuer's financial condition, the Issuer is conducting its affairs in an
improper or financially unsound way, the failure to issue a direction would
materially prejudice the interests of the Issuer's depositors or the Issuer is
conducting its affairs in a way that may cause or promote instability of the
Australian financial system. This exercise of this power could potentially
lead to the depletion of the Assets of the Trust which may adversely affect
the ability of the Covered Bond Guarantor to meet its obligations under the
Covered Bond Guarantee.
APRA has the power to prevent further issues of covered bonds by the Issuer.
Apart from and in addition to the Australian Banking Act restriction that the
Issuer is precluded from issuing covered bonds if, at the time of issuance,
the value of the assets in all cover pools maintained by the ADI exceeds eight
per cent. (or such other percentage prescribed by regulation for the purposes
of section 28 of the Australian Banking Act) of the ADI's assets in Australia
at that time, APRA has the power to direct the Issuer not to issue covered
bonds pursuant to section 11CA of the Australian Banking Act or in
circumstances where APRA has reason to believe that the ADI has contravened
the covered bond provisions of the Australian Banking Act, the Australian
Banking Act or any other prudential requirement regulation or a prudential
standard relating to covered bonds.
Mortgage Loans are regulated by the consumer credit legislation, which may
affect the timing or amount of principal repayments under the relevant
Mortgage Loans and which may in turn affect the timing or amount of payments
by the Covered Bond Guarantor under the Covered Bond Guarantee when due.
The National Consumer Credit Protection Act 2009 (NCCP Act), which includes
the National Credit Code (Credit Code), commenced on 1 July 2010.
The Credit Code applies (with some limited exceptions) to Mortgage Loans that
had previously been regulated under the Consumer Credit Code and also to all
new consumer Mortgage Loans made after 1 July 2010.
The NCCP Act incorporates a requirement for providers of credit related
services to hold an "Australian Credit Licence" and to comply with
"responsible lending" requirements, including a mandatory "unsuitability
assessment". A credit provider's responsible lending assessment must be made
before a loan is made or there is an agreed increase in the amount of credit
under a loan.
The responsible lending obligations under the NCCP Act are broadly expressed.
In recent years, there have been a number of Federal Court decisions,
regulatory guidance from ASIC and actions which ASIC has taken against
licensees, including issuing infringement notices. The practical effect of
these developments, among other things, is that the interpretation of, and
guidance in relation to, these obligations can change, particularly in respect
of whether a credit licensee has taken sufficient steps to comply with its
responsible lending obligations.Obligations of a credit provider under the
NCCP Act extend to the Seller and, following a perfection of title by the
Covered Bond Guarantor in respect of any Mortgage Loans, the Covered Bond
Guarantor and their respective service providers (including the Servicer) in
respect of the Mortgage Loans.
Under the terms of the Credit Code each of the Seller and, following a
perfection of title by the Covered Bond Guarantor in respect of any Mortgage
Loans, the Covered Bond Guarantor would be a "credit provider" with respect to
regulated loans, and as such is exposed to civil and criminal liability for
certain violations. These include violations caused in fact by the
Servicer. The Servicer has indemnified the Covered Bond Guarantor for any
civil or criminal penalties in respect of Credit Code violations caused by the
Servicer (except to the extent such penalties arise as a result of the fraud,
negligence or wilful default of the Covered Bond Guarantor). There is no
guarantee that the Covered Bond Guarantor will have the financial capability
to pay any civil or criminal penalties which arise from Credit Code
violations.
If for any reason the Servicer does not discharge its obligations to the
Covered Bond Guarantor, then the Covered Bond Guarantor will be entitled to
indemnification from the Assets of the Trust. Any such indemnification may
reduce the amounts available to the Covered Bond Guarantor to make payments
under the Covered Bond Guarantee when due.
Under the Credit Code, a Borrower in relation to a regulated Mortgage Loan may
have the right to apply to a court to:
(a) vary the Mortgage Conditions applicable to that Mortgage
Loan on the grounds of hardship or that it is an unjust contract;
(b) reduce or cancel any interest rate payable on the Mortgage
Loan which is unconscionable;
(c) have certain provisions of the Mortgage Loan or related
Mortgage which are in breach of the legislation declared unenforceable; or
(d) obtain restitution or compensation in relation to any breach
of the Credit Code.
Any order made under any of the above consumer credit laws may affect the
timing or amount of principal repayments under the relevant Mortgage Loans
which may in turn affect the timing or amount of payments by the Covered Bond
Guarantor under the Covered Bond Guarantee when due.
Changes of law and/or regulatory, accounting and/or administrative practices
could adversely affect the ability of the Issuer and the Covered Bond
Guarantor to satisfy their payment obligations when due.
The structure of the issue of the Covered Bonds and the credit ratings which
are to be assigned to them are based on Australian law, regulatory, accounting
and administrative practice in effect as at the date of this Prospectus and
having due regard to the expected tax treatment of all relevant entities under
Australian tax law and the published practice of the Australian Taxation
Office in force or applied in Australia as at the date of this Prospectus.
No assurance can be given as to the impact of any possible change to
Australian law, regulatory, accounting or administrative practice in Australia
or to Australian tax law, or the interpretation or administration thereof, or
to the published practice of the Australian Taxation Office as applied in
Australia after the date of this Prospectus, nor can any assurance be given as
to whether any such change would adversely affect the ability of the Issuer to
make payments under the Covered Bonds or the ability of the Covered Bond
Guarantor to make payments under the Covered Bond Guarantee when due.
In addition, no assurance can be given that additional regulations, laws or
guidance from regulatory authorities in Australia will not arise with regard
to the mortgage market in Australia generally, the Seller's particular sector
in that market, specifically in relation to the Seller or in relation to the
issuance of covered bonds by deposit-taking institutions regulated under the
Australian Banking Act. Any such action or developments or compliance costs
may have a material adverse effect on the Mortgage Loan Rights, the Seller,
the Covered Bond Guarantor, the Issuer and/or the Servicer and their
respective businesses and operations. This may adversely affect the ability
of the Covered Bond Guarantor to dispose of Mortgage Loan Rights forming part
of the Assets of the Trust in a timely manner and/or the realisable value of
the Mortgage Loan Rights forming part of the Assets of the Trust and
accordingly affect the ability of the Covered Bond Guarantor to meet its
obligations under the Covered Bond Guarantee when due.
The Anti-Money Laundering and Counter-Terrorism Financing Act may result in a
delay or decrease in the amounts received by a Covered Bondholder in respect
of the Covered Bonds.
The AML/CTF Act regulates reporting entities. Reporting entities are
identified by reference to a list of various designated services. These
include making a loan in the course of carrying on a loan business or the
issuing or selling of a security (e.g., a share or debenture) by a company
(other than a security in the company itself). The AML/CTF Act imposes the
following key obligations (among others) on reporting entities:
(a) registering with the regulator AUSTRAC and paying relevant
fees;
(b) adopting and complying with an AML/CTF programme in managing
compliance with their AML/CTF obligations and in verifying customer
identities;
(c) verifying customer identities and collecting customer
information;
(d) reporting suspicious transactions, significant cash
transactions (being transfers of A$10,000 or more) and international funds
transfer instructions;
(e) retaining records; and
(f) conducting ongoing due diligence of customers in relation to
money laundering and financing of terrorism risks.
The AML/CTF Act operates in conjunction with the Anti-Money Laundering and
Counter-Terrorism Financing Rules Instrument 2007 (No. 1) (the AML/CTF Rules)
and any other Anti-Money Laundering and Counter-Terrorism Financing rules
which may be made by the Chief Executive Officer of the AUSTRAC from time to
time. Among other things, the AML/CTF Rules outline more detailed risk-based
requirements for verifying customer identities and monitoring customer
transactions on an ongoing basis. Contravention of the AML/CTF Act attracts
certain civil and criminal penalties of fines up to A$22.2 million and
imprisonment for up to 10 years.
The obligations placed upon a reporting entity can affect the services of an
entity or the funds it provides and ultimately may result in a delay or
decrease in the amounts received by a Covered Bondholder in respect of the
Covered Bonds.
If the security interests arising under the Programme Documents are not
perfected, such security interests may not have priority over competing
interests.
A personal property securities regime commenced operation throughout Australia
on 30 January 2012 pursuant to the Personal Property Securities Act 2009 (Cth)
(PPSA). The PPSA adopts a "functional approach" to security interests.
This means that the PPSA regulates any interest in relation to personal
property that, in substance, secures payment or performance of an
obligation. In addition, the PPSA regulates security interests which are
deemed to arise upon the transfer of certain types of assets (including
loans); these are generally referred to as "deemed security interests". The
PPSA does not regulate the granting of security interests in land.
The PPSA applies not only to security interests which come into existence
after 30 January 2012, but also to security interests evidenced by agreements
that were already in existence as at 30 January 2012. This type of security
interest is referred to as a "transitional security interest". Generally, in
order to be perfected under the PPSA, a security interest, whether or not it
is a transitional security interest, should be registered on the register
maintained pursuant to the PPSA (the PPS Register). Where a transitional
security interest was already registered on an existing public register, such
as under the Corporations Act charges registration regime, as at 30 January
2012 that security interest should have been migrated by the Australian
federal government to the PPS Register and thereby perfected under the PPSA.
Transitional security interests which were not registered on any existing
public register as at 30 January 2012 (such as any deemed security interest
arising before 30 January 2012) were temporarily perfected under the PPSA for
a period of 2 years from 30 January 2012 and needed to have been registered
within that 2 year period in order to preserve priority rights.
If the details held by the relevant existing public register in relation to a
transitional security interest are incorrect or insufficient or if, as a
result of human or systemic error those details were not properly migrated to
the PPS Register, or there is not a separate registration within the two year
period, there is a risk that other persons with competing interests in the
personal property may take free of that security interest because it will not
have been perfected. In addition, if the security interest is unperfected, the
holder of the security interest or the owner of the personal property may not
be able to enforce that security interest or claim title to the personal
property (as the case may be) if the security provider becomes insolvent.
The Trust Manager has arranged for security interests arising under the
Programme Documents (or a transaction in connection with them other than the
Mortgage Loans or the Mortgages themselves) to be perfected under the PPSA.
There is uncertainty on aspects of the implementation of the PPSA regime
because the PPSA significantly altered the law relating to secured
transactions. There are issues and ambiguities in respect of which a market
view or practice will evolve over time.
Implementation of the PPSA may adversely affect the value of the Assets of the
Trust and, accordingly, the ability of the Covered Bond Guarantor to make
payments under the Covered Bond Guarantee when due.
The operation of the PPSA was recently the subject of statutory review.. The
terms of reference for that review were generally aimed at simplification and
clarification of certain aspects of the PPSA. The final report prepared
pursuant to this review was released publicly in March 2015. At this stage,
there is uncertainty as to whether any or all of the recommendations made by
the review will ultimately be adopted and result in changes to the PPSA and,
if ultimately adopted, the timing and impact of such changes.
A legal regime governing unfair terms applies to certain Mortgage Loans and
Mortgage Documents.
The terms of a Mortgage Loan or a related mortgage or guarantee may be subject
to review for being "unfair" under Part 2 of the Australian Competition and
Consumer Act 2010 (Cth) and the Australian Securities and Investments
Commission Act 2001 (Cth) (ASIC Act) and/or Part 2B of the Fair Trading Act
1999 (Vic) (the Fair Trading Act), depending on when the relevant credit
contract was entered into.
From 1 January 2011 the unfair contract terms provisions in the ASIC Act have
been aligned to the equivalent provisions in the Australian Consumer Law (the
ACL) contained at Schedule 2 of the Australian Competition and Consumer Act
2010 (Cth), a single, Australian national consumer law which replaces
provisions in 17 Australian national, State and Territory consumer laws. The
unfair contract terms regime under the ASIC Act commenced on 1 July 2010,
while the application of the unfair contract terms regime to credit contracts
under the Fair Trading Act commenced in June 2009.
The regime under the ASIC Act and/or the Fair Trading Act may apply to a
Mortgage Loan or a related mortgage or guarantee depending on when it was
entered into; however, given that the unfair contract terms provisions in the
Fair Trading Act have now been repealed in favour of the ACL, a Mortgage Loan
or a related mortgage or guarantee entered into after 1 January 2011 will only
be subject to the ASIC Act. Mortgage Loans or a related mortgage or
guarantee entered into become subject to the ASIC Act regime going forward if
those contracts are renewed or a term is varied (although where a term is
varied, the regime only applies to the varied term). The Treasury
Legislation Amendment (Small Business and Unfair Contract Terms) Act 2015
(Cth) came into force on 12 November 2016 and has the effect of extending the
national regime to small business contracts. The Mortgage Loans that will be
affected are those where: at least one party is a business that employs less
than 20 people and the upfront price payable under the contract is: A$300,000
or less; or A$1,000,000 or less, if the contract is for more than 12 months
Under the ASIC Act and/or the Fair Trading Act, as applicable, unfair terms in
standard form consumer contracts and small business contracts will be void.
However, a contract will continue to bind the parties to the contract to the
extent that the contract is capable of operating without the unfair term.
Relevantly, the contracts documenting Mortgage Loans or a related mortgage or
guarantee will be considered standard form contracts.
Under the ASIC Act and/or the Fair Trading Act, as applicable, a term of a
standard-form consumer contract or a standard form small business contract
will be unfair, and therefore void, if it is a proscribed unfair term (in the
case of a consumer contract subject to the Fair Trading Act only) or it causes
a significant imbalance in the parties' rights and obligations under the
contract, is not reasonably necessary to protect the supplier's legitimate
interests (in the case of consumer contracts entered into, renewed or varied
on or after 1 June 2010 and in the case of small business contracts entered
into, renewed or varied on or after 12 November 2016) and would cause
detriment to the consumer or small business (as applicable) if it were relied
on. Therefore the effect of this provision will depend on the actual term of
the agreement or contract that was declared unfair.
Although the relevant legislation outlines examples of what is considered to
be unfair terms in contracts, to date there is limited case law as to how the
courts will interpret these provisions.
Any determination by a court or tribunal that a term of a Mortgage Loan or a
related mortgage or guarantee is void under the ASIC Act and/or the Fair
Trading Act due to it being unfair may adversely affect the timing or amount
of any payments thereunder (which might in turn affect the timing or amount of
interest or principal payments under the Covered Bonds).
On 6 November 2020, the Commonwealth, State and Territory consumer affairs
ministers announced that they would strengthen unfair contract terms laws
including by creating civil penalties for breaches of those laws. Exposure
draft legislation was released on 23 August 2021 and the consultation process
was completed on 20 September 2021.
Principal Characteristics of the Programme
The following synopsis does not purport to be complete and is taken from, and is qualified in its entirety by the information contained in the remainder of this Prospectus. For further information, namely regarding the Asset Coverage Test and the Amortisation Test, please see "Overview of the Principal Documents".
Issuer: Bank of Queensland Limited ABN 32 009 656 740, is a public limited company
incorporated in the Commonwealth of Australia and its registered office is
Level 6, 100 Skyring Terrace, Newstead Queensland 4006, Australia (BOQ).
Covered Bond Guarantor: Perpetual Corporate Trust Limited ABN 99 000 341 533, incorporated with
limited liability in the Commonwealth of Australia and having its registered
office at Level 18, 123 Pitt Street, Sydney, NSW 2000, as trustee of the BOQ
Covered Bond Trust (the Trustee).
Nature of eligible property: Mortgage Loan Rights, Substitution Assets (not exceeding the prescribed limit)
and Authorised Investments.
Location of eligible residential property securing Mortgage Loans: Australia.
Programme Asset Percentage (Maximum Asset Percentage): 90.9%.
Asset Coverage Test: Yes, see "Credit Structure" and "Overview of the Principal Documents - the
Establishment Deed - Asset Coverage Test".
Amortisation Test: Yes, see "Credit Structure" and "Overview of the Principal Documents - the
Establishment Deed - Amortisation Test".
Legislated Collateralisation Test: Yes, see "Structure Overview - Structure Overview - Legislated
Collateralisation Test."
Reserve Fund: A Reserve Fund of an amount up to the Reserve Fund Required Amount will be
established to trap a specified amount of the Available Income Amount and/or
(after the service of a Notice to Pay on the Covered Bond Guarantor but prior
to the service of a Covered Bond Guarantee Acceleration Notice on the Covered
Bond Guarantor and the Issuer) the Available Principal Amount, the proceeds of
the issue of Intercompany Notes or the Demand Note (or the proceeds of any
Increase in the Demand Note) for so long as BOQ's credit ratings are below the
Moody's Specified Rating and/or the Fitch Specified Ratings.
Extendable Maturities: Yes. The obligations of the Covered Bond Guarantor to pay all or (as
applicable) part of the Final Redemption Amount payable on the Final Maturity
Date in respect of a Series of Covered Bonds may be deferred, in accordance
with Condition 6(a), if (a) the Issuer has failed to pay the Final Redemption
Amount on the Final Maturity Date in respect of that Series of Covered Bonds;
or (b) following an Issuer Event of Default (i) in accordance with Condition
9(a) (other than in accordance with Condition 9(a)(i) as a result of a failure
to pay the Final Redemption Amount in respect of a Series of Covered Bonds)
and service of a Notice to Pay on the Covered Bond Guarantor or (ii) in
accordance with Condition 9(a)(i) as a result of a failure to pay the Final
Redemption Amount in respect of a Series of Covered Bonds where such Series of
Covered Bonds has been redeemed in full, and such Covered Bonds are then the
Earliest Maturing Covered Bonds; or (c) at any time following the service of a
Notice to Pay on the Covered Bond Guarantor, the Amortisation Test has been
breached and the Bond Trustee serves an Amortisation Test Breach Notice on the
Issuer and the Covered Bond Guarantor. In the circumstances described in
paragraph (c), the deferral will extend to all Series of Covered Bonds.
Where a Series of Covered Bonds is extended in accordance with the above, such
Series of Covered Bonds will become Pass-Through Covered Bonds and the
obligations of the Covered Bond Guarantor will be deferred until the date
(being the Extended Due for Payment Date) which is the earlier of (a) the date
which falls 31.5 years after the Final Maturity Date in relation to that
Series of Covered Bonds; (b) the date which falls 31.5 years after the
Conversion of that Series of Covered Bonds; and (c) the date which falls 31.5
years after an Amortisation Test Breach Notice is served on the Covered Bond
Guarantor and the Issuer, following the service of a Notice to Pay on the
Covered Bond Guarantor (the Conversion Event Date).
Cover Pool Monitor: KPMG having its registered office at Riparian Plaza, 71 Eagle Street, Brisbane
QLD 4000, Australia.
Asset Segregation: Yes.
Terms: As set out in the Applicable Final Terms for the relevant Series or Tranche of
Covered Bonds (or, in the case of Exempt Covered Bonds, the Applicable Pricing
Supplement).
Clearing Systems: Covered Bonds (other than A$ Registered Covered Bonds) may be traded on the
settlement system operated by Euroclear, the settlement system operated by
Clearstream, Luxembourg and/or any other clearing system outside Australia
specified in the Applicable Final Terms (or, in the case of Exempt Covered
Bonds, the Applicable Pricing Supplement).
The Issuer announces that: (a) each Tranche of Bearer Covered Bonds will be
initially issued in the form of a temporary global covered bond without
interest coupons attached (a Temporary Bearer Global Covered Bond) which will
be issued to and lodged with on or prior to the issue date of the relevant
Tranche a common depositary for Euroclear and Clearstream, Luxembourg; (b) in
connection with the issue, Euroclear and Clearstream, Luxembourg will confer
rights in relation to such Tranche of Bearer Covered Bonds and will record the
existence of those rights and (c) as a result of the issue of such Tranche of
Bearer Covered Bonds in this manner, these rights will be able to be created.
The Issuer may apply to Austraclear Limited ABN 94 002 060 773 (Austraclear)
for approval for the A$ Registered Covered Bonds to be traded on the
settlement system operated by Austraclear (Austraclear System). Such approval
of the A$ Registered Covered Bonds by Austraclear is not a recommendation or
endorsement by Austraclear of the A$ Registered Covered Bonds.
Listing and admission to trading: Application has been made to admit the Covered Bonds issued under the
Programme and pursuant to this Prospectus to the Official List and to admit
the Covered Bonds to trading on the main market of the London Stock Exchange.
Neither Perpetual Corporate Trust Limited (in its personal capacity or as
Covered Bond Guarantor) nor P.T. Limited (in its personal capacity or as
Security Trustee) have made or authorised the application to admit Covered
Bonds issued under the Programme to the Official List or to admit the Covered
Bonds to trading on the main market of the London Stock Exchange.
Exempt Covered Bonds may be unlisted or may be listed or admitted to trading,
as the case may be, on such other or further stock exchanges or regulated or
unregulated markets, as may be agreed between the Issuer and the Relevant
Dealer(s) or Lead Manager in relation to each issue. The Applicable Pricing
Supplement, in the case of Exempt Covered Bonds, will state whether or not the
relevant Exempt Covered Bonds are to be listed and/or admitted to trading and,
if so, on which stock exchanges and/or markets. Any A$ Registered Covered
Bonds issued under the Programme may be unlisted.
Option to issue Namensschuldverschreibungen: Subject to the consent of the Bond Trustee (which must be given if certain
conditions are met), the Issuer may amend the Programme to allow for the issue
of registered bonds in the form of German law governed
Namensschuldverschreibungen (N Covered Bonds). N Covered Bonds will not be
listed on any stock exchange and the certificate evidencing the N Covered
Bonds will be kept in the custody of the custodian of the N Covered Bond. N
Covered Bonds will rank pari passu with all other Covered Bonds and, upon
entry of the N Covered Bondholder into an N Covered Bond agreement which will
be set out in a schedule to the Bond Trust Deed, all payments of principal and
interest payable under the N Covered Bonds will be guaranteed by the Covered
Bond Guarantor pursuant to the terms of the Covered Bond Guarantee.
Structure Overview
The information in this section is an overview of the structure relating to
the Programme and does not purport to be complete. This Structure Overview
must be read as an introduction to this Prospectus and any decision to invest
in any Covered Bonds should be based on a consideration of this Prospectus as
a whole, including the documents incorporated herein by reference.
Words and expressions defined elsewhere in this Prospectus will have the same
meanings in this Structure Overview.
Structure Diagram
Structure Overview
Programme
Pursuant to the terms of the Programme, the Issuer will issue Covered Bonds to
the Covered Bondholders on each Issue Date. The Covered Bonds will be
direct, unsecured, unsubordinated and unconditional obligations of the Issuer.
The Issuer's indebtedness under the Covered Bonds will not be a protected
account for the purposes of the Financial Claims Scheme in Division 2AA of
Part II of the Australian Banking Act, will not be a deposit liability of the
Issuer for the purposes of the Australian Banking Act and is not guaranteed or
insured by any government, government agency or compensation scheme of
Australia or any other jurisdiction. If the Issuer becomes unable to meet
its obligations or suspends payment, its assets in Australia are to be
available to meet its indebtedness evidenced by the Covered Bonds only after
the liabilities referred to in section 13A(3)(a) - (e) of the Australian
Banking Act have been met. The Australian Banking Act provides that the
Issuer's assets in Australia for these purposes do not include the assets in
the Cover Pool.
Covered Bond Guarantee
Pursuant to the terms of the Bond Trust Deed, the Covered Bond Guarantor has guaranteed payments of interest and principal under the Covered Bonds issued by the Issuer. The Covered Bond Guarantor has agreed to pay an amount equal to the Guaranteed Amounts which would otherwise be unpaid by the Issuer. The obligations of the Covered Bond Guarantor under the Covered Bond Guarantee constitute direct,
absolute and (following service of an Issuer Acceleration Notice and Notice to Pay or a Covered Bond Guarantee Acceleration Notice) unconditional obligations of the Covered Bond Guarantor, secured as provided in the Security Deed and limited in recourse against the Covered Bond Guarantor. The Bond Trustee will be required to serve a Notice to Pay on the Covered Bond Guarantor following the occurrence of an Issuer Event of Default and service by the Bond Trustee of an Issuer Acceleration Notice on the Issuer (whereupon the Covered Bonds will become immediately due and payable as against the Issuer but not at such time as against the Covered Bond Guarantor).
A Covered Bond Guarantee Acceleration Notice may be served by the Bond Trustee
on the Issuer and the Covered Bond Guarantor (copied to the Trust Manager and
the Security Trustee) following the occurrence of a Covered Bond Guarantor
Event of Default. If a Covered Bond Guarantee Acceleration Notice is served,
the Covered Bonds will become immediately due and payable as against the
Issuer (if they have not already become due and payable) and the obligations
of the Covered Bond Guarantor under the Covered Bond Guarantee to pay
Guaranteed Amounts will be accelerated and the Security Trustee will be
entitled to enforce the Security. Payments made by the Covered Bond
Guarantor under the Covered Bond Guarantee will be made subject to, and in
accordance with, the Guarantee Priority of Payments. Payments made by the
Security Trustee will be made subject to, and in accordance with, the
Post-Enforcement Priority of Payments, as applicable.
Payment of the unpaid amount in respect of a Series of Covered Bonds by the
Covered Bond Guarantor may be deferred until the Extended Due for Payment
Date, being, in respect of a Series of Covered Bonds, the earlier of (a) the
date which falls 31.5 years after the Final Maturity Date in relation to that
Series of Covered Bonds; (b) the date which falls 31.5 years after the
Conversion of that Series of Covered Bonds; and (c) the date which falls 31.5
years after the Conversion Event Date. For further details see the section
"General Description of the Programme - Extendable obligations under the
Covered Bond Guarantee and Conditional Pass-Through Covered Bonds".
Intercompany Note Subscription Agreement
Pursuant to the terms of the Intercompany Note Subscription Agreement, BOQ as
Intercompany Note Subscriber has agreed to subscribe for Intercompany Notes
issued by the Covered Bond Guarantor in an amount equal to, the Principal
Amount Outstanding (or the Australian Dollar Equivalent thereof) on the Issue
Date of each Series or, as applicable, each Tranche of Covered Bonds, and for
a matching term. The Intercompany Notes will be denominated in the same
currency as the relevant Series or Tranche of Covered Bonds or in Australian
Dollars. Payments by the Issuer of amounts due under the Covered Bonds will
not be conditional upon receipt by BOQ of payments from the Covered Bond
Guarantor in respect of the Intercompany Notes. Payments by the Covered Bond
Guarantor in respect of the Intercompany Notes will be subordinated to amounts
owed by the Covered Bond Guarantor to the Covered Bondholders under the
Covered Bond Guarantee in accordance with the Guarantee Priority of Payments
and the Post‑Enforcement Priority of Payments.
The proceeds of issue of Intercompany Notes
The Covered Bond Guarantor will use the proceeds of issue of Intercompany
Notes to BOQ under the Intercompany Note Subscription Agreement from time to
time (if not denominated in Australian Dollars, upon exchange into Australian
Dollars under the applicable Covered Bond Swap): (i) to fund (in whole or
part) the Consideration for Mortgage Loan Rights to be purchased from the
Seller in accordance with the terms of the Mortgage Sale Agreement; (ii) if
Mortgage Loan Rights are purchased from the Seller in advance of a Series or
Tranche of Covered Bonds using the proceeds from the issue of, or Increase in,
the Demand Note, to make a repayment of the Demand Note in an amount equal to
the Series or Tranche of Covered Bonds issued which relate to those
Intercompany Notes and/or (iii) to invest in Substitution Assets in an amount
not exceeding the prescribed limits (as described in "Overview of the
Principal Documents - Establishment Deed - Limit on Investing in Substitution
Assets and Authorised Investments") to the extent required to meet the Asset
Coverage Test; and thereafter the Covered Bond Guarantor may use such proceeds
(subject to compliance with the Asset Coverage Test): (A) if an existing
Series or Tranche or part of an existing Series or Tranche of Covered Bonds is
being refinanced by the issue of a further Series or Tranche of Covered Bonds
to which the Intercompany Note being issued relates, to repay the Intercompany
Note(s) corresponding to the Covered Bonds being so refinanced (after exchange
into the currency of the Intercompany Note(s) being repaid, if necessary);
and/or (B) to make a repayment of the Demand Note; and/or (C) to make a
deposit of all or part of the proceeds into the GIC Account (including,
without limitation, to fund the Reserve Fund to an amount not exceeding the
Reserve Fund Required Amount).
Demand Note Subscription Agreement
Pursuant to the Demand Note Subscription Agreement, BOQ as Demand Note
Subscriber will subscribe for a Demand Note to be issued by the Covered Bond
Guarantor and will subscribe for further Increases in the Demand Note, as
requested by the Covered Bond Guarantor from time to time in accordance with
the Demand Note Subscription Agreement. The Demand Note will be denominated
in Australian Dollars. The proceeds of the issue of, and Increase in, the
Demand Note may only be used by, or on behalf of, the Covered Bond Guarantor:
(i) as Consideration (in whole or in part) for the acquisition of Mortgage
Loan Rights from the Seller on a Closing Date; (ii) to prevent or rectify a
failure to meet the Asset Coverage Test; (iii) to rectify an Interest Rate
Shortfall; (iv) to fund repayment by the Covered Bond Guarantor of any
outstanding Intercompany Note; (v) to make a deposit to the Reserve Fund or
(vi) for any purpose whatsoever (other than any purpose contemplated by any of
the preceding paragraphs (i) to (vi)) as may be agreed from time to time
between the Covered Bond Guarantor (acting at the direction of the Trust
Manager) and the Demand Note Subscriber.
Amounts due and payable by the Covered Bond Guarantor in respect of the Demand
Note will be repaid or otherwise satisfied as set out below:
· if a Regulatory Event has occurred or is likely to occur
(as determined by the Issuer and notified to the Covered Bond Guarantor and
the Trust Manager), in respect of the Senior Demand Note Component only by:
· way of set-off by application of the proceeds of the
issue of Intercompany Notes as described in "Intercompany Note Subscription
Agreement - The proceeds of issue of Intercompany Notes" above; or
· in specie distribution of Mortgage Loan Rights (the value
of which will be determined by reference to the Current Principal Balance plus
any accrued interest or arrears of interest in respect of the corresponding
Mortgage Loans calculated as at the date of the in specie distribution) to the
Demand Noteholder;
· in respect of the Junior Demand Note Component, be
subordinated to amounts due and payable by the Covered Bond Guarantor to the
Covered Bondholders and Couponholders under the Covered Bond Guarantee and to
the Intercompany Noteholder under the Intercompany Notes, as applicable, under
the applicable Priorities of Payments. Such amounts may be satisfied by in
specie distribution, at the discretion of the Trust Manager.
There will be no Senior Demand Note Component in relation to the Demand Note
unless a Regulatory Event has occurred or is likely to occur and the Issuer
has notified the Covered Bond Guarantor and the Trust Manager.
For further details see the section "Overview of the Principal Documents -
Demand Note Subscription Agreement".
Security
To secure its obligations under the Covered Bond Guarantee and the Programme
Documents to which it is a party, the Covered Bond Guarantor will grant
security over the Charged Property (which consists of the Assets of the Trust
held by the Covered Bond Guarantor from time to time, including the Covered
Bond Guarantor's interest in the Mortgage Loan Rights, the Substitution
Assets, the Authorised Investments, the Programme Documents to which it is a
party and the Trust Accounts) in favour of the Security Trustee (to be held by
the Security Trustee on trust for each Secured Creditor) pursuant to the
Security Deed.
Cashflows
Pre-Issuer Event of Default Income Priority of Payments and Pre-Issuer Event
of Default Principal Priority of Payments
Prior to service of a Notice to Pay on the Covered Bond Guarantor and/or
service of a Covered Bond Guarantee Acceleration Notice on the Covered Bond
Guarantor and the Issuer, the Trust Manager must direct the Covered Bond
Guarantor to and, upon receiving that direction, the Covered Bond Guarantor
will:
(a) apply the Available Income Amount (i) to pay interest due
and payable on the Intercompany Notes; and/or (ii) to pay interest due and
payable on the Demand Note. However, these payments will only be made after
payment of certain items ranking higher in the Pre-Issuer Event of Default
Income Priority of Payments; and
(b) apply the Available Principal Amount towards repayment of
the Demand Note and the Intercompany Notes but only after payment of certain
items ranking higher in the Pre-Issuer Event of Default Principal Priority of
Payments.
Application of moneys following service of an Asset Coverage Test Breach
Notice
At any time after service on the Covered Bond Guarantor of an Asset Coverage
Test Breach Notice (which has not been revoked), but prior to service of an
Issuer Acceleration Notice (or, if earlier, the occurrence of a Covered Bond
Guarantor Event of Default and service of a Covered Bond Guarantee
Acceleration Notice on the Covered Bond Guarantor and the Issuer), the
Available Income Amount and the Available Principal Amount will continue to be
applied in accordance with the Pre-Issuer Event of Default Income Priority of
Payments or Pre-Issuer Event of Default Principal Priority of Payments, as
applicable, save that, whilst any Covered Bonds remain outstanding, no moneys
will be applied to (i) acquire New Mortgage Loan Rights to ensure compliance
with the Asset Coverage Test, (ii) redeem or pay interest on the Intercompany
Notes or (except in limited circumstances) the Demand Note, (iii) pay the
purchase price for Mortgage Loan Rights sold to the Covered Bond Guarantor in
accordance with the Mortgage Sale Agreement (see further "Overview of the
Principal Documents - Mortgage Sale Agreement - Sale by the Seller of
Mortgage Loan Rights"), (iv) reimburse the Seller for funding Further
Advances, or (v) pay distributions to the Income Unitholder or the Capital
Unitholders, and the remainder (if any) will be retained in the GIC Account
(with a corresponding credit to the Income Ledger or Principal Ledger, as
applicable) and will form part of the Available Income Amount or Available
Principal Amount, as the case may be, on the next succeeding Distribution
Date.
Application of moneys following service of a Notice to Pay
Following service on the Covered Bond Guarantor of a Notice to Pay (but prior
to a Covered Bond Guarantor Event of Default and service of a Covered Bond
Guarantee Acceleration Notice on the Covered Bond Guarantor and the Issuer)
the Covered Bond Guarantor will use all moneys (other than certain amounts due
to third parties and Swap Collateral Excluded Amounts) to pay Guaranteed
Amounts in respect of the Covered Bonds when the same become Due for Payment,
subject to paying certain higher ranking obligations of the Covered Bond
Guarantor in the Guarantee Priority of Payments (including, if the Issuer has
determined and notified to the Trust Manager and the Covered Bond Guarantor
that a Regulatory Event has occurred or is likely to occur, in respect of the
Senior Demand Note Component). In such circumstances, the Intercompany
Noteholders, the Demand Noteholder (except as specified above) and BOQ as the
Income Unitholder and the Capital Unitholder will only be entitled to receive
any remaining income of the Trust after all amounts referred to above have
been paid or have otherwise been provided for in full.
Acceleration of the Covered Bonds
Following the occurrence of a Covered Bond Guarantor Event of Default and
service of a Covered Bond Guarantee Acceleration Notice on the Covered Bond
Guarantor and the Issuer, the Covered Bonds will become immediately due and
repayable (if not already due and payable as against the Issuer) and the Bond
Trustee will then have a claim against the Covered Bond Guarantor under the
Covered Bond Guarantee for an amount equal to the Early Redemption Amount in
respect of each Covered Bond together with accrued interest and any other
amounts due under the Covered Bonds (other than additional amounts payable by
the Issuer under Condition 7) and the Security created by the Covered Bond
Guarantor over the Charged Property will become enforceable. Any moneys
received or recovered by the Security Trustee following enforcement of the
Security granted by the Covered Bond Guarantor over the Charged Property will
be distributed according to the Post-Enforcement Priority of Payments (other
than any Swap Collateral Excluded Amounts).
Asset Coverage Test
To protect the value of the Mortgage Loan Rights forming part of the Assets of
the Trust, the Establishment Deed provides that, for so long as any Covered
Bonds remain outstanding, the Trust Manager must ensure that on each
Determination Date prior to the service of a Notice to Pay on the Covered Bond
Guarantor and/or a Covered Bond Guarantee Acceleration Notice on the Covered
Bond Guarantor and the Issuer, the Asset Coverage Test is satisfied.
Accordingly, for so long as Covered Bonds remain outstanding, the Trust
Manager must ensure that on each Determination Date prior to the service of a
Notice to Pay on the Covered Bond Guarantor and/or a Covered Bond Guarantee
Acceleration Notice on the Covered Bond Guarantor and the Issuer, the Adjusted
Aggregate Mortgage Loan Amount (as at the last day of the immediately
preceding Collection Period) will be at least equal to the Australian Dollar
Equivalent of the aggregate Principal Amount Outstanding (as at the last day
of the immediately preceding Collection Period) of the Covered Bonds as
calculated on the relevant Determination Date.
If the Adjusted Aggregate Mortgage Loan Amount (as at the last day of the
immediately preceding Collection Period) is less than the Australian Dollar
Equivalent of the aggregate Principal Amount Outstanding (as at the last day
of the immediately preceding Collection Period) of all Covered Bonds on two
consecutive Determination Dates, the Bond Trustee must serve an Asset Coverage
Test Breach Notice on the Covered Bond Guarantor (subject to the Bond Trustee
having actual knowledge or express notice of the non-satisfaction of the Asset
Coverage Test). The Bond Trustee will be deemed to revoke an Asset Coverage
Test Breach Notice if, on any Determination Date falling on or prior to the
third consecutive Determination Date, the Asset Coverage Test is subsequently
satisfied and neither a Notice to Pay nor a Covered Bond Guarantee
Acceleration Notice has been served. If the Asset Coverage Test Breach
Notice is not revoked, as described above, an Issuer Event of Default will
occur.
Amortisation Test
In addition, on each Determination Date following service of a Notice to Pay
on the Covered Bond Guarantor (but prior to service of a Covered Bond
Guarantee Acceleration Notice on the Covered Bond Guarantor and the Issuer)
and, for so long as any Covered Bonds remain outstanding, the Trust Manager
must ensure that the Amortisation Test Aggregate Mortgage Loan Amount, as
calculated on such Determination Date, will be at least equal to the
Australian Dollar Equivalent of the aggregate Principal Amount Outstanding (as
at the last day of the immediately preceding Collection Period) of the Covered
Bonds on such Determination Date. The Trust Manager must immediately notify
the Covered Bond Guarantor, the Security Trustee and (for so long as Covered
Bonds are outstanding) the Bond Trustee of any breach of the Amortisation Test
and the Bond Trustee must serve an Amortisation Test Breach Notice on the
Issuer and the Covered Bond Guarantor advising that the Amortisation Test has
been breached. Following the service of a Notice to Pay on the Covered Bond
Guarantor and an Amortisation Test Breach Notice on the Issuer and the Covered
Bond Guarantor (subject to no Covered Bond Guarantor Event of Default having
occurred), all Series of Covered Bonds will convert to Pass-Through Covered
Bonds, such that payment of the unpaid amount in respect of all Series of
Covered Bonds by the Covered Bond Guarantor under the Covered Bond Guarantee
will be deferred until the Extended Due for Payment Date.
Legislated Minimum Over-Collateralisation
In addition to the Asset Coverage Test and the Amortisation Test, the
Programme benefits from the Issuer's obligation to comply with the minimum
over-collateralisation requirements set out in the Australian Banking Act (the
Legislated Collateralisation Test), as described in section "Description of
the Covered Bond Provisions of the Australian Banking Act" of this Prospectus.
As the Legislative Collateralisation Test is a minimum requirement, the Issuer
expects that its obligation in respect of this legal requirement will be
satisfied in all circumstances in which the Asset Coverage Test or the
Amortisation Test, as applicable, is satisfied.
Reserve Fund
The Covered Bond Guarantor will be required on the first Issue Date or the
first Distribution Date to deposit into the GIC Account (with a corresponding
credit to the Reserve Ledger) any Available Income Amount or the proceeds of
the issue of Intercompany Notes or the Demand Note (or the proceeds of any
Increase in the Demand Note) up to an amount equal to the Reserve Fund
Required Amount. On each subsequent Issue Date or Distribution Date, the
Covered Bond Guarantor may be required to make further deposits into the GIC
Account (with a corresponding credit to the Reserve Ledger) of any Available
Income Amount and/or (after the service of a Notice to Pay on the Covered Bond
Guarantor but prior to the service of a Covered Bond Guarantee Acceleration
Notice on the Covered Bond Guarantor and the Issuer) the Available Principal
Amount, the proceeds of the issue of an Intercompany Note or Demand Note (or
the proceeds of any Increase in the Demand Note) up to an amount equal to the
Reserve Fund Required Amount. The Reserve Fund Required Amount on any day will
depend on the credit rating and deposit rating of the Issuer. For so long as
the Issuer's short-term unsecured, unsubordinated and unguaranteed debt
obligations are rated at least F1 by Fitch or its long term, unsecured,
unsubordinated and unguaranteed debt obligations are rated at least A by Fitch
(the Fitch Specified Ratings) and the Issuer has a short-term deposit rating
of at least P-1 by Moody's (the Moody's Specified Rating), the Reserve Fund
Required Amount is nil (or such other amount as the Issuer notifies the
Covered Bond Guarantor).
As at the date of this Prospectus, the Issuer does not have the Fitch
Specified Ratings or the Moody's Specified Rating. Accordingly, the Issuer
will be required to deposit and, for so long as the Issuer continues to not
have the Fitch Specified Ratings and/or the Moody's Specified Rating, maintain
the Reserve Fund Required Amount in the GIC Account.
Mortgage Sale Agreement
Under the terms of the Mortgage Sale Agreement, the Consideration payable to
the Seller for the sale of Mortgage Loan Rights originated by the Seller to
the Covered Bond Guarantor on any Closing Date will be a cash payment paid by
the Covered Bond Guarantor to the Seller on the applicable Closing Date. The
Seller will, subject to the satisfaction of certain conditions, be permitted
to sell Eligible Mortgage Loans and the Collateral Security to the Covered
Bond Guarantor from time to time.
Servicing Deed
In its capacity as Servicer, BOQ has entered into the Servicing Deed with the
Covered Bond Guarantor and the Security Trustee, pursuant to which the
Servicer has agreed to provide administrative services in respect of, amongst
others, the Mortgage Loan Rights sold by BOQ (in its capacity as Seller) to
the Covered Bond Guarantor.
Dual recourse; Excess Proceeds to be paid to Covered Bond Guarantor
Following the occurrence of an Issuer Event of Default that is continuing, the
Bond Trustee may serve an Issuer Acceleration Notice on the Issuer and a
Notice to Pay on the Covered Bond Guarantor.
Following service of an Issuer Acceleration Notice and a Notice to Pay, any
moneys received by the Bond Trustee from the Issuer (or any administrator,
receiver, receiver and manager, liquidator, statutory manager or other similar
official appointed in relation to the Issuer) will be paid by the Bond Trustee
to the Covered Bond Guarantor and will be used by the Covered Bond Guarantor
in the same manner as all other moneys available to it from time to time.
Following service of a Notice to Pay on the Covered Bond Guarantor, the
Covered Bond Guarantor will, subject to the terms of the Bond Trust Deed, pay
or procure to be paid on each Scheduled Payment Date to or to the order of the
Bond Trustee (for the benefit of the Covered Bondholders) an amount equal to
those Guaranteed Amounts which have become Due for Payment, but which have not
been paid by the Issuer.
Payments by the Covered Bond Guarantor under the Covered Bond Guarantee will
be made in accordance with the Guarantee Priority of Payments.
For a more detailed description of the transactions summarised above relating
to the Covered Bonds see, amongst other relevant sections of this Prospectus,
"Principal Characteristics of the Programme", "General Description of the
Programme", "Risk Factors", "Overview of the Principal Documents", "Credit
Structure", "Cashflows", "The Mortgage Loan Rights" and "Terms and Conditions
of the Covered Bonds", below.
General Description of the Programme
The following overview does not purport to be complete and is taken from, and is qualified in its entirety by, the remainder of this Prospectus and, in relation to the terms and conditions of any particular Tranche of Covered Bonds, the Applicable Final Terms (or, in the case of Exempt Covered Bonds, the Applicable Pricing Supplement). Words and expressions defined elsewhere in this Prospectus will have the same meanings in this overview. A glossary of certain defined terms is contained at the end of this Prospectus.
Bank of Queensland Limited ABN 32 009 656 740, is a public limited company
incorporated in the Commonwealth of Australia and its registered office is
Level 6, 100 Skyring Terrace, Newstead, Queensland 4006, Australia (BOQ).
For further information about the Issuer, please see the section of this
Prospectus entitled "Bank of Queensland Limited" below.
Issuer:
Issuer's Legal Entity Identifier: 549300WFIN7T02UKDG08
Perpetual Corporate Trust Limited ABN 99 000 341 533, incorporated with
limited liability in the Commonwealth of Australia and having its registered
office at Level 18, 123 Pitt Street, Sydney, New South Wales 2000 Australia,
as trustee of the BOQ Covered Bond Trust (the Trust).
Covered Bond Guarantor:
In its capacity as trustee of the Trust, the Covered Bond Guarantor's
principal business is to acquire, inter alia, Mortgage Loan Rights from the
Seller pursuant to the terms of the Mortgage Sale Agreement and to guarantee
certain payments in respect of the Covered Bonds. The Covered Bond Guarantor
will hold the Mortgage Loan Rights forming part of the Assets of the Trust and
the other Charged Property in accordance with the terms of the Programme
Documents.
The Covered Bond Guarantor has provided a guarantee covering all Guaranteed
Amounts when the same become Due for Payment, but only following service on
the Issuer of an Issuer Acceleration Notice and service on the Covered Bond
Guarantor of a Notice to Pay or, if earlier, the service on the Issuer and the
Covered Bond Guarantor of a Covered Bond Guarantee Acceleration Notice. The
obligations of the Covered Bond Guarantor under the Covered Bond Guarantee and
the other Programme Documents to which it is a party are secured by the
Charged Property from time to time of the Covered Bond Guarantor.
The liability of the Covered Bond Guarantor to make payments under the
Programme Documents (including under the Covered Bond Guarantee) is limited to
its right of indemnity from the Assets of the Trust. Except in the case of,
and to the extent that the Covered Bond Guarantor's right of indemnification
against the Assets of the Trust is reduced as a result of fraud, negligence or
wilful default, no rights may be enforced against the personal assets of the
Covered Bond Guarantor by any person and no proceedings may be brought against
the Covered Bond Guarantor except to the extent of the Covered Bond
Guarantor's right of indemnity and reimbursement out of the Assets of the
Trust. Other than in the exception previously mentioned, the personal assets
of the Covered Bond Guarantor are not available to meet payments under the
Covered Bond Guarantee.
The Trust: The Trust is established for purposes relating only to the Covered Bonds,
including (without limitation) the acquisition, management and sale of,
amongst other things, Mortgage Loan Rights, the borrowing of moneys to fund
the acquisition of such assets, the hedging of risks associated with such
assets and such funding, the acquisition, management and sale of Substitution
Assets and Authorised Investments, the giving of guarantees, the granting of
security and any purpose which is ancillary or incidental to any of the
foregoing.
Initial Capital Unitholder: BOQ.
Initial Income Unitholder: BOQ.
Trust Manager: B.Q.L. Management Pty Ltd ABN 87 081 052 342, is a private limited company
incorporated in the Commonwealth of Australia and its registered office is
Level 6, 100 Skyring Terrace, Newstead, Queensland 4006, Australia (BQLM).
Seller: The Seller under the Programme is BOQ, which is in the business, inter alia,
of originating and acquiring residential mortgage loans and conducting other
banking related activities.
Servicer: Pursuant to the terms of the Servicing Deed, BOQ has been appointed to service
the Mortgage Loan Rights sold to the Covered Bond Guarantor by the Seller.
The Bank of New York Mellon, London Branch whose registered office is at 160
Queen Victoria Street, London, EC4V 4LA, United Kingdom, has been appointed
pursuant to the Principal Agency Agreement as Principal Paying Agent and
Transfer Agent.
Principal Paying Agent and Transfer Agent:
Registrar: The Bank of New York Mellon SA/NV, Luxembourg Branch whose registered office
is at 2-4 Eugene Ruppert, Vertigo Building, Polaris L-2453 Luxembourg, has
been appointed pursuant to the Registrar.
A$ Registrar: Austraclear Services Limited ABN 28 003 284 419 who has an office at 20 Bridge
Street, Sydney NSW 2000, Australia will be appointed pursuant to the A$
Registry Agreement as A$ Registrar.
Bond Trustee: BNY Trust Company of Australia Limited ABN 49 050 294 052 whose registered
office is at Level 2, 1 Bligh Street, Sydney, NSW, 2000, Australia, has been
appointed to act as Bond Trustee on behalf of the Covered Bondholders and the
Couponholders in respect of the Covered Bonds and holds the benefit of, inter
alia, the covenant to pay and the Covered Bond Guarantee on behalf of the
Covered Bondholders and the Couponholders pursuant to the Bond Trust Deed.
Security Trustee: P.T. Limited ABN 67 004 454 666, whose registered office is at Level 18, 123
Pitt Street, Sydney, New South Wales 2000, Australia has been appointed to act
as Security Trustee to hold the benefit of the Security granted by the Covered
Bond Guarantor to the Security Trustee (for the Secured Creditors) pursuant to
the Security Deed.
Cover Pool Monitor: KPMG, whose registered office is at Riparian Plaza, 71 Eagle Street, Brisbane
QLD 4000, Australia has been appointed as Cover Pool Monitor pursuant to the
Cover Pool Monitor Agreement as an independent monitor to perform tests in
respect of the Asset Coverage Test and Amortisation Test, to test compliance
of the Assets forming part of the Trust with the requirements of the
Australian Banking Act (including the Legislated Collateralisation Test) and
to assess whether the Trust Manager is keeping an accurate register of the
Assets forming part of the Trust.
Covered Bond Swap Providers: Each entity which agrees to act as a swap provider to the Covered Bond
Guarantor to hedge certain interest rate, currency and/or other risks in
respect of amounts received by the Covered Bond Guarantor under the Mortgage
Loans and Interest Rate Swaps and, in the case of a Non-Forward Starting
Covered Bond Swap, amounts payable by the Covered Bond Guarantor under the
Intercompany Notes (prior to the service of a Notice to Pay) and, in the case
of a Non-Forward Starting Covered Bond Swap and Forward Starting Covered Bond
Swap, under the Covered Bond Guarantee in respect of the Covered Bonds (after
service of a Notice to Pay) by entering into one or more Covered Bond Swaps
with the Covered Bond Guarantor and the Security Trustee under a Covered Bond
Swap Agreement in respect of each relevant Series or Tranche of Covered Bonds
(where applicable).
Interest Rate Swap Provider: BOQ (in its capacity as the Interest Rate Swap Provider) has agreed to act as
a swap provider to the Covered Bond Guarantor to hedge possible variances
between (a) the rates of interest payable on the Mortgage Loans and on certain
other Assets forming part of the Trust and (b) the interest basis payable by
the Covered Bond Guarantor under the Covered Bond Swaps, the Intercompany
Notes (or the Covered Bond Guarantee) and the Demand Note, by entering into
the Interest Rate Swaps with the Covered Bond Guarantor, the Standby Swap
Provider and the Security Trustee under the Interest Rate Swap Agreement.
Standby Swap Provider: The entity which agrees to act as a standby swap provider to the Covered Bond
Guarantor to, in certain circumstances, act in place of the Interest Rate Swap
Provider, by entering into the Fixed Rate Swap with the Covered Bond
Guarantor, the Interest Rate Swap Provider and the Security Trustee under the
Interest Rate Swap Agreement.
Account Bank: Macquarie Bank Limited ABN 46 008 583 542, whose registered office is at Level
6, 50 Martin Place Sydney, New South Wales 2000, Australia has been appointed
as the initial Account Bank to the Covered Bond Guarantor pursuant to the
terms of the Account Bank Agreement.
Programme Description: Reg S Covered Bond Programme.
Arranger: National Australia Bank Limited ABN 12 004 044 937 in respect of any issuance
of Covered Bonds.
Dealers: In respect of any issuance of Covered Bonds, Australia and New Zealand Banking
Group Limited ABN 11 005 357 522, BNP Paribas, Commerzbank Aktiengesellschaft,
ING Bank N.V., National Australia Bank Limited ABN 12 004 044 937, UBS AG
London Branch and any other Dealer appointed from time to time in accordance
with the Programme Agreement which appointment may be to a specific issue or
on an ongoing basis.
Certain Restrictions: Each issue of Covered Bonds denominated in a currency in respect of which
particular laws, guidelines, regulations, restrictions or reporting
requirements apply will only be issued in circumstances which comply with such
laws, guidelines, regulations, restrictions or reporting requirements from
time to time (see the section of this Prospectus entitled "Subscription and
Sale and Transfer and Selling Restrictions" below).
Programme Size: Up to AUD6,000,000,000 (or its equivalent in other currencies determined by
reference to the spot rate for the sale of AUD dollars against the purchase of
such currency in the London foreign exchange market quoted by any leading bank
selected by the Issuer on the relevant date of agreement (or the preceding day
on which commercial banks and foreign exchange markets are open for business
in London) between the Issuer and the relevant Dealer(s) for issue of the
Covered Bonds) outstanding at any time. The Issuer may increase the amount
of the Programme in accordance with the terms of the Programme Agreement.
Distribution: Covered Bonds may be distributed under the Programme by way of private or
public placement and in each case on a syndicated or non‑syndicated basis,
subject to the restrictions set forth in the section of this Prospectus
entitled "Subscription and Sale and Transfer and Selling Restrictions" below.
Specified Currencies: Subject to any applicable legal or regulatory restrictions, such currency or
currencies as may be agreed from time to time by the Issuer, the relevant
Dealer(s), the Principal Paying Agent and the Bond Trustee (as set out in the
Applicable Final Terms (or, in the case of Exempt Covered Bonds, the
Applicable Pricing Supplement)).
Maturities: Such maturities as may be agreed between the Issuer and the relevant Dealer(s)
and as indicated in the Applicable Final Terms (or, in the case of Exempt
Covered Bonds, the Applicable Pricing Supplement), subject to such minimum or
maximum maturities as may be allowed or required from time to time by the
relevant central bank (or equivalent body) or any laws or regulations
applicable to the Issuer or the relevant Specified Currency.
Issue Price: Covered Bonds may be issued at par or at a premium or discount to par on a
fully-paid basis, as set out in the relevant Final Terms.
Form of Covered Bonds: The Covered Bonds will be issued in bearer or registered form as described in
the section of this Prospectus entitled "Form of the Covered Bonds" below.
Registered Covered Bonds and A$ Registered Covered Bonds will not be
exchangeable for Bearer Covered Bonds and vice versa.
Interest on Covered Bonds in bearer form will only be payable outside the
United States and its possessions.
Covered Bonds may be Fixed Rate Covered Bonds or Floating Rate Covered Bonds,
depending on the Applicable Final Terms (or, in the case of Exempt Covered
Bonds, the Applicable Pricing Supplement), and subject, in each case, to
issuance of a Rating Affirmation Notice by the Issuer.
Fixed Rate Covered Bonds: Fixed Rate Covered Bonds will bear interest at a fixed rate which will be
payable on such date or dates as may be agreed between the Issuer and the
relevant Dealer(s) and on redemption and will be calculated on the basis of
such Day Count Fraction as may be agreed between the Issuer and the relevant
Dealer(s) (as set out in the Applicable Final Terms (or, in the case of Exempt
Covered Bonds, the Applicable Pricing Supplement)).
Floating Rate Covered Bonds: Floating Rate Covered Bonds will bear interest at a rate determined:
(i) on the basis of a reference rate appearing on the agreed
screen page of a commercial quotation service; or
(ii) on such other basis as may be agreed between the Issuer and
the relevant Dealer(s),
in each case as set out in the Applicable Final Terms (or, in the case of
Exempt Covered Bonds, the Applicable Pricing Supplement).
The margin (if any) relating to such floating rate will be agreed between the
Issuer and the relevant Dealer(s) for each issue of Floating Rate Covered
Bonds as set out in the Applicable Final Terms (or, in the case of Exempt
Covered Bonds, the Applicable Pricing Supplement).
Other provisions in relation to Floating Rate Covered Bonds: Floating Rate Covered Bonds may also have a maximum interest rate, a minimum
interest rate or both (as indicated in the Applicable Final Terms (or, in the
case of Exempt Covered Bonds, the Applicable Pricing Supplement)). Interest
on Floating Rate Covered Bonds in respect of each Interest Period, as agreed
prior to issue by the Issuer and the relevant Dealer(s), will be payable on
such Interest Payment Dates, and will be calculated on the basis of such Day
Count Fraction, as may be agreed between the Issuer and the relevant
Dealer(s), as set out in the Applicable Final Terms (or, in the case of Exempt
Covered Bonds, the Applicable Pricing Supplement).
Redemption: The Applicable Final Terms (or, in the case of Exempt Covered Bonds, the
Applicable Pricing Supplement) for a Series of Covered Bonds will indicate
either that the relevant Covered Bonds of such Series cannot be redeemed prior
to their stated maturity (other than for taxation reasons or if it becomes
unlawful for the Intercompany Notes and/or the Demand Note to remain
outstanding or if a Covered Bond Guarantor Event of Default occurs) or that
such Covered Bonds will be redeemable at the option of the Issuer upon giving
notice to the Covered Bondholders, on a date or dates specified prior to such
stated maturity and at a price or prices and on such other terms as may be
agreed between the Issuer and the relevant Dealer(s) (as set out in the
Applicable Final Terms (or, in the case of Exempt Covered Bonds, the
Applicable Pricing Supplement)).
Extendable obligations under the Covered Bond Guarantee and Conditional Prior to the Conversion Event Date:
Pass-Through Covered Bonds:
(i) if the Issuer fails to pay, in full, the Final Redemption
Amount for a Series of Covered Bonds on the Final Maturity Date for such
Covered Bonds (or by the end of the applicable grace period) and, following
the service of a Notice to Pay on the Covered Bond Guarantor by no later than
the date falling one Business Day prior to the Extension Determination Date,
the Covered Bond Guarantor fails to pay, in full, the Guaranteed Amount equal
to the unpaid portion of such Final Redemption Amount by no later than the
Extension Determination Date for such Covered Bonds in accordance with the
terms of the Covered Bond Guarantee (for example because, following the
service of a Notice to Pay on the Covered Bond Guarantor, there are
insufficient moneys available to it to pay, in accordance with the Guarantee
Priority of Payments, such Guaranteed Amounts in full), then the obligation of
the Covered Bond Guarantor to pay the unpaid amount in respect of that Series
of Covered Bonds will be deferred (and a Covered Bond Guarantor Event of
Default will not occur as a result of such failure) until the first Interest
Payment Date thereafter on which sufficient moneys are available (after
providing for liabilities ranking in priority thereto or pari passu and
rateably therewith subject to and in accordance with the Guarantee Priority of
Payments) to fund the payment of the balance of the Final Redemption Amount,
or any part thereof, provided that such payment will not be deferred beyond
the date which falls 31.5 years after the Final Maturity Date in relation to
that Series of Covered Bonds (being the Extended Due for Payment Date in
respect of that Series of Covered Bonds) when the unpaid portion of such Final
Redemption Amount (together with accrued interest) will be due and payable;
and
(ii) if an Issuer Event of Default has occurred (x) in accordance
with Condition 9(a) (other than in accordance with Condition 9(a)(i) as a
result of a failure to pay the Final Redemption Amount in respect of a Series
of Covered Bonds) and the Bond Trustee has served a Notice to Pay on the
Covered Bond Guarantor or (y) in accordance with Condition 9(a)(i) as a result
of a failure to pay the Final Redemption Amount in respect of a Series of
Covered Bonds and such Series of Covered Bonds has been redeemed in full and
at such time there are no Pass-Through Covered Bonds then outstanding, then
payment of the Final Redemption Amount in respect of the then Earliest
Maturing Covered Bonds by the Covered Bond Guarantor under the Covered Bond
Guarantee will be deferred (and such Earliest Maturing Covered Bonds will
convert to Pass-Through Covered Bonds) until the first Interest Payment Date
thereafter on which sufficient moneys are available (after providing for
liabilities ranking in priority thereto or pari passu and rateably therewith
subject to and in accordance with the Guarantee Priority of Payments) to fund
the payment of such amount, or any part thereof, provided that such payment
will not be deferred beyond the date which falls 31.5 years after the
Conversion of that Series of Covered Bonds (being the Extended Due for Payment
Date in respect of that Series of Covered Bonds) when the unpaid portion of
such Final Redemption Amount (together with accrued interest) will be due and
payable.
All Series of Covered Bonds will convert to Pass-Through Covered Bonds
immediately upon the Conversion Event Date, being the date on which an
Amortisation Test Breach Notice is served on the Covered Bond Guarantor and
the Issuer, following the service of a Notice to Pay on the Covered Bond
Guarantor. If the Conversion Event Date occurs (subject as provided below),
payment of the unpaid amount in respect of all Series of Covered Bonds by the
Covered Bond Guarantor under the Covered Bond Guarantee will be deferred
until, in respect of a Series of Covered Bonds, the earlier of (a) the date
which falls 31.5 years after the Final Maturity Date in relation to that
Series of Covered Bonds; (b) the date which falls 31.5 years after the
Conversion of that Series of Covered Bonds and (c) the date which falls 31.5
years after the Conversion Event Date (such applicable date, being the
Extended Due for Payment Date in respect of that Series of Covered Bonds). The
Covered Bond Guarantor (at the direction of the Trust Manager) must on the
next, and each following Interest Payment Date for each Series of Covered
Bonds, apply the moneys (if any) available for that Series of Covered Bonds on
a Distribution Date (after paying or providing for payment of higher ranking
or pari passu amounts in accordance with the Guarantee Priority of Payments)
towards payment, in whole or part, of the Final Redemption Amount of that
Series of Covered Bonds (and to such extent, the Final Redemption Amount will,
for the purpose of the Guarantee Priority of Payments and all other purposes,
be due) on such Interest Payment Date.
In each of the circumstances above, interest will accrue on any unpaid portion
of a Series of Covered Bonds during any such extended period and will be due
and payable on each Interest Payment Date up to, and including, the Extended
Due for Payment Date in respect of that Series of Covered Bonds in accordance
with Condition 4.
Denomination of Covered Bonds: Covered Bonds will be issued in denominations of €100,000 or such other
denominations as may be agreed between the Issuer and the relevant Dealer(s)
and as indicated in the Applicable Final Terms (or, in the case of Exempt
Covered Bonds, the Applicable Pricing Supplement) provided that the minimum
denomination of each Covered Bond will be €100,000 (or, if the Covered Bonds
are denominated in a currency other than euro, at least the equivalent amount
in such currency) or such other higher amount as may be required from time to
time by the relevant central bank (or equivalent body) or any laws or
regulations applicable to the relevant Specified Currency and, in the case of
any Covered Bonds offered in Australia, the minimum subscription amount in
respect of an issue or transfer is A$500,000 (disregarding any amount lent by
the offeror, the Issuer or any associated person of the offeror or Issuer).
Taxation: All payments in respect of the Covered Bonds will be made without deduction or
withholding for or on account of any taxes, subject as provided in Condition
7. If any such deduction or withholding is made by the Issuer, the Issuer
will, only in the limited circumstances provided in Condition 7 and only where
the Applicable Final Terms (or, in the case of Exempt Covered Bonds, the
Applicable Pricing Supplement) indicate that the tax gross up by the Issuer in
accordance with Condition 7 is applicable, pay additional amounts in respect
of the amounts so deducted or withheld.
If any payments made by the Covered Bond Guarantor under the Covered Bond
Guarantee are or become subject to any such withholding or deduction, the
Covered Bond Guarantor will not be obliged to pay any additional amount as a
consequence under Condition 7. The Guaranteed Amounts payable by the Covered
Bond Guarantor under the Covered Bond Guarantee do not include any additional
amounts the Issuer would be obliged to pay as a result of any deduction or
withholding in accordance with Condition 7.
In no event will the Issuer or Covered Bond Guarantor be required to pay any
additional amounts in respect of the Covered Bonds for, or on account of, any
withholding or deduction required pursuant to an agreement described in
Section 1471(b) of the U.S. Internal Revenue Code of 1986 (the Code) or
otherwise imposed pursuant to Sections 1471 through 1474 of the Code, any
regulations or agreements thereunder, any official interpretations thereof, or
any law implementing an intergovernmental approach thereto. For a further
discussion of any withholding tax obligations see the section "Taxation" of
this Prospectus.
Cross Default: If an Issuer Acceleration Notice is served, then the Covered Bonds of all
Series outstanding will be accelerated against the Issuer.
If a Covered Bond Guarantee Acceleration Notice is served, then the obligation
of the Covered Bond Guarantor to pay the Guaranteed Amounts in respect of all
Series of Covered Bonds outstanding will be accelerated.
Status of the Covered Bonds:
The Covered Bonds will constitute direct, unsecured, unsubordinated and unconditional obligations of the Issuer and will rank pari passu without any preference or priority among themselves and (save for any applicable statutory provisions) at least equally
with all other present and future unsecured and unsubordinated obligations of the Issuer, from time to time outstanding. The Covered Bonds do not constitute deposits or deposit liabilities of BOQ, are not protected accounts for the purposes of the
depositor protection provisions in Division 2 of Part II of the Australian Banking Act (or of the Financial Claims Scheme established under Division 2AA of Part II of the Australian Banking Act (the Financial Claims Scheme)) and are not guaranteed or
insured by any government, government agency or compensation scheme of the Commonwealth of Australia or any other jurisdiction or by any other party.
Covered Bond Guarantee: Payment of Guaranteed Amounts in respect of the Covered Bonds when Due for
Payment will be irrevocably guaranteed by the Covered Bond Guarantor under the
Covered Bond Guarantee. The Covered Bond Guarantor will be under no
obligation to make payment in respect of the Guaranteed Amounts when Due for
Payment unless (a) an Issuer Event of Default has occurred and is continuing,
and a Notice to Pay is served on the Covered Bond Guarantor and an Issuer
Acceleration Notice has been served on the Issuer; or (b) a Covered Bond
Guarantor Event of Default has occurred and is continuing and a Covered Bond
Guarantee Acceleration Notice is served on the Covered Bond Guarantor and the
Issuer. The obligations of the Covered Bond Guarantor under the Covered Bond
Guarantee will accelerate against the Covered Bond Guarantor, and the
Guaranteed Amounts will become immediately due and payable, upon the service
of a Covered Bond Guarantee Acceleration Notice. The obligations of the
Covered Bond Guarantor under the Covered Bond Guarantee constitute direct,
absolute and (following service of an Issuer Acceleration Notice and Notice to
Pay or a Covered Bond Guarantee Acceleration Notice) unconditional obligations
of the Covered Bond Guarantor secured against the Mortgage Loan Rights and
other Assets from time to time forming part of the Trust and limited in
recourse against the Covered Bond Guarantor.
The liability of the Covered Bond Guarantor to make payments under the
Programme Documents (including under the Covered Bond Guarantee) is limited to
its right of indemnity from the Assets of the Trust. Except and to the extent
that the Covered Bond Guarantor's right of indemnification against the Assets
of the Trust is reduced as a result of the Covered Bond Guarantor's fraud,
negligence or wilful default, no rights may be enforced against the personal
assets of the Covered Bond Guarantor by any person and no proceedings may be
brought against the Covered Bond Guarantor except to the extent of the Covered
Bond Guarantor's right of indemnity and reimbursement out of the Assets of the
Trust. Other than in the exception previously mentioned, the personal assets
of the Covered Bond Guarantor are not available to meet payments under the
Covered Bond Guarantee.
Ratings: Covered Bonds to be issued under the Programme will have the credit ratings
specified in the Applicable Final Terms (or, in the case of Exempt Covered
Bonds, the Applicable Pricing Supplement) on issuance.
In general, European regulated investors are restricted under the CRA
Regulation from using credit ratings for regulatory purposes in the EEA,
unless such ratings are issued by a credit rating agency established in the
EEA and registered under the CRA Regulation (and such registration has not
been withdrawn or suspended, subject to transitional provisions that apply in
certain circumstances whilst the registration application is pending). Such
general restriction will also apply in the case of credit ratings issued by
third country non-EEA credit rating agencies, unless the relevant credit
ratings are endorsed by an EEA-registered credit rating agency or the relevant
third country rating agency is certified in accordance with the CRA Regulation
(and such endorsement action or certification, as the case may be, has not
been withdrawn or suspended).
Investors regulated in the UK are subject to similar restrictions under the UK
CRA Regulation. As such, UK regulated investors are required to use for UK
regulatory purposes ratings issued by a credit rating agency established in
the UK and registered under the UK CRA Regulation. In the case of ratings
issued by third country non-UK credit rating agencies, third country credit
ratings can either be: (a) endorsed by a UK registered credit rating agency;
or (b) issued by a third country credit rating agency that is certified in
accordance with the UK CRA Regulation. Note this is subject, in each case, to
(a) the relevant UK registration, certification or endorsement, as the case
may be, not having been withdrawn or suspended, and (b) transitional
provisions that apply in certain circumstances.
If the status of the rating agency rating the Covered Bonds changes for the
purposes of the CRA Regulation or the UK CRA Regulation, relevant regulated
investors may no longer be able to use the rating for regulatory purposes in
the EEA or the UK, as applicable, and the Covered Bonds may have a different
regulatory treatment, which may impact the value of the Covered Bonds and
their liquidity in the secondary market.
Ratings are not a recommendation or suggestion, directly or indirectly, to any
investor or any other person, to buy, sell, make or hold any investment, loan
or security or to undertake any investment strategy with respect to any
investment, loan or security for a particular investor (including without
limitation, any accounting and/or regulatory treatment), or the tax-exempt
nature or taxability of payments made in respect of any investment, loan or
security. A credit rating may be subject to revision, suspension or withdrawal
at any time by the assigning Rating Agency. The Rating Agencies are not
advisors, and nor do the Rating Agencies provide investors or any other party
any financial advice, or any legal, auditing, accounting, appraisal, valuation
or actuarial services. A rating should not be viewed as a replacement for
such advice or services.
Listing and admission to trading: Application has been made by the Issuer to the FCA for Covered Bonds issued
under the Programme to be admitted to, during the period of 12 months from the
date of this Prospectus, the Official List and to the London Stock Exchange
for such Covered Bonds to be admitted to trading on the main market of the
London Stock Exchange.
The Applicable Pricing Supplement, in the case of Exempt Covered Bonds, will
state whether or not the relevant Exempt Covered Bonds are to be listed and/or
admitted to trading and, if so, on which stock exchanges and/or markets.
The Programme Agreement and any non-contractual obligations arising out of or
in connection with it are governed by, and will be construed in accordance
with, English law.
Governing Law:
The Establishment Deed, the Mortgage Sale Agreement, the Servicing Deed, the
Intercompany Note Subscription Agreement, the Demand Note Subscription
Agreement, the Management Agreement, the Security Deed, the Definitions
Schedule, the Cover Pool Monitor Agreement, the Account Bank Agreement, the
Interest Rate Swap Agreement, each Covered Bond Swap Agreement and the A$
Registry Agreement are governed by, and will be construed in accordance with,
the laws applying in the State of New South Wales, Australia.
The Bond Trust Deed (including the Covered Bond Guarantee), the Principal
Agency Agreement, the Covered Bonds (other than any A$ Registered Covered
Bonds), and the Coupons and any non-contractual obligations arising out of or
in connection with them are governed by, and will be construed in accordance
with, English law unless specifically stated to the contrary. In this
regard, the covenant to pay made by the Issuer to the Bond Trustee in respect
of the A$ Registered Covered Bonds in the Bond Trust Deed, the provisions
relating to the maintenance of the Register in respect of the A$ Registered
Covered Bonds in the Bond Trust Deed and the provisions relating to the
limitation of liability of the Covered Bond Guarantor in the Bond Trust Deed,
the Principal Agency Agreement and the Covered Bonds are governed by, and will
be construed in accordance with, the laws applying in the State of New South
Wales, Australia.
Selling Restrictions: There are restrictions on the offer, sale and transfer of any Series or
Tranche of Covered Bonds. See the section of this Prospectus entitled
"Subscription and Sale and Transfer and Selling Restrictions" below.
Risk Factors: There are certain risks related to the issue of Covered Bonds under the
Programme which investors should ensure they fully understand, a summary of
which are set out in the section of this Prospectus entitled "Risk Factors"
and include, inter alia, the risk of subsequent changes in the actual or
perceived creditworthiness of the Issuer or the Covered Bond Guarantor (as
applicable), which may adversely affect the market value of the Covered
Bonds. In addition, there are certain factors which are material for the
purpose of assessing the market risks associated with Covered Bonds issued
under the Programme which include, inter alia, risks related to the structure
of a particular issue of Covered Bonds (including that there is limited
recourse to the Covered Bond Guarantor), modifications and waivers of the
terms and conditions of the Covered Bonds in certain circumstances without the
consent of all of the Covered Bondholders, changes in laws, taxation laws or
regulations which affect the Covered Bonds, risks related to secondary market
trading of the Covered Bonds and exchange rate risks. For further
particulars, see the section of this Prospectus entitled "Risk Factors" below.
Issuer:
Bank of Queensland Limited ABN 32 009 656 740, is a public limited company
incorporated in the Commonwealth of Australia and its registered office is
Level 6, 100 Skyring Terrace, Newstead, Queensland 4006, Australia (BOQ).
For further information about the Issuer, please see the section of this
Prospectus entitled "Bank of Queensland Limited" below.
Issuer's Legal Entity Identifier:
549300WFIN7T02UKDG08
Covered Bond Guarantor:
Perpetual Corporate Trust Limited ABN 99 000 341 533, incorporated with
limited liability in the Commonwealth of Australia and having its registered
office at Level 18, 123 Pitt Street, Sydney, New South Wales 2000 Australia,
as trustee of the BOQ Covered Bond Trust (the Trust).
In its capacity as trustee of the Trust, the Covered Bond Guarantor's
principal business is to acquire, inter alia, Mortgage Loan Rights from the
Seller pursuant to the terms of the Mortgage Sale Agreement and to guarantee
certain payments in respect of the Covered Bonds. The Covered Bond Guarantor
will hold the Mortgage Loan Rights forming part of the Assets of the Trust and
the other Charged Property in accordance with the terms of the Programme
Documents.
The Covered Bond Guarantor has provided a guarantee covering all Guaranteed
Amounts when the same become Due for Payment, but only following service on
the Issuer of an Issuer Acceleration Notice and service on the Covered Bond
Guarantor of a Notice to Pay or, if earlier, the service on the Issuer and the
Covered Bond Guarantor of a Covered Bond Guarantee Acceleration Notice. The
obligations of the Covered Bond Guarantor under the Covered Bond Guarantee and
the other Programme Documents to which it is a party are secured by the
Charged Property from time to time of the Covered Bond Guarantor.
The liability of the Covered Bond Guarantor to make payments under the
Programme Documents (including under the Covered Bond Guarantee) is limited to
its right of indemnity from the Assets of the Trust. Except in the case of,
and to the extent that the Covered Bond Guarantor's right of indemnification
against the Assets of the Trust is reduced as a result of fraud, negligence or
wilful default, no rights may be enforced against the personal assets of the
Covered Bond Guarantor by any person and no proceedings may be brought against
the Covered Bond Guarantor except to the extent of the Covered Bond
Guarantor's right of indemnity and reimbursement out of the Assets of the
Trust. Other than in the exception previously mentioned, the personal assets
of the Covered Bond Guarantor are not available to meet payments under the
Covered Bond Guarantee.
The Trust:
The Trust is established for purposes relating only to the Covered Bonds,
including (without limitation) the acquisition, management and sale of,
amongst other things, Mortgage Loan Rights, the borrowing of moneys to fund
the acquisition of such assets, the hedging of risks associated with such
assets and such funding, the acquisition, management and sale of Substitution
Assets and Authorised Investments, the giving of guarantees, the granting of
security and any purpose which is ancillary or incidental to any of the
foregoing.
Initial Capital Unitholder:
BOQ.
Initial Income Unitholder:
BOQ.
Trust Manager:
B.Q.L. Management Pty Ltd ABN 87 081 052 342, is a private limited company
incorporated in the Commonwealth of Australia and its registered office is
Level 6, 100 Skyring Terrace, Newstead, Queensland 4006, Australia (BQLM).
Seller:
The Seller under the Programme is BOQ, which is in the business, inter alia,
of originating and acquiring residential mortgage loans and conducting other
banking related activities.
Servicer:
Pursuant to the terms of the Servicing Deed, BOQ has been appointed to service
the Mortgage Loan Rights sold to the Covered Bond Guarantor by the Seller.
Principal Paying Agent and Transfer Agent:
The Bank of New York Mellon, London Branch whose registered office is at 160
Queen Victoria Street, London, EC4V 4LA, United Kingdom, has been appointed
pursuant to the Principal Agency Agreement as Principal Paying Agent and
Transfer Agent.
Registrar:
The Bank of New York Mellon SA/NV, Luxembourg Branch whose registered office
is at 2-4 Eugene Ruppert, Vertigo Building, Polaris L-2453 Luxembourg, has
been appointed pursuant to the Registrar.
A$ Registrar:
Austraclear Services Limited ABN 28 003 284 419 who has an office at 20 Bridge
Street, Sydney NSW 2000, Australia will be appointed pursuant to the A$
Registry Agreement as A$ Registrar.
Bond Trustee:
BNY Trust Company of Australia Limited ABN 49 050 294 052 whose registered
office is at Level 2, 1 Bligh Street, Sydney, NSW, 2000, Australia, has been
appointed to act as Bond Trustee on behalf of the Covered Bondholders and the
Couponholders in respect of the Covered Bonds and holds the benefit of, inter
alia, the covenant to pay and the Covered Bond Guarantee on behalf of the
Covered Bondholders and the Couponholders pursuant to the Bond Trust Deed.
Security Trustee:
P.T. Limited ABN 67 004 454 666, whose registered office is at Level 18, 123
Pitt Street, Sydney, New South Wales 2000, Australia has been appointed to act
as Security Trustee to hold the benefit of the Security granted by the Covered
Bond Guarantor to the Security Trustee (for the Secured Creditors) pursuant to
the Security Deed.
Cover Pool Monitor:
KPMG, whose registered office is at Riparian Plaza, 71 Eagle Street, Brisbane
QLD 4000, Australia has been appointed as Cover Pool Monitor pursuant to the
Cover Pool Monitor Agreement as an independent monitor to perform tests in
respect of the Asset Coverage Test and Amortisation Test, to test compliance
of the Assets forming part of the Trust with the requirements of the
Australian Banking Act (including the Legislated Collateralisation Test) and
to assess whether the Trust Manager is keeping an accurate register of the
Assets forming part of the Trust.
Covered Bond Swap Providers:
Each entity which agrees to act as a swap provider to the Covered Bond
Guarantor to hedge certain interest rate, currency and/or other risks in
respect of amounts received by the Covered Bond Guarantor under the Mortgage
Loans and Interest Rate Swaps and, in the case of a Non-Forward Starting
Covered Bond Swap, amounts payable by the Covered Bond Guarantor under the
Intercompany Notes (prior to the service of a Notice to Pay) and, in the case
of a Non-Forward Starting Covered Bond Swap and Forward Starting Covered Bond
Swap, under the Covered Bond Guarantee in respect of the Covered Bonds (after
service of a Notice to Pay) by entering into one or more Covered Bond Swaps
with the Covered Bond Guarantor and the Security Trustee under a Covered Bond
Swap Agreement in respect of each relevant Series or Tranche of Covered Bonds
(where applicable).
Interest Rate Swap Provider:
BOQ (in its capacity as the Interest Rate Swap Provider) has agreed to act as
a swap provider to the Covered Bond Guarantor to hedge possible variances
between (a) the rates of interest payable on the Mortgage Loans and on certain
other Assets forming part of the Trust and (b) the interest basis payable by
the Covered Bond Guarantor under the Covered Bond Swaps, the Intercompany
Notes (or the Covered Bond Guarantee) and the Demand Note, by entering into
the Interest Rate Swaps with the Covered Bond Guarantor, the Standby Swap
Provider and the Security Trustee under the Interest Rate Swap Agreement.
Standby Swap Provider:
The entity which agrees to act as a standby swap provider to the Covered Bond
Guarantor to, in certain circumstances, act in place of the Interest Rate Swap
Provider, by entering into the Fixed Rate Swap with the Covered Bond
Guarantor, the Interest Rate Swap Provider and the Security Trustee under the
Interest Rate Swap Agreement.
Account Bank:
Macquarie Bank Limited ABN 46 008 583 542, whose registered office is at Level
6, 50 Martin Place Sydney, New South Wales 2000, Australia has been appointed
as the initial Account Bank to the Covered Bond Guarantor pursuant to the
terms of the Account Bank Agreement.
Programme Description:
Reg S Covered Bond Programme.
Arranger:
National Australia Bank Limited ABN 12 004 044 937 in respect of any issuance
of Covered Bonds.
Dealers:
In respect of any issuance of Covered Bonds, Australia and New Zealand Banking
Group Limited ABN 11 005 357 522, BNP Paribas, Commerzbank Aktiengesellschaft,
ING Bank N.V., National Australia Bank Limited ABN 12 004 044 937, UBS AG
London Branch and any other Dealer appointed from time to time in accordance
with the Programme Agreement which appointment may be to a specific issue or
on an ongoing basis.
Certain Restrictions:
Each issue of Covered Bonds denominated in a currency in respect of which
particular laws, guidelines, regulations, restrictions or reporting
requirements apply will only be issued in circumstances which comply with such
laws, guidelines, regulations, restrictions or reporting requirements from
time to time (see the section of this Prospectus entitled "Subscription and
Sale and Transfer and Selling Restrictions" below).
Programme Size:
Up to AUD6,000,000,000 (or its equivalent in other currencies determined by
reference to the spot rate for the sale of AUD dollars against the purchase of
such currency in the London foreign exchange market quoted by any leading bank
selected by the Issuer on the relevant date of agreement (or the preceding day
on which commercial banks and foreign exchange markets are open for business
in London) between the Issuer and the relevant Dealer(s) for issue of the
Covered Bonds) outstanding at any time. The Issuer may increase the amount
of the Programme in accordance with the terms of the Programme Agreement.
Distribution:
Covered Bonds may be distributed under the Programme by way of private or
public placement and in each case on a syndicated or non‑syndicated basis,
subject to the restrictions set forth in the section of this Prospectus
entitled "Subscription and Sale and Transfer and Selling Restrictions" below.
Specified Currencies:
Subject to any applicable legal or regulatory restrictions, such currency or
currencies as may be agreed from time to time by the Issuer, the relevant
Dealer(s), the Principal Paying Agent and the Bond Trustee (as set out in the
Applicable Final Terms (or, in the case of Exempt Covered Bonds, the
Applicable Pricing Supplement)).
Maturities:
Such maturities as may be agreed between the Issuer and the relevant Dealer(s)
and as indicated in the Applicable Final Terms (or, in the case of Exempt
Covered Bonds, the Applicable Pricing Supplement), subject to such minimum or
maximum maturities as may be allowed or required from time to time by the
relevant central bank (or equivalent body) or any laws or regulations
applicable to the Issuer or the relevant Specified Currency.
Issue Price:
Covered Bonds may be issued at par or at a premium or discount to par on a
fully-paid basis, as set out in the relevant Final Terms.
Form of Covered Bonds:
The Covered Bonds will be issued in bearer or registered form as described in
the section of this Prospectus entitled "Form of the Covered Bonds" below.
Registered Covered Bonds and A$ Registered Covered Bonds will not be
exchangeable for Bearer Covered Bonds and vice versa.
Interest on Covered Bonds in bearer form will only be payable outside the
United States and its possessions.
Covered Bonds may be Fixed Rate Covered Bonds or Floating Rate Covered Bonds,
depending on the Applicable Final Terms (or, in the case of Exempt Covered
Bonds, the Applicable Pricing Supplement), and subject, in each case, to
issuance of a Rating Affirmation Notice by the Issuer.
Fixed Rate Covered Bonds:
Fixed Rate Covered Bonds will bear interest at a fixed rate which will be
payable on such date or dates as may be agreed between the Issuer and the
relevant Dealer(s) and on redemption and will be calculated on the basis of
such Day Count Fraction as may be agreed between the Issuer and the relevant
Dealer(s) (as set out in the Applicable Final Terms (or, in the case of Exempt
Covered Bonds, the Applicable Pricing Supplement)).
Floating Rate Covered Bonds:
Floating Rate Covered Bonds will bear interest at a rate determined:
(i) on the basis of a reference rate appearing on the agreed
screen page of a commercial quotation service; or
(ii) on such other basis as may be agreed between the Issuer and
the relevant Dealer(s),
in each case as set out in the Applicable Final Terms (or, in the case of
Exempt Covered Bonds, the Applicable Pricing Supplement).
The margin (if any) relating to such floating rate will be agreed between the
Issuer and the relevant Dealer(s) for each issue of Floating Rate Covered
Bonds as set out in the Applicable Final Terms (or, in the case of Exempt
Covered Bonds, the Applicable Pricing Supplement).
Other provisions in relation to Floating Rate Covered Bonds:
Floating Rate Covered Bonds may also have a maximum interest rate, a minimum
interest rate or both (as indicated in the Applicable Final Terms (or, in the
case of Exempt Covered Bonds, the Applicable Pricing Supplement)). Interest
on Floating Rate Covered Bonds in respect of each Interest Period, as agreed
prior to issue by the Issuer and the relevant Dealer(s), will be payable on
such Interest Payment Dates, and will be calculated on the basis of such Day
Count Fraction, as may be agreed between the Issuer and the relevant
Dealer(s), as set out in the Applicable Final Terms (or, in the case of Exempt
Covered Bonds, the Applicable Pricing Supplement).
Redemption:
The Applicable Final Terms (or, in the case of Exempt Covered Bonds, the
Applicable Pricing Supplement) for a Series of Covered Bonds will indicate
either that the relevant Covered Bonds of such Series cannot be redeemed prior
to their stated maturity (other than for taxation reasons or if it becomes
unlawful for the Intercompany Notes and/or the Demand Note to remain
outstanding or if a Covered Bond Guarantor Event of Default occurs) or that
such Covered Bonds will be redeemable at the option of the Issuer upon giving
notice to the Covered Bondholders, on a date or dates specified prior to such
stated maturity and at a price or prices and on such other terms as may be
agreed between the Issuer and the relevant Dealer(s) (as set out in the
Applicable Final Terms (or, in the case of Exempt Covered Bonds, the
Applicable Pricing Supplement)).
Extendable obligations under the Covered Bond Guarantee and Conditional
Pass-Through Covered Bonds:
Prior to the Conversion Event Date:
(i) if the Issuer fails to pay, in full, the Final Redemption
Amount for a Series of Covered Bonds on the Final Maturity Date for such
Covered Bonds (or by the end of the applicable grace period) and, following
the service of a Notice to Pay on the Covered Bond Guarantor by no later than
the date falling one Business Day prior to the Extension Determination Date,
the Covered Bond Guarantor fails to pay, in full, the Guaranteed Amount equal
to the unpaid portion of such Final Redemption Amount by no later than the
Extension Determination Date for such Covered Bonds in accordance with the
terms of the Covered Bond Guarantee (for example because, following the
service of a Notice to Pay on the Covered Bond Guarantor, there are
insufficient moneys available to it to pay, in accordance with the Guarantee
Priority of Payments, such Guaranteed Amounts in full), then the obligation of
the Covered Bond Guarantor to pay the unpaid amount in respect of that Series
of Covered Bonds will be deferred (and a Covered Bond Guarantor Event of
Default will not occur as a result of such failure) until the first Interest
Payment Date thereafter on which sufficient moneys are available (after
providing for liabilities ranking in priority thereto or pari passu and
rateably therewith subject to and in accordance with the Guarantee Priority of
Payments) to fund the payment of the balance of the Final Redemption Amount,
or any part thereof, provided that such payment will not be deferred beyond
the date which falls 31.5 years after the Final Maturity Date in relation to
that Series of Covered Bonds (being the Extended Due for Payment Date in
respect of that Series of Covered Bonds) when the unpaid portion of such Final
Redemption Amount (together with accrued interest) will be due and payable;
and
(ii) if an Issuer Event of Default has occurred (x) in accordance
with Condition 9(a) (other than in accordance with Condition 9(a)(i) as a
result of a failure to pay the Final Redemption Amount in respect of a Series
of Covered Bonds) and the Bond Trustee has served a Notice to Pay on the
Covered Bond Guarantor or (y) in accordance with Condition 9(a)(i) as a result
of a failure to pay the Final Redemption Amount in respect of a Series of
Covered Bonds and such Series of Covered Bonds has been redeemed in full and
at such time there are no Pass-Through Covered Bonds then outstanding, then
payment of the Final Redemption Amount in respect of the then Earliest
Maturing Covered Bonds by the Covered Bond Guarantor under the Covered Bond
Guarantee will be deferred (and such Earliest Maturing Covered Bonds will
convert to Pass-Through Covered Bonds) until the first Interest Payment Date
thereafter on which sufficient moneys are available (after providing for
liabilities ranking in priority thereto or pari passu and rateably therewith
subject to and in accordance with the Guarantee Priority of Payments) to fund
the payment of such amount, or any part thereof, provided that such payment
will not be deferred beyond the date which falls 31.5 years after the
Conversion of that Series of Covered Bonds (being the Extended Due for Payment
Date in respect of that Series of Covered Bonds) when the unpaid portion of
such Final Redemption Amount (together with accrued interest) will be due and
payable.
All Series of Covered Bonds will convert to Pass-Through Covered Bonds
immediately upon the Conversion Event Date, being the date on which an
Amortisation Test Breach Notice is served on the Covered Bond Guarantor and
the Issuer, following the service of a Notice to Pay on the Covered Bond
Guarantor. If the Conversion Event Date occurs (subject as provided below),
payment of the unpaid amount in respect of all Series of Covered Bonds by the
Covered Bond Guarantor under the Covered Bond Guarantee will be deferred
until, in respect of a Series of Covered Bonds, the earlier of (a) the date
which falls 31.5 years after the Final Maturity Date in relation to that
Series of Covered Bonds; (b) the date which falls 31.5 years after the
Conversion of that Series of Covered Bonds and (c) the date which falls 31.5
years after the Conversion Event Date (such applicable date, being the
Extended Due for Payment Date in respect of that Series of Covered Bonds). The
Covered Bond Guarantor (at the direction of the Trust Manager) must on the
next, and each following Interest Payment Date for each Series of Covered
Bonds, apply the moneys (if any) available for that Series of Covered Bonds on
a Distribution Date (after paying or providing for payment of higher ranking
or pari passu amounts in accordance with the Guarantee Priority of Payments)
towards payment, in whole or part, of the Final Redemption Amount of that
Series of Covered Bonds (and to such extent, the Final Redemption Amount will,
for the purpose of the Guarantee Priority of Payments and all other purposes,
be due) on such Interest Payment Date.
In each of the circumstances above, interest will accrue on any unpaid portion
of a Series of Covered Bonds during any such extended period and will be due
and payable on each Interest Payment Date up to, and including, the Extended
Due for Payment Date in respect of that Series of Covered Bonds in accordance
with Condition 4.
Denomination of Covered Bonds:
Covered Bonds will be issued in denominations of €100,000 or such other
denominations as may be agreed between the Issuer and the relevant Dealer(s)
and as indicated in the Applicable Final Terms (or, in the case of Exempt
Covered Bonds, the Applicable Pricing Supplement) provided that the minimum
denomination of each Covered Bond will be €100,000 (or, if the Covered Bonds
are denominated in a currency other than euro, at least the equivalent amount
in such currency) or such other higher amount as may be required from time to
time by the relevant central bank (or equivalent body) or any laws or
regulations applicable to the relevant Specified Currency and, in the case of
any Covered Bonds offered in Australia, the minimum subscription amount in
respect of an issue or transfer is A$500,000 (disregarding any amount lent by
the offeror, the Issuer or any associated person of the offeror or Issuer).
Taxation:
All payments in respect of the Covered Bonds will be made without deduction or
withholding for or on account of any taxes, subject as provided in Condition
7. If any such deduction or withholding is made by the Issuer, the Issuer
will, only in the limited circumstances provided in Condition 7 and only where
the Applicable Final Terms (or, in the case of Exempt Covered Bonds, the
Applicable Pricing Supplement) indicate that the tax gross up by the Issuer in
accordance with Condition 7 is applicable, pay additional amounts in respect
of the amounts so deducted or withheld.
If any payments made by the Covered Bond Guarantor under the Covered Bond
Guarantee are or become subject to any such withholding or deduction, the
Covered Bond Guarantor will not be obliged to pay any additional amount as a
consequence under Condition 7. The Guaranteed Amounts payable by the Covered
Bond Guarantor under the Covered Bond Guarantee do not include any additional
amounts the Issuer would be obliged to pay as a result of any deduction or
withholding in accordance with Condition 7.
In no event will the Issuer or Covered Bond Guarantor be required to pay any
additional amounts in respect of the Covered Bonds for, or on account of, any
withholding or deduction required pursuant to an agreement described in
Section 1471(b) of the U.S. Internal Revenue Code of 1986 (the Code) or
otherwise imposed pursuant to Sections 1471 through 1474 of the Code, any
regulations or agreements thereunder, any official interpretations thereof, or
any law implementing an intergovernmental approach thereto. For a further
discussion of any withholding tax obligations see the section "Taxation" of
this Prospectus.
Cross Default:
If an Issuer Acceleration Notice is served, then the Covered Bonds of all
Series outstanding will be accelerated against the Issuer.
If a Covered Bond Guarantee Acceleration Notice is served, then the obligation
of the Covered Bond Guarantor to pay the Guaranteed Amounts in respect of all
Series of Covered Bonds outstanding will be accelerated.
Status of the Covered Bonds:
The Covered Bonds will constitute direct, unsecured, unsubordinated and unconditional obligations of the Issuer and will rank pari passu without any preference or priority among themselves and (save for any applicable statutory provisions) at least equally with all other present and future unsecured and unsubordinated obligations of the Issuer, from time to time outstanding. The Covered Bonds do not constitute deposits or deposit liabilities of BOQ, are not protected accounts for the purposes of the depositor protection provisions in Division 2 of Part II of the Australian Banking Act (or of the Financial Claims Scheme established under Division 2AA of Part II of the Australian Banking Act (the Financial Claims Scheme)) and are not guaranteed or insured by any government, government agency or compensation scheme of the Commonwealth of Australia or any other jurisdiction or by any other party.
Covered Bond Guarantee:
Payment of Guaranteed Amounts in respect of the Covered Bonds when Due for
Payment will be irrevocably guaranteed by the Covered Bond Guarantor under the
Covered Bond Guarantee. The Covered Bond Guarantor will be under no
obligation to make payment in respect of the Guaranteed Amounts when Due for
Payment unless (a) an Issuer Event of Default has occurred and is continuing,
and a Notice to Pay is served on the Covered Bond Guarantor and an Issuer
Acceleration Notice has been served on the Issuer; or (b) a Covered Bond
Guarantor Event of Default has occurred and is continuing and a Covered Bond
Guarantee Acceleration Notice is served on the Covered Bond Guarantor and the
Issuer. The obligations of the Covered Bond Guarantor under the Covered Bond
Guarantee will accelerate against the Covered Bond Guarantor, and the
Guaranteed Amounts will become immediately due and payable, upon the service
of a Covered Bond Guarantee Acceleration Notice. The obligations of the
Covered Bond Guarantor under the Covered Bond Guarantee constitute direct,
absolute and (following service of an Issuer Acceleration Notice and Notice to
Pay or a Covered Bond Guarantee Acceleration Notice) unconditional obligations
of the Covered Bond Guarantor secured against the Mortgage Loan Rights and
other Assets from time to time forming part of the Trust and limited in
recourse against the Covered Bond Guarantor.
The liability of the Covered Bond Guarantor to make payments under the
Programme Documents (including under the Covered Bond Guarantee) is limited to
its right of indemnity from the Assets of the Trust. Except and to the extent
that the Covered Bond Guarantor's right of indemnification against the Assets
of the Trust is reduced as a result of the Covered Bond Guarantor's fraud,
negligence or wilful default, no rights may be enforced against the personal
assets of the Covered Bond Guarantor by any person and no proceedings may be
brought against the Covered Bond Guarantor except to the extent of the Covered
Bond Guarantor's right of indemnity and reimbursement out of the Assets of the
Trust. Other than in the exception previously mentioned, the personal assets
of the Covered Bond Guarantor are not available to meet payments under the
Covered Bond Guarantee.
Ratings:
Covered Bonds to be issued under the Programme will have the credit ratings
specified in the Applicable Final Terms (or, in the case of Exempt Covered
Bonds, the Applicable Pricing Supplement) on issuance.
In general, European regulated investors are restricted under the CRA
Regulation from using credit ratings for regulatory purposes in the EEA,
unless such ratings are issued by a credit rating agency established in the
EEA and registered under the CRA Regulation (and such registration has not
been withdrawn or suspended, subject to transitional provisions that apply in
certain circumstances whilst the registration application is pending). Such
general restriction will also apply in the case of credit ratings issued by
third country non-EEA credit rating agencies, unless the relevant credit
ratings are endorsed by an EEA-registered credit rating agency or the relevant
third country rating agency is certified in accordance with the CRA Regulation
(and such endorsement action or certification, as the case may be, has not
been withdrawn or suspended).
Investors regulated in the UK are subject to similar restrictions under the UK
CRA Regulation. As such, UK regulated investors are required to use for UK
regulatory purposes ratings issued by a credit rating agency established in
the UK and registered under the UK CRA Regulation. In the case of ratings
issued by third country non-UK credit rating agencies, third country credit
ratings can either be: (a) endorsed by a UK registered credit rating agency;
or (b) issued by a third country credit rating agency that is certified in
accordance with the UK CRA Regulation. Note this is subject, in each case, to
(a) the relevant UK registration, certification or endorsement, as the case
may be, not having been withdrawn or suspended, and (b) transitional
provisions that apply in certain circumstances.
If the status of the rating agency rating the Covered Bonds changes for the
purposes of the CRA Regulation or the UK CRA Regulation, relevant regulated
investors may no longer be able to use the rating for regulatory purposes in
the EEA or the UK, as applicable, and the Covered Bonds may have a different
regulatory treatment, which may impact the value of the Covered Bonds and
their liquidity in the secondary market.
Ratings are not a recommendation or suggestion, directly or indirectly, to any
investor or any other person, to buy, sell, make or hold any investment, loan
or security or to undertake any investment strategy with respect to any
investment, loan or security for a particular investor (including without
limitation, any accounting and/or regulatory treatment), or the tax-exempt
nature or taxability of payments made in respect of any investment, loan or
security. A credit rating may be subject to revision, suspension or withdrawal
at any time by the assigning Rating Agency. The Rating Agencies are not
advisors, and nor do the Rating Agencies provide investors or any other party
any financial advice, or any legal, auditing, accounting, appraisal, valuation
or actuarial services. A rating should not be viewed as a replacement for
such advice or services.
Listing and admission to trading:
Application has been made by the Issuer to the FCA for Covered Bonds issued
under the Programme to be admitted to, during the period of 12 months from the
date of this Prospectus, the Official List and to the London Stock Exchange
for such Covered Bonds to be admitted to trading on the main market of the
London Stock Exchange.
The Applicable Pricing Supplement, in the case of Exempt Covered Bonds, will
state whether or not the relevant Exempt Covered Bonds are to be listed and/or
admitted to trading and, if so, on which stock exchanges and/or markets.
Governing Law:
The Programme Agreement and any non-contractual obligations arising out of or
in connection with it are governed by, and will be construed in accordance
with, English law.
The Establishment Deed, the Mortgage Sale Agreement, the Servicing Deed, the
Intercompany Note Subscription Agreement, the Demand Note Subscription
Agreement, the Management Agreement, the Security Deed, the Definitions
Schedule, the Cover Pool Monitor Agreement, the Account Bank Agreement, the
Interest Rate Swap Agreement, each Covered Bond Swap Agreement and the A$
Registry Agreement are governed by, and will be construed in accordance with,
the laws applying in the State of New South Wales, Australia.
The Bond Trust Deed (including the Covered Bond Guarantee), the Principal
Agency Agreement, the Covered Bonds (other than any A$ Registered Covered
Bonds), and the Coupons and any non-contractual obligations arising out of or
in connection with them are governed by, and will be construed in accordance
with, English law unless specifically stated to the contrary. In this
regard, the covenant to pay made by the Issuer to the Bond Trustee in respect
of the A$ Registered Covered Bonds in the Bond Trust Deed, the provisions
relating to the maintenance of the Register in respect of the A$ Registered
Covered Bonds in the Bond Trust Deed and the provisions relating to the
limitation of liability of the Covered Bond Guarantor in the Bond Trust Deed,
the Principal Agency Agreement and the Covered Bonds are governed by, and will
be construed in accordance with, the laws applying in the State of New South
Wales, Australia.
Selling Restrictions:
There are restrictions on the offer, sale and transfer of any Series or
Tranche of Covered Bonds. See the section of this Prospectus entitled
"Subscription and Sale and Transfer and Selling Restrictions" below.
Risk Factors:
There are certain risks related to the issue of Covered Bonds under the
Programme which investors should ensure they fully understand, a summary of
which are set out in the section of this Prospectus entitled "Risk Factors"
and include, inter alia, the risk of subsequent changes in the actual or
perceived creditworthiness of the Issuer or the Covered Bond Guarantor (as
applicable), which may adversely affect the market value of the Covered
Bonds. In addition, there are certain factors which are material for the
purpose of assessing the market risks associated with Covered Bonds issued
under the Programme which include, inter alia, risks related to the structure
of a particular issue of Covered Bonds (including that there is limited
recourse to the Covered Bond Guarantor), modifications and waivers of the
terms and conditions of the Covered Bonds in certain circumstances without the
consent of all of the Covered Bondholders, changes in laws, taxation laws or
regulations which affect the Covered Bonds, risks related to secondary market
trading of the Covered Bonds and exchange rate risks. For further
particulars, see the section of this Prospectus entitled "Risk Factors" below.
Documents Incorporated by Reference
The following documents which have previously been published, or are published simultaneously with this Prospectus, and have been filed with the Financial Conduct Authority and which are available for inspection at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism (https://data.fca.org.uk/%23/nsm/nationalstoragemechanism)
shall be incorporated in, and to form part of, this Prospectus:
(a) BOQ's audited annual consolidated and non-consolidated
financial statements (including the directors' report, the auditor's report
thereon and notes thereto) in respect of the year ended 31 August 2021 (as set
out from page 11 to page 75 and from page 108 to page 194 of the 2021 Annual
Report)
(https://www.boq.com.au/content/dam/boq/files/shareholder-centre/financial-results/2021/annual-report-2021.pdf
(https://www.boq.com.au/content/dam/boq/files/shareholder-centre/financial-results/2021/annual-report-2021.pdf)
);
(b) BOQ's audited annual consolidated and non-consolidated
financial statements (including the directors' report, the auditor's report
thereon and notes thereto) in respect of the year ended 31 August 2022 (as set
out from page 12 to page 70 and from page 106 to page 188 of the 2022 Annual
Report)
(https://www.boq.com.au/content/dam/boq/files/shareholder-centre/financial-results/2022/annual-report-2022.pdf
(https://www.boq.com.au/content/dam/boq/files/shareholder-centre/financial-results/2022/annual-report-2022.pdf)
);
(c) BOQ's financial accounts for the half year ended 28 February
2022 (including the auditor's review report, the consolidated interim
financial statements of BOQ in respect of the half year ended 28 February 2022
and notes thereon) as set out from page 39 to page 65 of the 2022 Half Year
Report
(https://www.boq.com.au/content/dam/boq/files/shareholder-centre/financial-information/boq-interim-report-1h22-report-final.pdf
(https://www.boq.com.au/content/dam/boq/files/shareholder-centre/financial-information/boq-interim-report-1h22-report-final.pdf)
);
(d) BOQ's financial accounts for the half year ended 28 February
2023 (including the auditor's review report, the consolidated interim
financial statements of BOQ in respect of the half year ended 28 February 2023
and notes thereon) as set out from page 33 to page 59 of the 2023 Half Year
Report
(https://www.boq.com.au/content/dam/boq/files/shareholder-centre/financial-information/boq-interim-report-1h23-report-final.pdf
(https://www.boq.com.au/content/dam/boq/files/shareholder-centre/financial-information/boq-interim-report-1h23-report-final.pdf)
);
(e) the audited financial statements of the Trust (including the
auditor's report and the notes thereto) in respect of the year ended 31 August
2021
(https://www.boq.com.au/content/dam/boq/files/shareholder-centre/debt-investor-information/BOQ_Covered_Bond_Trust_Accounts_2021.pdf
(https://www.boq.com.au/content/dam/boq/files/shareholder-centre/debt-investor-information/BOQ_Covered_Bond_Trust_Accounts_2021.pdf)
);
(f) the audited financial statements of the Trust (including the
auditor's report and the notes thereto) in respect of the year ended 31 August
2022
(https://www.boq.com.au/content/dam/boq/files/shareholder-centre/debt-investor-information/boq-covered-bond-trust-accounts-2022.PDF
(https://www.boq.com.au/content/dam/boq/files/shareholder-centre/debt-investor-information/boq-covered-bond-trust-accounts-2022.PDF)
);
(g) the cover pool information as set out on pages 3 to 6
(inclusive) of the BOQ Residential Covered Bond Trust - Monthly Investor
Report for the Collection Period ended 31 March 2023
(https://www.boq.com.au/content/dam/boq/files/shareholder-centre/debt-investor-information/boq-covered-bond-trust-investor-report-20230331.pdf
(https://www.boq.com.au/content/dam/boq/files/shareholder-centre/debt-investor-information/boq-covered-bond-trust-investor-report-20230331.pdf)
); and
(h) the Terms and Conditions of the Covered Bonds contained in
the Prospectuses dated 10 May 2017 on pages 111 to 161 (inclusive)
(https://www.boq.com.au/content/dam/boq/files/shareholder-centre/debt-investor-information/covered-bond-prospectus-may-2017.pdf
(https://www.boq.com.au/content/dam/boq/files/shareholder-centre/debt-investor-information/covered-bond-prospectus-may-2017.pdf)
), dated 21 December 2017 on pages 118 to 168 (inclusive)
(https://www.boq.com.au/content/dam/boq/files/shareholder-centre/debt-investor-information/covered-bond-prospectus-dec-2017.pdf
(https://www.boq.com.au/content/dam/boq/files/shareholder-centre/debt-investor-information/covered-bond-prospectus-dec-2017.pdf)
), dated 13 December 2018 on pages 127 to 177 (inclusive)
(https://www.boq.com.au/content/dam/boq/files/shareholder-centre/debt-investor-information/covered-bond-prospectus-december-2018.pdf
(https://www.boq.com.au/content/dam/boq/files/shareholder-centre/debt-investor-information/covered-bond-prospectus-december-2018.pdf)
), dated 15 April 2020 on pages 126 to 180 (inclusive)
(https://www.boq.com.au/content/dam/boq/files/shareholder-centre/debt-investor-information/boq-cb-programme-update-2020.pdf
(https://www.boq.com.au/content/dam/boq/files/shareholder-centre/debt-investor-information/boq-cb-programme-update-2020.pdf)
), dated 20 April 2021 on pages 132 to 188 (inclusive)
(https://www.boq.com.au/content/dam/boq/files/shareholder-centre/debt-investor-information/BOQ-CB-Prospectus-Programme-Update-2021.pdf
(https://www.boq.com.au/content/dam/boq/files/shareholder-centre/debt-investor-information/BOQ-CB-Prospectus-Programme-Update-2021.pdf)
) and dated 20 April 2022 on pages 138 to 193 (inclusive)
(https://www.boq.com.au/content/dam/boq/files/shareholder-centre/debt-investor-information/boq-cb-programme-2022-update-base-prospectus.pdf),
as prepared by the Issuer in connection with the Programme.
Any documents themselves incorporated by reference in the documents
incorporated by reference in this Prospectus will not form part of this
Prospectus.
The documents to be incorporated by reference herein listed in paragraphs (a)
to (h) above can be viewed online at
https://www.boq.com.au/Shareholder-centre/debt-investor-information/covered-bonds
(https://www.boq.com.au/Shareholder-centre/debt-investor-information/covered-bonds)
.
Any non-incorporated parts of a document referred to herein are either (i) not
considered by the Issuer to be relevant for prospective investors in the
Covered Bonds to be issued under the Programme or (ii) covered elsewhere in
the Prospectus.
Following the publication of this Prospectus a supplement may be prepared by
the Issuer and approved by the FCA in accordance with Article 23 of the
Prospectus Regulation and Article 23 of the UK Prospectus Regulation.
Statements contained in any such supplement (or contained in any document
incorporated by reference therein) shall, to the extent applicable (whether
expressly, by implication or otherwise), be deemed to modify or supersede
statements contained in this Prospectus or in a document which is incorporated
by reference in this Prospectus. Any statement so modified or superseded will
not be deemed, except as so modified or superseded, to constitute a part of
this Prospectus.
The Issuer will, in the event of any significant new factor, material mistake
or inaccuracy relating to information included in this Prospectus which is
capable of affecting the assessment of any Covered Bond, prepare a supplement
to this Prospectus or publish a new Prospectus for use in connection with any
subsequent issue of Covered Bonds.
Form of the Covered Bonds
The Covered Bonds of each Series will be in either bearer form, with or
without interest coupons and/or talons attached, or registered form, without
interest coupons and/or talons attached. All Covered Bonds issued under the
Programme will be issued outside the United States to persons other than U.S.
persons in reliance on Regulation S.
Bearer Covered Bonds
Each Tranche of Bearer Covered Bonds will be initially issued in the form of a
temporary global covered bond without interest coupons attached (a Temporary
Global Covered Bond) which will be delivered on or prior to the issue date of
the relevant Tranche to a common depositary (the Common Depositary) for
Euroclear Bank SA/NV (Euroclear) and Clearstream Banking, S.A. (Clearstream,
Luxembourg).
Bearer Covered Bonds will only be delivered outside the United States and its
possessions.
Whilst any Bearer Covered Bond is represented by a Temporary Global Covered
Bond, payments of principal, interest (if any) and any other amount payable in
respect of the Bearer Covered Bonds due prior to the Exchange Date (as defined
below) will be made (against presentation of the Temporary Global Covered
Bond) only outside the United States and its possessions and to the extent
that certification (in a form to be provided by Euroclear and/or Clearstream,
Luxembourg) to the effect that the beneficial owners of interests in such
Bearer Covered Bond are not U.S. persons or persons who have purchased for
resale to any U.S. person, as required by U.S. Treasury regulations, has been
received by Euroclear and/or Clearstream, Luxembourg and Euroclear and/or
Clearstream, Luxembourg, as applicable, has given a like certification (based
on the certifications it has received) to the Principal Paying Agent.
On and after the date (the Exchange Date) which is 40 days after a Temporary
Global Covered Bond is issued, interests in such Temporary Global Covered Bond
will be exchangeable (free of charge) in whole or in part for, as specified in
the Applicable Final Terms (or, in the case of Exempt Covered Bonds, the
Applicable Pricing Supplement), either (a) interests in a permanent global
covered bond without interest coupons attached (a Permanent Global Covered
Bond and, together with the Temporary Global Covered Bonds, the Bearer Global
Covered Bonds and each a Bearer Global Covered Bond) of the same Series or (b)
security printed Bearer Definitive Covered Bonds of the same Series with,
where applicable, interest coupons and/or talons attached (on the basis that
all the appropriate details have been included on the face of such Bearer
Definitive Covered Bonds and, where applicable, interest coupons and/or talons
and the relevant information supplementing, replacing or modifying the
Conditions appearing in the Applicable Final Terms (or, in the case of Exempt
Covered Bonds, the Applicable Pricing Supplement) has been endorsed or
attached to such Bearer Definitive Covered Bonds), in each case against
certification of beneficial ownership as described above unless such
certification has already been given and upon notice being given by a relevant
Clearing System acting on the instruction of any holder of an interest in the
Temporary Global Covered Bond and subject, in the case of Bearer Definitive
Covered Bonds, to such notice to persons as specified in the Applicable Final
Terms (or, in the case of Exempt Covered Bonds, the Applicable Pricing
Supplement). Purchasers in the United States and certain U.S. persons will
not be able to receive Bearer Definitive Covered Bonds or interests in the
Permanent Global Covered Bond. The holder of a Temporary Global Covered Bond
will not be entitled to collect any payment of interest, principal or other
amount due on or after the Exchange Date unless, upon due certification,
exchange of the Temporary Global Covered Bond for an interest in a Permanent
Global Covered Bond or for Bearer Definitive Covered Bonds is improperly
withheld or refused. Bearer Covered Bonds will be subject to certain
restrictions on transfer set forth therein or will bear a legend regarding
such restrictions.
The option for an issue of Covered Bonds to be represented on issue by a
Permanent Global Covered Bond exchangeable for definitive Covered Bonds should
not be expressed to be applicable in the Applicable Final Terms (or, in the
case of Exempt Covered Bonds, the Applicable Pricing Supplement) if the
Covered Bonds are issued with a minimum Specified Denomination such as
€100,000 (or its equivalent in another currency) plus one or more higher
integral multiples of another smaller amount such as €1,000 (or its
equivalent in another currency).
Payments of principal, interest (if any) or any other amounts on a Permanent
Global Covered Bond will be made outside the United States and its possessions
and through Euroclear and/or Clearstream, Luxembourg against presentation or
surrender (as the case may be) of the Permanent Global Covered Bond without
any requirement for certification.
Interests in a Permanent Global Covered Bond will be exchanged (free of
charge) by the Issuer, in whole but not in part only, at the option of the
holder of such Permanent Global Covered Bond, for Definitive Covered Bonds
and/or (in the case of a Series comprising both Bearer Covered Bonds and
Registered Covered Bonds and if so specified in the Applicable Final Terms
(or, in the case of Exempt Covered Bonds, the Applicable Pricing Supplement))
Registered Covered Bonds: (a) upon not less than 60 days' written notice being
given to the Principal Paying Agent by Euroclear and/or Clearstream,
Luxembourg (acting on the instructions of any holder of an interest in this
Permanent Bearer Global Covered Bond); or (b) upon the occurrence of an
Exchange Event. An Exchange Event means the Issuer has been notified that both
Euroclear and Clearstream, Luxembourg have been closed for business for a
continuous period of fourteen days (other than by reason of holiday, whether
statutory or otherwise) or have announced an intention permanently to cease
business or have in fact done so and no successor clearing system is
available.
The Issuer will promptly give notice to Covered Bondholders of each Series of
Permanent Global Covered Bond in accordance with Condition 13 if an Exchange
Event occurs. In the event of the occurrence of an Exchange Event,
Euroclear, Clearstream, Luxembourg (acting on the instructions of any holder
of an interest in such Permanent Global Covered Bond) or the Bond Trustee may
give notice to the Principal Paying Agent requesting exchange. Any such
exchange must occur not later than 45 days after the date of receipt of the
first relevant notice by the Principal Paying Agent.
Bearer Global Covered Bonds, Bearer Definitive Covered Bonds and any Coupons
or Talons attached thereto will be issued pursuant to the Principal Agency
Agreement.
The following legend will appear on all Bearer Covered Bonds (other than
Temporary Global Covered Bonds) and on all talons and interest coupons
relating to such Bearer Covered Bonds where TEFRA D is specified in the
Applicable Final Terms (or, in the case of Exempt Covered Bonds, the
Applicable Pricing Supplement):
"ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE."
The sections referred to provide that U.S. persons (as defined under the U.S.
Internal Revenue Code of 1986), with certain exceptions, will not be entitled
to deduct any loss on Bearer Covered Bonds, talons or interest coupons and
will not be entitled to capital gains treatment of any gain on any redemption,
payment of principal, sale or other disposition in respect of such Bearer
Covered Bonds, talons or interest coupons.
Covered Bonds which are represented by a Bearer Global Covered Bond will only
be transferable in accordance with the rules and procedures for the time being
of Euroclear or Clearstream, Luxembourg, as the case may be.
Registered Covered Bonds
The Registered Covered Bonds of each Tranche offered and sold in reliance on
Regulation S will initially be represented by a global covered bond in
registered form (a Registered Global Covered Bond). Prior to expiry of the
Distribution Compliance Period (as defined in Regulation S) applicable to each
Tranche of Covered Bonds, beneficial interests in a Registered Global Covered
Bond may not be offered or sold to, or for the account or benefit of, a U.S.
person and may not be held otherwise than through Euroclear or Clearstream,
Luxembourg, and such Registered Global Covered Bond will bear a legend
regarding such restrictions on transfer (see "Subscription and Sale and
Transfer and Selling Restrictions").
Registered Global Covered Bonds will be deposited with the Common Depositary
for Euroclear and Clearstream, Luxembourg and registered in the name of a
common nominee of, Euroclear and Clearstream, Luxembourg, as specified in the
Applicable Final Terms (or, in the case of Exempt Covered Bonds, the
Applicable Pricing Supplement).
Persons holding beneficial interests in Registered Global Covered Bonds will
be entitled or required, as the case may be, under the circumstances described
below, to receive physical delivery of Definitive Covered Bonds in fully
registered form.
Payments of principal, interest and any other amount in respect of the
Registered Global Covered Bonds will, in the absence of any provision to the
contrary, be made to the person shown on the Register as the registered holder
of the Registered Global Covered Bonds. None of the Issuer, the Covered Bond
Guarantor, the Bond Trustee or the Agents will have any responsibility or
liability for any aspect of the records relating to or payments or deliveries
made on account of beneficial ownership interests in the Registered Global
Covered Bonds or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.
Payments of principal, interest or any other amount in respect of the
Registered Covered Bonds in definitive form will, in the absence of any
provision to the contrary, be made to the persons shown on the Register on the
relevant Record Date (as defined in Condition 5(d)) immediately preceding the
due date for payment in the manner provided in that Condition.
Interests in a Registered Global Covered Bond will be exchangeable (free of
charge), in whole but not in part, for Registered Definitive Covered Bonds
without interest coupons or talons attached only upon the occurrence of an
Exchange Event (as defined above). The Issuer will promptly give notice to
Covered Bondholders of each Series of Registered Global Covered Bonds in
accordance with Condition 13 if an Exchange Event occurs. In the event of
the occurrence of an Exchange Event, Euroclear and/or Clearstream, Luxembourg
(acting on the instructions of any registered holder of an interest in such
Registered Global Covered Bond) or the Bond Trustee may give notice to the
Registrar requesting exchange and, in the event of the occurrence of an
Exchange Event as described in (ii) above, the Issuer may also give notice to
the Registrar requesting exchange. Any such exchange must occur not later
than ten days after the date of receipt of the first relevant notice by the
Registrar.
A$ Registered Covered Bonds
The A$ Registered Covered Bonds are issued in registered form by an entry in
the A$ Register maintained by the A$ Registrar.
Entry of the name of the holder in the A$ Register in respect of an A$
Registered Covered Bond constitutes the obtaining or passing of title and is
conclusive evidence that the person so entered is the registered holder of the
A$ Registered Covered Bonds. A$ Registered Covered Bonds which are held in the
Austraclear System will be registered in the name of Austraclear Ltd (ABN 94
002 060 773). No certificate or other evidence of title will be issued to
holders of the A$ Registered Covered Bonds unless the Issuer determines that
certificates should be available or it is required to do so pursuant to any
applicable law or regulation.
Transfer of Interests
Interests in a Registered Global Covered Bond may, subject to compliance with
all applicable restrictions, be transferred to a person who wishes to hold
such interest in another Registered Global Covered Bond. No beneficial owner
of an interest in a Registered Global Covered Bond will be able to transfer
such interest, except in accordance with the applicable procedures of
Euroclear, Clearstream and Luxembourg, in each case to the extent applicable.
Transfers of interests in A$ Registered Covered Bonds held in the Austraclear
System may be conducted only in accordance with the Austraclear Regulations
and the A$ Registry Agreement.
Registered Covered Bonds and A$ Registered Covered Bonds are also subject to
the restrictions on transfer set forth herein and will bear a legend regarding
such restrictions (see "Subscription and Sale and Transfer and Selling
Restrictions").
General
Pursuant to the Principal Agency Agreement (as defined under Conditions of the
Covered Bonds), the Principal Paying Agent will arrange that, where a further
Tranche of Covered Bonds is issued which is intended to form a single Series
with an existing Tranche of Covered Bonds, the Covered Bonds of such further
Tranche will be assigned a common code and ISIN which are different from the
common code and ISIN assigned to Covered Bonds of any other Tranche of the
same Series until at least the expiry of the Distribution Compliance Period
applicable to the Covered Bonds of such Tranche.
Any reference herein to Euroclear, Clearstream, Luxembourg and/or the
Austraclear System will, whenever the context so permits, be deemed to include
a reference to any successor operator and/or successor clearing system and/or
additional or alternative clearing system specified in the Applicable Final
Terms (or, in the case of Exempt Covered Bonds, the Applicable Pricing
Supplement) or as may otherwise be approved by the Issuer, the Principal
Paying Agent and the Bond Trustee.
No Covered Bondholder or Couponholder will be entitled to institute
proceedings directly against the Issuer or the Covered Bond Guarantor or to
take any action with respect to the Bond Trust Deed or to directly enforce the
provisions of any other Programme Document unless the Bond Trustee having
become so bound to proceed, fails so to do within a reasonable period and the
failure will be continuing.
Form of Final Terms in respect of Covered Bonds to be issued under the
Programme
Set out below is the form of Final Terms which, will be completed for each
Tranche of Covered Bonds issued under the Programme which are not Exempt
Covered Bonds and which have a minimum denomination of €100,000 (or its
equivalent in any other currency). Text in this section appearing in italics
does not form part of the Final Terms but denotes directions for completing
the Final Terms.
Date
Bank of Queensland Limited
Issuer Legal Entity Identifier (LEI): 549300WFIN7T02UKDG08
Issue of [Aggregate Nominal Amount of Tranche or
Series] [Title of Covered Bonds]
under the AUD6,000,000,000 BOQ Covered Bond Programme
unconditionally and irrevocably guaranteed as to payments of interest and
principal by
Perpetual Corporate Trust Limited
as trustee of the BOQ Covered Bond Trust (the Trust)
The Covered Bonds described in these Final Terms have not been and will not be
registered under the U.S. Securities Act of 1933, as amended (the Securities
Act), or under any securities laws of any state or other jurisdiction of the
United States and may not be offered or sold in the United States or to, or
for the account or the benefit of, U.S. persons as defined in Regulation S
under the Securities Act (Regulation S) unless an exemption from the
registration requirements of the Securities Act is available and in accordance
with all applicable securities laws of any state of the United States and any
other jurisdiction.
PROHIBITION OF SALES TO EEA RETAIL INVESTORS - The Covered Bonds are not
intended to be offered, sold or otherwise made available to and should not be
offered, sold or otherwise made available to any retail investor in the
European Economic Area (EEA). For these purposes, a retail investor means a
person who is one (or more) of: (i) a retail client as defined in point (11)
of Article 4(1) of Directive 2014/65/EU (as amended, MiFID II); (ii) a
customer within the meaning of Directive (EU) 2016/97 (the Insurance
Distribution Directive), where that customer would not qualify as a
professional client as defined in point (10) of Article 4(1) of MiFID II; or
(iii) not a qualified investor as defined in Regulation (EU) 2017/1129 (the
Prospectus Regulation). Consequently no key information document required by
Regulation (EU) No 1286/2014 (as amended, the PRIIPs Regulation) for offering
or selling the Covered Bonds or otherwise making them available to retail
investors in the EEA has been prepared and therefore offering or selling the
Covered Bonds or otherwise making them available to any retail investor in the
EEA may be unlawful under the PRIIPS Regulation.
PROHIBITION OF SALES TO UK RETAIL INVESTORS - The Covered Bonds are not
intended to be offered, sold or otherwise made available to and should not be
offered, sold or otherwise made available to any retail investor in the United
Kingdom (UK). For these purposes, a retail investor means a person who is one
(or more) of: (i) a retail client, as defined in point (8) of Article 2 of
Regulation (EU) No 2017/565 as it forms part of domestic law by virtue of the
European Union (Withdrawal) Act 2018 (the EUWA); or (ii) a customer within the
meaning of the provisions of the FSMA and any rules or regulations made under
the FSMA to implement Directive (EU) 2016/97, where that customer would not
qualify as a professional client, as defined in point (8) of Article 2(1) of
Regulation (EU) No 600/2014 as it forms part of domestic law by virtue of the
EUWA; or (iii) not a qualified investor as defined in Article 2 of Regulation
(EU) 2017/1129 as it forms part of domestic law by virtue of the EUWA.
Consequently no key information document required by Regulation (EU) No
1286/2014 as it forms part of domestic law by virtue of the EUWA (the UK
PRIIPs Regulation) for offering or selling the Covered Bonds or otherwise
making them available to retail investors in the UK has been prepared and
therefore offering or selling the Covered Bonds or otherwise making them
available to any retail investor in the UK may be unlawful under the UK PRIIPs
Regulation.
[MiFID II PRODUCT GOVERNANCE - Professional investors and ECPs only target
market - Solely for the purposes of the/each manufacturer's product approval
process, the target market assessment in respect of the Covered Bonds has led
to the conclusion that: (i) the target market for the Covered Bonds is
eligible counterparties and professional clients only, each as defined in
MiFID II; and (ii) all channels for distribution of the Covered Bonds to
eligible counterparties and professional clients are appropriate. Any person
subsequently offering, selling or recommending the Covered Bonds (a
distributor) should take into consideration the manufacturer 's/s' target
market assessment; however, a distributor subject to MiFID II is responsible
for undertaking its own target market assessment in respect of the Covered
Bonds (by either adopting or refining the manufacturer 's/s' target market
assessment) and determining appropriate distribution channels.] 1 (#_ftn1)
[UK MiFIR PRODUCT GOVERNANCE - PROFESSIONAL INVESTORS AND ECPS ONLY TARGET
MARKET - Solely for the purposes of the/each manufacturer's product approval
process, the target market assessment in respect of the Covered Bonds has led
to the conclusion that: (i) the target market for the Covered Bonds is only
eligible counterparties, as defined in the FCA Handbook Conduct of Business
Sourcebook (COBS), and professional clients, as defined in Regulation (EU) No
600/2014 as it forms part of domestic law by virtue of the European Union
(Withdrawal) Act 2018 (UK MiFIR); and (ii) all channels for distribution of
the Covered Bonds to eligible counterparties and professional clients are
appropriate. Any person subsequently offering, selling or recommending the
Covered Bonds (a distributor) should take into consideration the
manufacturer 's/s' target market assessment; however, a distributor subject
to the FCA Handbook Product Intervention and Product Governance Sourcebook
(the UK MiFIR Product Governance Rules) is responsible for undertaking its own
target market assessment in respect of the Covered Bonds (by either adopting
or refining the manufacturer 's/s' target market assessment) and determining
appropriate distribution channels.](1)
[NOTIFICATION UNDER SECTION 309B(1)(c)OF THE SFA 2001 OF SINGAPORE (THE SFA) -
[To insert notice if classification of the Covered Bonds is not "capital
markets products other than prescribed capital markets products", pursuant to
Section 309B of the SFA or Specified Investment Products].] 2 (#_ftn2) ]
PART A-CONTRACTUAL TERMS
[Terms used herein will be deemed to be defined as such for the purposes of
the terms and conditions (the Conditions) set forth in the Prospectus dated 24
April 2023 [and the supplement to the Prospectus dated [insert date]]
( together, the Prospectus), which constitute s a base prospectus for the
purposes of the Regulation (EU) 2017/1129 (the Prospectus Regulation) and the
Regulation (EU) 2017/1129 as it forms part of domestic law by virtue of the
EUWA (the UK Prospectus Regulation). This document constitutes the Final Terms
of the Covered Bonds described herein for the purposes of the Prospectus
Regulation and the UK Prospectus Regulation, and must be read in conjunction
with the Prospectus [as so supplemented] in order to obtain all the relevant
information. The Prospectus has been published on the website of the London
Stock Exchange at
https://www.londonstockexchange.com/exchange/news/market-news/market-news-home.html.]
[Terms used herein shall be deemed to be defined as such for the purposes of
the terms and conditions (the Conditions) set forth in the Prospectus dated
l which are incorporated by reference in the Base Prospectus dated l 2023
[and the supplement to the Prospectus dated [insert date]] ( together, the
Prospectus). This document constitutes the Final Terms of the Covered Bonds
described herein for the purposes of Regulation (EU) 2017/1129 (the Prospectus
Regulation) and the Regulation (EU) 2017/1129 as it forms part of domestic law
by virtue of the EUWA (the UK Prospectus Regulation), and must be read in
conjunction with the Prospectus dated l 2023 [and the supplements to the
Prospectus dated l ] which together constitute a base prospectus for the
purposes of the Prospectus Regulation and the UK Prospectus Regulation, in
order to obtain all the relevant information. The Prospectus has been
published on the website of the London Stock Exchange at
https://www.londonstockexchange.com/exchange/news/market-news/market-news-home.html.]
1. Issuer: Bank of Queensland Limited
2. Covered Bond Guarantor: Perpetual Corporate Trust Limited
3. (a) Series of which l
Covered Bonds are to be treated as forming part:
(b) Tranche Number: l
(c) Date on which Covered Bonds will be consolidated and form a [The Covered Bonds will be consolidated and form a single Series with l on
single Series: [the Issue Date]/[exchange of the Temporary Global Covered Bond for interests
in the Permanent Global Covered Bond, as referred to in paragraph l below],
which is expected to occur on or about l ]/[Not Applicable]
4. Specified Currency or Currencies: l
5. Aggregate Nominal Amount of Covered Bonds:
(a) Series: l
(b) Tranche: l
6. Issue Price: l per cent. of the Aggregate Nominal Amount [plus accrued interest from
l ](include in the case of fungible issues only, if applicable)
7. (a) Specified Denominations: l /[€100,000 and integral multiples of €1,000 in excess thereof up to and
including €199,000. No Covered Bonds in definitive form will be issued
with a denomination above €199,000]
(b) Calculation Amount: l
8. (a) Issue Date: l
(b) Interest Commencement Date: For the period from (and including) the Issue Date to (but excluding) the
earlier of (i) the Final Maturity Date; (ii) the date of Conversion of the
Covered Bonds; and (iii) the Conversion Event Date: l /[Issue Date]/[Not
Applicable]
For the period from (and including) the earlier of (i) the Final Maturity
Date; (ii) the date of Conversion of the Covered Bonds; and (iii) the
Conversion Event Date to (but excluding) the Extended Due for Payment Date:
9. Final Maturity Date: [ l /[Interest Payment Date falling in or nearest to l ]
10. Extended Due for Payment Date of Guaranteed Amounts
corresponding to the Final Redemption Amount under the Covered Bond Guarantee:
The earlier of (i) the date which falls 31.5 years after the Final Maturity Date; (ii) the date which falls 31.5 years after the date of Conversion; and (iii) the date which falls 31.5 years after the Conversion Event Date.
11. Interest Basis: For the period from (and including) the Issue Date to (but excluding) the
earlier of (i) the Final Maturity Date; (ii) the date of Conversion of the
Covered Bonds; and (iii) the Conversion Event Date: [Fixed Rate] [Floating
Rate]
If payment of the Guaranteed Amount corresponding to the Final Redemption
Amount is deferred in whole or in part, for the period from (and including)
the earlier of (i) the Final Maturity Date; (ii) the date of Conversion of the
Covered Bonds and (iii) the Conversion Event Date to (but excluding) the
Extended Due for Payment Date: [Fixed Rate] [Floating Rate]
(see paragraphs 17, 18, 19 and 20 below)
12. Redemption/Payment Basis: 99 / 100 / 101 per cent. of the nominal amounts
13. Change of Interest Basis or [Applicable - the Interest Basis will change from l to l in accordance
Redemption/Payment Basis: with paragraph 19 / 20 below on the earlier of (i) the Final Maturity Date;
(ii) the date of Conversion of the Covered Bonds; and (iii) the Conversion
Event Date]/[Not Applicable]
14. Put/Call Options: [Not Applicable]
[Investor Put]
[Issuer Call]
[(see paragraphs 22 and 23 below)]
15. Status of the Covered Bonds: Senior
16. Status of the Covered Bond Guarantee: Senior
PROVISIONS RELATING TO INTEREST (IF ANY) PAYABLE
17. Fixed Rate Covered Bond Provisions: [Applicable from the Interest Commencement Date to the earlier of (i) the
Final Maturity Date; (ii) the date of Conversion of the Covered Bonds; and
(iii) the Conversion Event Date]/[Not Applicable]
(a) Rate (s) of Interest: l per cent. per annum [payable [annually/semi‑annually/quarterly/ l ] in
arrear on each Interest Payment Date
(b) Interest Payment Date(s): l in each year up to and including earlier of (i) the Final Maturity Date;
(ii) the date of Conversion of the Covered Bonds; and (iii) the Conversion
Event Date
(c) Fixed Coupon Amount(s): [ l per Calculation Amount/Not Applicable]
(d) Broken Amount(s): l per Calculation Amount, payable on the Interest Payment Date falling
in/on l /[Not Applicable]
(e) Day Count Fraction: [30/360 or Actual/Actual (ICMA) or RBA Bond Basis/Australian Bond Basis]
(f) Business Day Convention: [Floating Rate Convention/Following Business Day Convention/Modified Following
Business Day Convention/Preceding Business Day Convention]
· Adjusted: [Applicable/Not Applicable]
· Non-Adjusted: [Applicable/Not Applicable]
(g) Additional Business Centres: l
(h) Determination Date(s): l in each year/ [Not Applicable]
18. Floating Rate Covered Bond Provisions: [Applicable from the Interest Commencement Date to the earlier of (i) the
Final Maturity Date; (ii) the date of Conversion of the Covered Bonds; and
(iii) the Conversion Event Date]/[Not Applicable]
(a) Specified Period(s)/Specified Interest Payment Dates: The period from, and including, each Specified Interest Payment Date to, but
excluding, the following Specified Interest Payment Date provided that the
first Specified Period shall be from, and including, the Interest Commencement
Date to, but excluding, the next Specified Interest Payment Date.
l from, but excluding, the Interest Commencement Date to, and including, the
earlier of (i) the date on which the Final Redemption Amount is paid in full;
(ii) the Final Maturity Date; (iii) the date of Conversion of the Covered
Bonds; and (iv) the Conversion Event Date
(b) Business Day Convention: [Floating Rate Convention/Following Business Day Convention/Modified Following
Business Day Convention/ Preceding Business Day Convention]
(c) Additional Business Centre(s): l
(d) Manner in which the Rate of Interest and Interest Amount are [Screen Rate Determination/BBSW Rate Determination]
to be determined:
(e) Party responsible for determining the Rate of Interest l (the Calculation Agent)
and/or calculating the Interest Amount (if not the Principal Paying Agent):
(f) Screen Rate Determination:
· Reference Rate, Relevant Time and Relevant Financial Reference Rate: [ l month l [EURIBOR/HIBOR/CDOR /SIBOR/BKBM/NIBOR]]
Centre: [Compounded Daily SONIA]
Relevant Time: l /[Not Applicable]
Relevant Financial Centre: [London/New York/Brussels/Hong
Kong/Toronto/Sydney/Singapore/Auckland/Oslo/Specify other Relevant Financial
Centre]/[Not Applicable]
· Interest Determination Date(s): l
· Relevant Screen Page: l
(g) SONIA Provisions: [Applicable/Not Applicable]
(If not applicable, delete the remaining subparagraphs of this paragraph)
· Calculation Method: Compounded Daily SONIA Formula
· Observation Method: [Lag/Observation Shift/Not Applicable]
· Lag Lookback Period (p): [5/ l London Banking Days][Not Applicable]
· Observation Shift Period: [5/ l London Banking Days][Not Applicable]
(N.B. When setting the Lag Lookback Period (p) or the Observation Shift
Period, the practicalities of this period should be discussed with the
Principal Paying Agent or, if applicable, such other party responsible for the
calculation of the Rate of Interest, as specified in the applicable Final
Terms. It is anticipated that '(p)' will be no fewer than 5 London Banking
Days unless otherwise agreed with the Principal Paying Agent or, if
applicable/required, such other party responsible for the calculation of the
Rate of Interest, as specified in the applicable Final Terms, in relation to
the relevant issuance)
(h) BBSW Rate Determination: [Applicable/Not Applicable]
BBSW Rate: [As per Condition 4(b)(ii)(A) / Specify]
19. Fixed Rate Covered Bond Provisions: [Applicable if payment of the Guaranteed Amount corresponding to the Final
Redemption Amount is deferred in whole or in part from the earlier of (i) the
Final Maturity Date; (ii) the date of Conversion of the Covered Bonds; and
(iii) the Conversion Event Date]/[Not Applicable]]
(a) Rate (s) of Interest: (i) l per cent. per annum [payable
[annually/semi‑annually/quarterly/ l ] in arrear on each Interest Payment
Date
(ii) [ l per cent. per annum [payable [annually/semi
annually/quarterly/ l ] in arrear on each Interest Payment Date]/[Not
Applicable]
(b) Interest Payment Date(s): l from, but excluding, the earlier of (i) the Final Maturity Date; (ii) the
date of Conversion of the Covered Bonds and (iii) the Conversion Event Date
to, and including, the earlier of (x) the date on which the Final Redemption
Amount is paid in full and (y) the Extended Due for Payment Date
(c) Fixed Coupon Amount(s): (i) [ l per Calculation Amount/Not Applicable]
(ii) [ l per Calculation Amount/Not Applicable]
(d) Broken Amount(s): (i) l per Calculation Amount, payable on the Interest Payment Date falling
in/on l /[Not Applicable]
(ii) l per Calculation Amount, payable on the Interest Payment Date
falling in/on l /[Not Applicable]
(e) Day Count Fraction: [30/360 or Actual/Actual (ICMA) or RBA Bond Basis/Australian Bond Basis]
(f) Business Day Convention: [Floating Rate Convention/Following Business Day Convention/Modified Following
Business Day Convention/Preceding Business Day Convention]
· Adjusted: [Applicable/Not Applicable]
· Non-Adjusted: [Applicable/Not Applicable]
(g) Additional Business Centres: l
(h) Determination Date(s): l in each year/ [Not Applicable]
20. Floating Rate Covered Bond Provisions [Applicable if payment of the Guaranteed Amount corresponding to the Final
Redemption Amount is deferred in whole or in part from the earlier of (i) the
Final Maturity Date; (ii) the date of Conversion of the Covered Bonds and
(iii) the Conversion Event Date]/[Not Applicable]
(a) Specified Period(s)/Specified Interest Payment Dates: The period from, and including, each Specified Interest Payment Date to, but
excluding, the following Specified Interest Payment Date provided that the
first Specified Period shall be from, and including, the earlier of (i) the
Final Maturity Date; (ii) the date of Conversion of the Covered Bonds; and
(iii) the Conversion Event Date to, but excluding, the next Specified Interest
Payment Date.
l from, but excluding, the earlier of (i) the Final Maturity Date; (ii) the
date of Conversion of the Covered Bonds; and (iii) the Conversion Event Date
to, and including, the earlier of (x) the date on which the Final Redemption
Amount is paid in full and (y) the Extended Due for Payment Date
(b) Business Day Convention: [Floating Rate Convention/Following Business Day Convention/Modified Following
Business Day Convention/ Preceding Business Day Convention/specify other]
(c) Additional Business Centre(s): l
(d) Manner in which the Rate of Interest and Interest Amount are [Screen Rate Determination/BBSW Rate Determination]
to be determined:
(e) Party responsible for determining the Rate of Interest l (the Calculation Agent)
and/or calculating the Interest Amount (if not the Principal Paying Agent):
(f) Screen Rate Determination: [Applicable/Not Applicable]
· Reference Rate, Relevant Time and Relevant Financial Reference Rate: l month l EURIBOR/HIBOR/CDOR/SIBOR/BKBM/NIBOR
Centre: [Compounded Daily SONIA]
Relevant Time: l /[Not Applicable]
Relevant Financial Centre: [London/New York/Brussels/Hong
Kong/Toronto/Sydney/Singapore/Auckland/Oslo/Specify other Relevant Financial
Centre]/[Not Applicable]
· Interest Determination Date(s): l
· Relevant Screen Page: l
(g) SONIA Provisions: [Applicable/Not Applicable]
(If not applicable, delete the remaining subparagraphs of this paragraph)
· Calculation Method: Compounded Daily SONIA Formula
· Observation Method: [Lag/Observation Shift/Not Applicable]
· Lag Lookback Period (p): [5/ l London Banking Days][Not Applicable]
· Observation Shift Period: [5/ l London Banking Days][Not Applicable]
(N.B. When setting the Lag Lookback Period (p) or the Observation Shift
Period, the practicalities of this period should be discussed with the
Principal Paying Agent or, if applicable, such other party responsible for the
calculation of the Rate of Interest, as specified in the applicable Final
Terms. It is anticipated that '(p)' will be no fewer than 5 London Banking
Days unless otherwise agreed with the Principal Paying Agent or, if
applicable/required, such other party responsible for the calculation of the
Rate of Interest, as specified in the applicable Final Terms, in relation to
the relevant issuance)
(It is anticipated that Screen Rate Determination will be used on an issue by
issue basis, unless otherwise agreed between the Issuer and the relevant
dealer or the relevant managers on the launch of a particular issue.)
(h) BBSW Rate Determination: [Applicable/Not Applicable]
BBSW Rate: [As per Condition 4(b)(ii)(A) / Specify]
(i) Linear Interpolation: [Not Applicable/Applicable - the Rate of Interest for the long/short
first/last Interest Period shall be calculated using Linear Interpolation]
(j) Margin(s): (i) +/- l per cent. per annum
(ii) [ + l per cent. per annum]/[Not Applicable]
(k) Minimum Rate of Interest: l per cent. per annum
(l) Maximum Rate of Interest: l per cent. per annum
(m) Day Count Fraction: [ Actual/Actual [Actual/Actual (ISDA)]
Actual/365 (Fixed)
Actual/365 (Sterling)
Actual/360
30/360 360/360 [Bond Basis]
30E/360 [Eurobond Basis]
30E/360 (ISDA)]
(n) Interest Amounts Non-Adjusted: [Applicable/Not Applicable]
PROVISIONS RELATING TO REDEMPTION
21. Notice periods for Condition 6(b) (Redemption for tax reasons) Minimum Period: 30 days
or Condition 6(e) (Redemption due to illegality):
Maximum Period: 60 days
22. Issuer Call: [Applicable/Not Applicable]
(a) Optional Redemption Date(s): l
(b) Optional Redemption Amount and method, if any, of [ l per Calculation Amount]
calculation of such amount(s)::
(c) If redeemable in part: [Applicable/Not Applicable]
(i) Minimum Redemption Amount: l
(ii) Maximum Redemption Amount: l
(d) Notice period (if other than as set out in the Conditions): [Not Applicable] [Minimum Period: 5 Business Days] [Maximum Period: 30
Business Days]
23. Investor Put: [Applicable/Not Applicable]
(a) Optional Redemption Date(s): l
(b) Optional Redemption Amount: [ l per Calculation Amount]
(c) Notice period (if other than as set out in the Conditions): Minimum Period: 30 Business Days
Maximum Period: 60 Business Days
24. Final Redemption Amount: [ l per Calculation Amount]
25. Early Redemption Amount payable on redemption for taxation [ l per Calculation Amount/ l ]
reasons or illegality of the Intercompany Note Subscription Agreement or the
Demand Note Subscription Agreement or on event of default and/or the method of
calculating the same (if required or if different from that set out in
Condition 6(f) ):
GENERAL PROVISIONS APPLICABLE TO THE COVERED BONDS
26. Tax gross-up by Issuer in accordance with Condition 7: [Applicable/Not applicable]
27. Bearer Covered Bonds:
Form of Covered Bonds:
[Temporary Bearer Global Covered Bond exchangeable for a Permanent Bearer
Global Covered Bond which is exchangeable for Bearer Definitive Covered Bonds
[on 60 days' notice given at any time/only upon an Exchange Event]
[Temporary Bearer Global Covered Bond exchangeable for Definitive Covered
Bonds]
[Permanent Bearer Global Covered Bond exchangeable for Definitive Covered
Bonds [on 60 days' notice given at any time/only upon an Exchange Event]
[Registered Covered Bonds: [Registered Covered Bonds Restricted/Unrestricted
Global Certificate s ] - Euroclear/Clearstream
[Registered Global Covered Bond registered in the name of [a common depositary
for Euroclear and Clearstream, Luxembourg].] [Registered Global Covered Bond
U.S.$ l nominal amount) registered in the name of the common depositary for
[Euroclear and Clearstream, Luxembourg]]
28. Additional Financial Centre(s) or other special provisions [[Not Applicable]/ l ]
relating to Payment Days:
29. [Yes, as the Covered Bonds have more than 27 coupon payments, Talons may be
required if, on exchange into definitive form, more than 27 coupon payments
are still to be made/No.]
Talons for future Coupons to be attached to Definitive Bearer Covered Bonds:
30. [Reg S Compliance Category 2 ; TEFRA C/TEFRA D/TEFRA not applicable/ l ]
U.S. Selling Restrictions:
The earlier of (i) the date which falls 31.5 years after the Final Maturity Date; (ii) the date which falls 31.5 years after the date of Conversion; and (iii) the date which falls 31.5 years after the Conversion Event Date.
11. Interest Basis:
For the period from (and including) the Issue Date to (but excluding) the
earlier of (i) the Final Maturity Date; (ii) the date of Conversion of the
Covered Bonds; and (iii) the Conversion Event Date: [Fixed Rate] [Floating
Rate]
If payment of the Guaranteed Amount corresponding to the Final Redemption
Amount is deferred in whole or in part, for the period from (and including)
the earlier of (i) the Final Maturity Date; (ii) the date of Conversion of the
Covered Bonds and (iii) the Conversion Event Date to (but excluding) the
Extended Due for Payment Date: [Fixed Rate] [Floating Rate]
(see paragraphs 17, 18, 19 and 20 below)
12. Redemption/Payment Basis:
99 / 100 / 101 per cent. of the nominal amounts
13. Change of Interest Basis or
Redemption/Payment Basis:
[Applicable - the Interest Basis will change from l to l in accordance
with paragraph 19 / 20 below on the earlier of (i) the Final Maturity Date;
(ii) the date of Conversion of the Covered Bonds; and (iii) the Conversion
Event Date]/[Not Applicable]
14. Put/Call Options:
[Not Applicable]
[Investor Put]
[Issuer Call]
[(see paragraphs 22 and 23 below)]
15. Status of the Covered Bonds:
Senior
16. Status of the Covered Bond Guarantee:
Senior
PROVISIONS RELATING TO INTEREST (IF ANY) PAYABLE
17. Fixed Rate Covered Bond Provisions:
[Applicable from the Interest Commencement Date to the earlier of (i) the
Final Maturity Date; (ii) the date of Conversion of the Covered Bonds; and
(iii) the Conversion Event Date]/[Not Applicable]
(a) Rate (s) of Interest:
l per cent. per annum [payable [annually/semi‑annually/quarterly/ l ] in
arrear on each Interest Payment Date
(b) Interest Payment Date(s):
l in each year up to and including earlier of (i) the Final Maturity Date;
(ii) the date of Conversion of the Covered Bonds; and (iii) the Conversion
Event Date
(c) Fixed Coupon Amount(s):
[ l per Calculation Amount/Not Applicable]
(d) Broken Amount(s):
l per Calculation Amount, payable on the Interest Payment Date falling
in/on l /[Not Applicable]
(e) Day Count Fraction:
[30/360 or Actual/Actual (ICMA) or RBA Bond Basis/Australian Bond Basis]
(f) Business Day Convention:
[Floating Rate Convention/Following Business Day Convention/Modified Following
Business Day Convention/Preceding Business Day Convention]
· Adjusted:
[Applicable/Not Applicable]
· Non-Adjusted:
[Applicable/Not Applicable]
(g) Additional Business Centres:
l
(h) Determination Date(s):
l in each year/ [Not Applicable]
18. Floating Rate Covered Bond Provisions:
[Applicable from the Interest Commencement Date to the earlier of (i) the
Final Maturity Date; (ii) the date of Conversion of the Covered Bonds; and
(iii) the Conversion Event Date]/[Not Applicable]
(a) Specified Period(s)/Specified Interest Payment Dates:
The period from, and including, each Specified Interest Payment Date to, but
excluding, the following Specified Interest Payment Date provided that the
first Specified Period shall be from, and including, the Interest Commencement
Date to, but excluding, the next Specified Interest Payment Date.
l from, but excluding, the Interest Commencement Date to, and including, the
earlier of (i) the date on which the Final Redemption Amount is paid in full;
(ii) the Final Maturity Date; (iii) the date of Conversion of the Covered
Bonds; and (iv) the Conversion Event Date
(b) Business Day Convention:
[Floating Rate Convention/Following Business Day Convention/Modified Following
Business Day Convention/ Preceding Business Day Convention]
(c) Additional Business Centre(s):
l
(d) Manner in which the Rate of Interest and Interest Amount are
to be determined:
[Screen Rate Determination/BBSW Rate Determination]
(e) Party responsible for determining the Rate of Interest
and/or calculating the Interest Amount (if not the Principal Paying Agent):
l (the Calculation Agent)
(f) Screen Rate Determination:
· Reference Rate, Relevant Time and Relevant Financial
Centre:
Reference Rate: [ l month l [EURIBOR/HIBOR/CDOR /SIBOR/BKBM/NIBOR]]
[Compounded Daily SONIA]
Relevant Time: l /[Not Applicable]
Relevant Financial Centre: [London/New York/Brussels/Hong
Kong/Toronto/Sydney/Singapore/Auckland/Oslo/Specify other Relevant Financial
Centre]/[Not Applicable]
· Interest Determination Date(s):
l
· Relevant Screen Page:
l
(g) SONIA Provisions:
[Applicable/Not Applicable]
(If not applicable, delete the remaining subparagraphs of this paragraph)
· Calculation Method:
Compounded Daily SONIA Formula
· Observation Method:
[Lag/Observation Shift/Not Applicable]
· Lag Lookback Period (p):
[5/ l London Banking Days][Not Applicable]
· Observation Shift Period:
[5/ l London Banking Days][Not Applicable]
(N.B. When setting the Lag Lookback Period (p) or the Observation Shift
Period, the practicalities of this period should be discussed with the
Principal Paying Agent or, if applicable, such other party responsible for the
calculation of the Rate of Interest, as specified in the applicable Final
Terms. It is anticipated that '(p)' will be no fewer than 5 London Banking
Days unless otherwise agreed with the Principal Paying Agent or, if
applicable/required, such other party responsible for the calculation of the
Rate of Interest, as specified in the applicable Final Terms, in relation to
the relevant issuance)
(h) BBSW Rate Determination:
[Applicable/Not Applicable]
BBSW Rate:
[As per Condition 4(b)(ii)(A) / Specify]
19. Fixed Rate Covered Bond Provisions:
[Applicable if payment of the Guaranteed Amount corresponding to the Final
Redemption Amount is deferred in whole or in part from the earlier of (i) the
Final Maturity Date; (ii) the date of Conversion of the Covered Bonds; and
(iii) the Conversion Event Date]/[Not Applicable]]
(a) Rate (s) of Interest:
(i) l per cent. per annum [payable
[annually/semi‑annually/quarterly/ l ] in arrear on each Interest Payment
Date
(ii) [ l per cent. per annum [payable [annually/semi
annually/quarterly/ l ] in arrear on each Interest Payment Date]/[Not
Applicable]
(b) Interest Payment Date(s):
l from, but excluding, the earlier of (i) the Final Maturity Date; (ii) the
date of Conversion of the Covered Bonds and (iii) the Conversion Event Date
to, and including, the earlier of (x) the date on which the Final Redemption
Amount is paid in full and (y) the Extended Due for Payment Date
(c) Fixed Coupon Amount(s):
(i) [ l per Calculation Amount/Not Applicable]
(ii) [ l per Calculation Amount/Not Applicable]
(d) Broken Amount(s):
(i) l per Calculation Amount, payable on the Interest Payment Date falling
in/on l /[Not Applicable]
(ii) l per Calculation Amount, payable on the Interest Payment Date
falling in/on l /[Not Applicable]
(e) Day Count Fraction:
[30/360 or Actual/Actual (ICMA) or RBA Bond Basis/Australian Bond Basis]
(f) Business Day Convention:
[Floating Rate Convention/Following Business Day Convention/Modified Following
Business Day Convention/Preceding Business Day Convention]
· Adjusted:
[Applicable/Not Applicable]
· Non-Adjusted:
[Applicable/Not Applicable]
(g) Additional Business Centres:
l
(h) Determination Date(s):
l in each year/ [Not Applicable]
20. Floating Rate Covered Bond Provisions
[Applicable if payment of the Guaranteed Amount corresponding to the Final
Redemption Amount is deferred in whole or in part from the earlier of (i) the
Final Maturity Date; (ii) the date of Conversion of the Covered Bonds and
(iii) the Conversion Event Date]/[Not Applicable]
(a) Specified Period(s)/Specified Interest Payment Dates:
The period from, and including, each Specified Interest Payment Date to, but
excluding, the following Specified Interest Payment Date provided that the
first Specified Period shall be from, and including, the earlier of (i) the
Final Maturity Date; (ii) the date of Conversion of the Covered Bonds; and
(iii) the Conversion Event Date to, but excluding, the next Specified Interest
Payment Date.
l from, but excluding, the earlier of (i) the Final Maturity Date; (ii) the
date of Conversion of the Covered Bonds; and (iii) the Conversion Event Date
to, and including, the earlier of (x) the date on which the Final Redemption
Amount is paid in full and (y) the Extended Due for Payment Date
(b) Business Day Convention:
[Floating Rate Convention/Following Business Day Convention/Modified Following
Business Day Convention/ Preceding Business Day Convention/specify other]
(c) Additional Business Centre(s):
l
(d) Manner in which the Rate of Interest and Interest Amount are
to be determined:
[Screen Rate Determination/BBSW Rate Determination]
(e) Party responsible for determining the Rate of Interest
and/or calculating the Interest Amount (if not the Principal Paying Agent):
l (the Calculation Agent)
(f) Screen Rate Determination:
[Applicable/Not Applicable]
· Reference Rate, Relevant Time and Relevant Financial
Centre:
Reference Rate: l month l EURIBOR/HIBOR/CDOR/SIBOR/BKBM/NIBOR
[Compounded Daily SONIA]
Relevant Time: l /[Not Applicable]
Relevant Financial Centre: [London/New York/Brussels/Hong
Kong/Toronto/Sydney/Singapore/Auckland/Oslo/Specify other Relevant Financial
Centre]/[Not Applicable]
· Interest Determination Date(s):
l
· Relevant Screen Page:
l
(g) SONIA Provisions:
[Applicable/Not Applicable]
(If not applicable, delete the remaining subparagraphs of this paragraph)
· Calculation Method:
Compounded Daily SONIA Formula
· Observation Method:
[Lag/Observation Shift/Not Applicable]
· Lag Lookback Period (p):
[5/ l London Banking Days][Not Applicable]
· Observation Shift Period:
[5/ l London Banking Days][Not Applicable]
(N.B. When setting the Lag Lookback Period (p) or the Observation Shift
Period, the practicalities of this period should be discussed with the
Principal Paying Agent or, if applicable, such other party responsible for the
calculation of the Rate of Interest, as specified in the applicable Final
Terms. It is anticipated that '(p)' will be no fewer than 5 London Banking
Days unless otherwise agreed with the Principal Paying Agent or, if
applicable/required, such other party responsible for the calculation of the
Rate of Interest, as specified in the applicable Final Terms, in relation to
the relevant issuance)
(It is anticipated that Screen Rate Determination will be used on an issue by
issue basis, unless otherwise agreed between the Issuer and the relevant
dealer or the relevant managers on the launch of a particular issue.)
(h) BBSW Rate Determination:
[Applicable/Not Applicable]
BBSW Rate:
[As per Condition 4(b)(ii)(A) / Specify]
(i) Linear Interpolation:
[Not Applicable/Applicable - the Rate of Interest for the long/short
first/last Interest Period shall be calculated using Linear Interpolation]
(j) Margin(s):
(i) +/- l per cent. per annum
(ii) [ + l per cent. per annum]/[Not Applicable]
(k) Minimum Rate of Interest:
l per cent. per annum
(l) Maximum Rate of Interest:
l per cent. per annum
(m) Day Count Fraction:
[ Actual/Actual [Actual/Actual (ISDA)]
Actual/365 (Fixed)
Actual/365 (Sterling)
Actual/360
30/360 360/360 [Bond Basis]
30E/360 [Eurobond Basis]
30E/360 (ISDA)]
(n) Interest Amounts Non-Adjusted:
[Applicable/Not Applicable]
PROVISIONS RELATING TO REDEMPTION
21. Notice periods for Condition 6(b) (Redemption for tax reasons)
or Condition 6(e) (Redemption due to illegality):
Minimum Period: 30 days
Maximum Period: 60 days
22. Issuer Call:
[Applicable/Not Applicable]
(a) Optional Redemption Date(s):
l
(b) Optional Redemption Amount and method, if any, of
calculation of such amount(s)::
[ l per Calculation Amount]
(c) If redeemable in part:
[Applicable/Not Applicable]
(i) Minimum Redemption Amount:
l
(ii) Maximum Redemption Amount:
l
(d) Notice period (if other than as set out in the Conditions):
[Not Applicable] [Minimum Period: 5 Business Days] [Maximum Period: 30
Business Days]
23. Investor Put:
[Applicable/Not Applicable]
(a) Optional Redemption Date(s):
l
(b) Optional Redemption Amount:
[ l per Calculation Amount]
(c) Notice period (if other than as set out in the Conditions):
Minimum Period: 30 Business Days
Maximum Period: 60 Business Days
24. Final Redemption Amount:
[ l per Calculation Amount]
25. Early Redemption Amount payable on redemption for taxation
reasons or illegality of the Intercompany Note Subscription Agreement or the
Demand Note Subscription Agreement or on event of default and/or the method of
calculating the same (if required or if different from that set out in
Condition 6(f) ):
[ l per Calculation Amount/ l ]
GENERAL PROVISIONS APPLICABLE TO THE COVERED BONDS
26. Tax gross-up by Issuer in accordance with Condition 7:
[Applicable/Not applicable]
27.
Form of Covered Bonds:
Bearer Covered Bonds:
[Temporary Bearer Global Covered Bond exchangeable for a Permanent Bearer
Global Covered Bond which is exchangeable for Bearer Definitive Covered Bonds
[on 60 days' notice given at any time/only upon an Exchange Event]
[Temporary Bearer Global Covered Bond exchangeable for Definitive Covered
Bonds]
[Permanent Bearer Global Covered Bond exchangeable for Definitive Covered
Bonds [on 60 days' notice given at any time/only upon an Exchange Event]
[Registered Covered Bonds: [Registered Covered Bonds Restricted/Unrestricted
Global Certificate s ] - Euroclear/Clearstream
[Registered Global Covered Bond registered in the name of [a common depositary
for Euroclear and Clearstream, Luxembourg].] [Registered Global Covered Bond
U.S.$ l nominal amount) registered in the name of the common depositary for
[Euroclear and Clearstream, Luxembourg]]
28. Additional Financial Centre(s) or other special provisions
relating to Payment Days:
[[Not Applicable]/ l ]
29.
Talons for future Coupons to be attached to Definitive Bearer Covered Bonds:
[Yes, as the Covered Bonds have more than 27 coupon payments, Talons may be
required if, on exchange into definitive form, more than 27 coupon payments
are still to be made/No.]
30.
U.S. Selling Restrictions:
[Reg S Compliance Category 2 ; TEFRA C/TEFRA D/TEFRA not applicable/ l ]
[PURPOSE OF FINAL TERMS
This Final Terms comprises the Final Terms required for issue and [admission to trading on l] of the Covered Bonds described herein] pursuant to the A$6,000,000,000 BOQ Covered Bond Programme of the Bank of Queensland Limited.]
RESPONSIBILITY
[The information contained in] l has been extracted from [the following source] l . The Issuer confirms that such information has been accurately reproduced and that, so far as it is aware and is able to ascertain from information published by l , no facts have been omitted which would render the reproduced information inaccurate or misleading].
Signed on behalf of Bank of Queensland Limited:
By:…………………………………………………
Duly authorised
Signed on behalf of Perpetual Corporate Trust Limited
in its capacity as trustee of the BOQ Covered Bond Trust:
By:
……………………………………………………
Duly authorised
PART B-OTHER INFORMATION
1. LISTING AND ADMISSION TO TRADING
(i) Application for admission to the Official List and for admission to trading
[has been/is expected to be] made to the London Stock Exchange's main market
Listing and admission to trading:
[Date from which admission effective l ]
(ii) l
Estimate of total expenses related to admission to trading:
Listing and admission to trading:
Application for admission to the Official List and for admission to trading
[has been/is expected to be] made to the London Stock Exchange's main market
[Date from which admission effective l ]
(ii)
Estimate of total expenses related to admission to trading:
l
2. RATINGS
[The Covered Bonds to be issued have not been rated by any rating agency]
[[The Covered Bonds to be issued [[have been]/[are expected to be]] rated
[insert rating] by [Moody's Investors Service Pty Limited (Moody's) and /
Fitch Australia Pty. Ltd. (Fitch).] [Each of] Moody's and / Fitch is
established outside the European Economic Area and the United Kingdom and has
Ratings: not applied for registration under the Regulation (EC) No. 1060/2009 (as
amended) (the CRA Regulation) or Regulation (EC) No. 1060/2009 as it forms
part of United Kingdom domestic law by virtue of the European Union
(Withdrawal) Act 2018 (the UK CRA Regulation). [Ratings by Moody's are
endorsed by Moody's Deutschland GmbH and Moody's Investors Services Ltd.
and / ratings by Fitch are endorsed by Fitch Ratings Ireland Limited and
Fitch Ratings Limited, each of which is a credit rating agency established in
the European Economic Area and registered under the CRA Regulation or
established in the United Kingdom and registered under the UK CRA Regulation,
respectively, each in accordance with the CRA Regulation or the UK CRA
Regulation, as applicable.]
[Need to include a brief explanation of the meaning of the ratings if this has
been previously published by the rating provider. Consider including the
following (to be completed at the time of the relevant issuance):
[[Moody's Investors Service] has, in its [month, year] publication "[Rating
Symbols and Definitions]", described a credit rating of 'Aa' in the
following terms: ["Obligations rated Aa are judged to be of high quality and
are subject to very low credit risk … Note: Moody's appends numerical
modifiers 1, 2, and 3 to each generic rating classification from Aa through
Caa. The modifier 1 indicates that the obligation ranks in the higher end of
its generic rating category; the modifier 2 indicates a mid-range ranking; and
the modifier 3 indicates a ranking in the lower end of that generic rating
category.".]] [Complete as applicable].
[[Fitch Ratings] has, in its [month, year] publication "[Fitch Ratings
Definitions]", described a [long term] credit rating of 'AA' in the
following terms: ["'AA' ratings denote expectations of very low default risk.
They indicate very strong capacity for payment of financial commitments. This
capacity is not significantly vulnerable to foreseeable events. Note: Within
rating categories, Fitch may use modifiers. The modifiers "+" or "-" may be
appended to a rating to denote relative status within major rating
categories."]] [Complete as applicable]]]
Ratings:
[The Covered Bonds to be issued have not been rated by any rating agency]
[[The Covered Bonds to be issued [[have been]/[are expected to be]] rated
[insert rating] by [Moody's Investors Service Pty Limited (Moody's) and /
Fitch Australia Pty. Ltd. (Fitch).] [Each of] Moody's and / Fitch is
established outside the European Economic Area and the United Kingdom and has
not applied for registration under the Regulation (EC) No. 1060/2009 (as
amended) (the CRA Regulation) or Regulation (EC) No. 1060/2009 as it forms
part of United Kingdom domestic law by virtue of the European Union
(Withdrawal) Act 2018 (the UK CRA Regulation). [Ratings by Moody's are
endorsed by Moody's Deutschland GmbH and Moody's Investors Services Ltd.
and / ratings by Fitch are endorsed by Fitch Ratings Ireland Limited and
Fitch Ratings Limited, each of which is a credit rating agency established in
the European Economic Area and registered under the CRA Regulation or
established in the United Kingdom and registered under the UK CRA Regulation,
respectively, each in accordance with the CRA Regulation or the UK CRA
Regulation, as applicable.]
[Need to include a brief explanation of the meaning of the ratings if this has
been previously published by the rating provider. Consider including the
following (to be completed at the time of the relevant issuance):
[[Moody's Investors Service] has, in its [month, year] publication "[Rating
Symbols and Definitions]", described a credit rating of 'Aa' in the
following terms: ["Obligations rated Aa are judged to be of high quality and
are subject to very low credit risk … Note: Moody's appends numerical
modifiers 1, 2, and 3 to each generic rating classification from Aa through
Caa. The modifier 1 indicates that the obligation ranks in the higher end of
its generic rating category; the modifier 2 indicates a mid-range ranking; and
the modifier 3 indicates a ranking in the lower end of that generic rating
category.".]] [Complete as applicable].
[[Fitch Ratings] has, in its [month, year] publication "[Fitch Ratings
Definitions]", described a [long term] credit rating of 'AA' in the
following terms: ["'AA' ratings denote expectations of very low default risk.
They indicate very strong capacity for payment of financial commitments. This
capacity is not significantly vulnerable to foreseeable events. Note: Within
rating categories, Fitch may use modifiers. The modifiers "+" or "-" may be
appended to a rating to denote relative status within major rating
categories."]] [Complete as applicable]]]
3.
INTERESTS OF NATURAL AND LEGAL PERSONS INVOLVED IN THE ISSUE
[Save for any fees payable to the Managers, so far as the Issuer is aware, no
person involved in the issue of the Covered Bonds has an interest material to
the offer. The Managers and their affiliates have engaged, and may in future
engage in investment banking and/or commercial banking transactions with, and
may perform other services for, the Issuer, the Covered Bond Guarantor and
their affiliates]
4. YIELD (Fixed Rate Covered Bonds only)
Indication of yield: l
The yield is calculated at the Issue Date on the basis of the Issue Price. It
is not an indication of future yield.
5. OPERATIONAL INFORMATION
(a) l
ISIN:
(b) Common Code: l
(c) CFI: [[See/[ ], as updated, as set out on] the website of the Association of
National Numbering Agencies (ANNA) or alternatively sourced from the
responsible National Numbering Agency that assigned the ISIN/Not
Applicable/Not Available]
(d) FISN: [[See/[ ], as updated, as set out on] the website of the Association of
National Numbering Agencies (ANNA) or alternatively sourced from the
responsible National Numbering Agency that assigned the ISIN/Not
Applicable/Not Available]
(N.B. if the CFI and/or the FISN is not required, requested or available,
it/they should be specified to be "Not Applicable")
(e) [[Not Applicable]/ l ]
Any clearing system(s) other than
Euroclear Bank S.A./N.V., Clearstream Banking, S.A. and
the relevant identification number(s):
(f) Delivery: Delivery [against/free of] payment
(g) l
Name(s) and address(es) of initial Paying Agent(s) in relation to the Covered Bonds:
(h) l
Name(s) and address(es) of additional Paying Agent(s) (if any) in relation to the Covered Bonds:
(i) Relevant Benchmark s : [Not Applicable]/[ l is provided by l ].
[As at the date hereof, [ l appears in the register of administrators and
benchmarks established and maintained by the European Securities and Markets
Authority pursuant to the Benchmarks Regulation.]
[As at the date hereof, [ l appears in the FCA's register of administrators
under Article 36 of the UK Benchmarks Regulation.]
[As at the date hereof, [ l does not appear in the register of administrators
and benchmarks established and maintained by [the European Securities and
Markets Authority][the FCA] pursuant to Article 36 of [the Benchmarks
Regulation][the UK Benchmarks Regulation]. [As far as the Issuer is aware, as
at the date hereof, Article 2 of [the Benchmarks Regulation][the UK Benchmarks
Regulation] applies, such that l is not currently required to obtain
authorisation/registration (or, if located outside the [European Union][United
Kingdom], recognition, endorsement or equivalence).]/[ l does not fall within
the scope of [the Benchmarks Regulation][the UK Benchmarks Regulation].]].
ISIN:
l
(b) Common Code:
l
(c) CFI:
[[See/[ ], as updated, as set out on] the website of the Association of
National Numbering Agencies (ANNA) or alternatively sourced from the
responsible National Numbering Agency that assigned the ISIN/Not
Applicable/Not Available]
(d) FISN:
[[See/[ ], as updated, as set out on] the website of the Association of
National Numbering Agencies (ANNA) or alternatively sourced from the
responsible National Numbering Agency that assigned the ISIN/Not
Applicable/Not Available]
(N.B. if the CFI and/or the FISN is not required, requested or available,
it/they should be specified to be "Not Applicable")
(e)
Any clearing system(s) other than
Euroclear Bank S.A./N.V., Clearstream Banking, S.A. and
the relevant identification number(s):
[[Not Applicable]/ l ]
(f) Delivery:
Delivery [against/free of] payment
(g)
Name(s) and address(es) of initial Paying Agent(s) in relation to the Covered Bonds:
l
(h)
Name(s) and address(es) of additional Paying Agent(s) (if any) in relation to the Covered Bonds:
l
(i) Relevant Benchmark s :
[Not Applicable]/[ l is provided by l ].
[As at the date hereof, [ l appears in the register of administrators and
benchmarks established and maintained by the European Securities and Markets
Authority pursuant to the Benchmarks Regulation.]
[As at the date hereof, [ l appears in the FCA's register of administrators
under Article 36 of the UK Benchmarks Regulation.]
[As at the date hereof, [ l does not appear in the register of administrators
and benchmarks established and maintained by [the European Securities and
Markets Authority][the FCA] pursuant to Article 36 of [the Benchmarks
Regulation][the UK Benchmarks Regulation]. [As far as the Issuer is aware, as
at the date hereof, Article 2 of [the Benchmarks Regulation][the UK Benchmarks
Regulation] applies, such that l is not currently required to obtain
authorisation/registration (or, if located outside the [European Union][United
Kingdom], recognition, endorsement or equivalence).]/[ l does not fall within
the scope of [the Benchmarks Regulation][the UK Benchmarks Regulation].]].
Form of Pricing Supplement in respect of Exempt Covered Bonds to be issued
under the Programme
Set out below is the form of Pricing Supplement which, will be completed for
each Tranche of Exempt Covered Bonds issued under the Programme, including A$
Registered Covered Bonds.
NO PROSPECTUS IS REQUIRED IN ACCORDANCE WITH REGULATION (EU) 2017/1129 OR
REGULATION (EU) 2017/1129 (AS IT FORMS PART OF DOMESTIC LAW BY VIRTUE OF THE
EUROPEAN UNION (WITHDRAWAL) ACT 2018 FOR THE ISSUE OF COVERED BONDS DESCRIBED
BELOW. THE FCA HAS NEITHER APPROVED NOR REVIEWED THE INFORMATION CONTAINED IN
THIS PRICING SUPPLEMENT.
Date
Bank of Queensland Limited
Issuer Legal Entity Identifier (LEI):
549300WFIN7T02UKDG08
Issue of [Aggregate Nominal Amount of Tranche or
Series] [Title of Covered Bonds]
under the AUD6,000,000,000 BOQ Covered Bond Programme
unconditionally and irrevocably guaranteed as to payments of interest and
principal by
Perpetual Corporate Trust Limited
as trustee of the BOQ Covered Bond Trust (the Trust)
The Covered Bonds described in this Pricing Supplement have not been and will
not be registered under the U.S. Securities Act of 1933, as amended (the
Securities Act), or under any securities laws of any state or other
jurisdiction of the United States and may not be offered or sold in the United
States or to, or for the account or the benefit of, U.S. persons as defined in
Regulation S under the Securities Act (Regulation S) unless an exemption from
the registration requirements of the Securities Act is available and in
accordance with all applicable securities laws of any state of the United
States and any other jurisdiction.
PROHIBITION OF SALES TO EEA RETAIL INVESTORS - The Covered Bonds are not
intended to be offered, sold or otherwise made available to and should not be
offered, sold or otherwise made available to any retail investor in the
European Economic Area (EEA). For these purposes, a retail investor means a
person who is one (or more) of: (i) a retail client as defined in point (11)
of Article 4(1) of Directive 2014/65/EU (as amended, MiFID II); (ii) a
customer within the meaning of (EU) 2016/97 (the Insurance Distribution
Directive), where that customer would not qualify as a professional client as
defined in point (10) of Article 4(1) of MiFID II; or (iii) not a qualified
investor as defined in Regulation (EU) 2017/1129 (the Prospectus Regulation).
Consequently no key information document required by Regulation (EU) No
1286/2014 (as amended, the PRIIPs Regulation) for offering or selling the
Covered Bonds or otherwise making them available to retail investors in the
EEA has been prepared and therefore offering or selling the Covered Bonds or
otherwise making them available to any retail investor in the EEA may be
unlawful under the PRIIPS Regulation.
PROHIBITION OF SALES TO UK RETAIL INVESTORS - The Covered Bonds are not
intended to be offered, sold or otherwise made available to and should not be
offered, sold or otherwise made available to any retail investor in the United
Kingdom (UK). For these purposes, a retail investor means a person who is one
(or more) of: (i) a retail client, as defined in point (8) of Article 2 of
Regulation (EU) No 2017/565 as it forms part of domestic law by virtue of the
European Union (Withdrawal) Act 2018 (EUWA); (ii) a customer within the
meaning of the provisions of the FSMA and any rules or regulations made under
the FSMA to implement Directive (EU) 2016/97, where that customer would not
qualify as a professional client, as defined in point (8) of Article 2(1) of
Regulation (EU) No 600/2014 as it forms part of domestic law by virtue of the
EUWA; or (iii) not a qualified investor as defined in Article 2 of Regulation
(EU) 2017/1129 as it forms part of domestic law by virtue of the EUWA42.
Consequently no key information document required by Regulation (EU) No
1286/2014 as it forms part of domestic law by virtue of the EUWA (the UK
PRIIPs Regulation) for offering or selling the Covered Bonds or otherwise
making them available to retail investors in the UK has been prepared and
therefore offering or selling the Covered Bonds or otherwise making them
available to any retail investor in the UK may be unlawful under the UK PRIIPs
Regulation.
[MIFID II product governance / target market - Solely for the purposes of
the/each manufacturer's product approval process, the target market
assessment in respect of the Covered Bonds has led to the conclusion that: (i)
the target market for the Covered Bonds is eligible counterparties and
professional clients only, each as defined in MiFID II; and (ii) all channels
for distribution of the Covered Bonds to eligible counterparties and
professional clients are appropriate. Any person subsequently offering,
selling or recommending the Covered Bonds (a distributor) should take into
consideration the manufacturer 's/s' target market assessment; however, a
distributor subject to MiFID II is responsible for undertaking its own target
market assessment in respect of the Covered Bonds (by either adopting or
refining the manufacturer 's/s' target market assessment) and determining
appropriate distribution channels.] 3 (#_ftn3)
[UK MiFIR PRODUCT GOVERNANCE - TARGET MARKET - Solely for the purposes of
the/each manufacturer's product approval process, the target market
assessment in respect of the Covered Bonds has led to the conclusion that: (i)
the target market for the Covered Bonds is only eligible counterparties, as
defined in the FCA Handbook Conduct of Business Sourcebook (COBS), and
professional clients, as defined in Regulation (EU) No 600/2014 as it forms
part of domestic law by virtue of the European Union (Withdrawal) Act 2018 (UK
MiFIR); and (ii) all channels for distribution of the Covered Bonds to
eligible counterparties and professional clients are appropriate. Any person
subsequently offering, selling or recommending the Covered Bonds (a
distributor) should take into consideration the manufacturer 's/s' target
market assessment; however, a distributor subject to the FCA Handbook Product
Intervention and Product Governance Sourcebook (the UK MiFIR Product
Governance Rules) is responsible for undertaking its own target market
assessment in respect of the Covered Bonds (by either adopting or refining the
manufacturer 's/s' target market assessment) and determining appropriate
distribution channels.](5)
[NOTIFICATION UNDER SECTION 309B(1)(c)OF THE SFA 2001 (2020 REVISED EDITION)
OF SINGAPORE (THE SFA) - [To insert notice if classification of the Covered
Bonds is not "capital markets products other than prescribed capital markets
products", pursuant to Section 309B of the SFA or Specified Investment
Products].] 4 (#_ftn4) ]
PART A - CONTRACTUAL TERMS
[Terms used herein will be deemed to be defined as such for the purposes of
the terms and conditions (the Conditions) set forth in the Prospectus dated 24
April 2023 [and the supplement to the Prospectus dated [insert date]]
( together, the Prospectus). This document constitutes the Pricing Supplement
of the Covered Bonds described herein (Covered Bonds) and must be read in
conjunction with the Prospectus [as so supplemented]. Full information on the
Issuer and the Covered Bond Guarantor and the offer of the Covered Bonds is
only available on the basis of the combination of this Pricing Supplement and
the Prospectus [as so supplemented]. Copies of the Prospectus [and supplement
to the Prospectus s ] are available for viewing, free of charge, at address
and website and copies may be obtained, free of charge, from address .
1. Issuer: Bank of Queensland Limited
2. Covered Bond Guarantor: Perpetual Corporate Trust Limited
3. (a) Series of which Covered Bonds are to be l
treated as forming part:
(b) Tranche Number: l
(c) Date on which Covered Bonds will be consolidated and form a [The Covered Bonds will be consolidated and form a single Series with l on
single Series: [the Issue Date]/[exchange of the Temporary Global Covered Bond for interests
in the Permanent Global Covered Bond, as referred to in paragraph l below],
which is expected to occur on or about l ]/[Not Applicable]
4. Specified Currency or Currencies: l
5. Aggregate Nominal Amount of Covered Bonds:
(a) Series: l
(b) Tranche: l
6. Issue Price: l per cent. of the Aggregate Nominal Amount [plus accrued interest from l ].
7. (a) Specified Denominations: l /[€100,000 and integral multiples of €1,000 in excess thereof up to and
including €199,000. No Covered Bonds in definitive form will be issued
with a denomination above €199,000].
(b) Calculation Amount: l
8. (a) Issue Date: l
(b) Interest Commencement Date: For the period from (and including) the Issue Date to (but excluding) the
earlier of (i) the Final Maturity Date; (ii) the date of Conversion of the
Covered Bonds; and (iii) the Conversion Event Date: l /[Issue Date]/[Not
Applicable]
For the period from (and including) the earlier of (i) the Final Maturity
Date; (ii) the date of Conversion of the Covered Bonds; and (iii) the
Conversion Event Date to (but excluding) the Extended Due for Payment Date:
9. Final Maturity Date: [ l /[Interest Payment Date falling in or nearest to l ]
10. Extended Due for Payment Date of Guaranteed Amounts The earlier of (i) the date which falls 31.5 years after the Final Maturity
corresponding to the Final Redemption Amount under the Covered Bond Guarantee: Date; (ii) the date which falls 31.5 years after the date of Conversion of the
Covered Bonds; and (iii) the date which falls 31.5 years after the Conversion
Event Date.
11. Interest Basis: For the period from (and including) the Issue Date to (but excluding) the
earlier of (i) the Final Maturity Date; (ii) the date of Conversion of the
Covered Bonds; and (iii) the Conversion Event Date: [Fixed Rate] [Floating
Rate]
If payment of the Guaranteed Amount corresponding to the Final Redemption
Amount is deferred in whole or in part, for the period from (and including)
the earlier of (i) the Final Maturity Date; (ii) the date of Conversion of the
Covered Bonds; and (iii) the Conversion Event Date to (but excluding) the
Extended Due for Payment Date: [Fixed Rate] [Floating Rate]
(see paragraphs 17, 18, 19 and 20 below)
12. Redemption/Payment Basis: 99 / 100 / 101 /[specify other] per cent. of the nominal amounts
13. Change of Interest Basis or [Applicable - the Interest Basis will change from l to l in accordance
Redemption/Payment Basis: with paragraph 19 / 20 below on the earlier of (i) the Final Maturity Date;
(ii) the date of Conversion of the Covered Bonds; and (iii) the Conversion
Event Date]/[Not Applicable]
14. Put/Call Options: [Not Applicable]
[Investor Put]
[Issuer Call]
[(see paragraphs 22 and 23 below)]
15. Status of the Covered Bonds: Senior
16. Status of the Covered Bond Guarantee: Senior
PROVISIONS RELATING TO INTEREST (IF ANY) PAYABLE
17. Fixed Rate Covered Bond Provisions: [Applicable from the Interest Commencement Date to the earlier of (i) the
Final Maturity Date; (ii) the date of Conversion of the Covered Bonds; and
(iii) the Conversion Event Date]/[Not Applicable]
(If not applicable, delete the remaining subparagraphs of this paragraph)
(a) Rate (s) of Interest: l per cent. per annum [payable [annually/semi‑annually/quarterly/ l ] in
arrear on each Interest Payment Date
(b) Interest Payment Date(s): l in each year up to and including earlier of (i) the Final Maturity Date;
(ii) the date of Conversion of the Covered Bonds; and (iii) the Conversion
Event Date
(Amend appropriately in the case of irregular coupons)
(c) Fixed Coupon Amount(s): [ l per Calculation Amount/Not Applicable]
(Applicable to Covered Bonds in definitive form.)
(d) Broken Amount(s): l per Calculation Amount, payable on the Interest Payment Date falling
(Applicable to Covered Bonds in definitive form.) in/on l /[Not Applicable]
(e) Day Count Fraction: [30/360 or Actual/Actual (ICMA) or RBA Bond Basis/Australian Bond
Basis/specify other]
(f) Business Day Convention: [Floating Rate Convention/Following Business Day Convention/Modified Following
Business Day Convention/Preceding Business Day Convention/specify other]
· Adjusted: [Applicable/Not Applicable]
· Non-Adjusted: [Applicable/Not Applicable]
(g) Additional Business Centres: l
(h) Determination Date(s): l in each year/ [Not Applicable]
(i) Other terms relating to the method of calculating interest [None/Give details]
for Fixed Rate Covered Bonds which are Exempt Covered Bonds:
18. Floating Rate Covered Bond Provisions: [Applicable from the Interest Commencement Date to the earlier of (i) the
Final Maturity Date; (ii) the date of Conversion of the Covered Bonds; and
(iii) the Conversion Event Date]/[Not Applicable]
(If not applicable, delete the remaining subparagraphs of this paragraph)
(a) Specified Period(s)/Specified Interest Payment Dates: The period from, and including, each Specified Interest Payment Date to, but
excluding, the following Specified Interest Payment Date provided that the
first Specified Period shall be from, and including, the Interest Commencement
Date to, but excluding, the next Specified Interest Payment Date.
l from, but excluding, the Interest Commencement Date to, and including, the
earlier of (i) the date on which the Final Redemption Amount is paid in full;
(ii) the Final Maturity Date; (iii) the date of Conversion of the Covered
Bonds; and (iv) the Conversion Event Date
(b) Business Day Convention: [Floating Rate Convention/Following Business Day Convention/Modified Following
Business Day Convention/ Preceding Business Day Convention/specify other]
(c) Additional Business Centre(s): l
(d) Manner in which the Rate of Interest and Interest Amount are [Screen Rate Determination/BBSW Rate Determination]
to be determined:
(e) Party responsible for determining the Rate of Interest l (the Calculation Agent)
and/or calculating the Interest Amount (if not the Principal Paying Agent):
(f) Screen Rate Determination: [Applicable/Not Applicable]
· Reference Rate, Relevant Time and Relevant Financial Reference Rate: l month l EURIBOR/HIBOR/CDOR/SIBOR/BKBM/NIBOR
Centre: [Compounded Daily SONIA]
Relevant Time: l /[Not Applicable]
Relevant Financial Centre: [London/New York/Brussels/Hong
Kong/Toronto/Sydney/Singapore/Auckland/Oslo/ specify other/Specify other
Relevant Financial Centre]/[Not Applicable]
· Interest Determination Date(s): l
· Relevant Screen Page: l
(g) SONIA Provisions: [Applicable/Not Applicable]
(If not applicable, delete the remaining subparagraphs of this paragraph)
· Calculation Method: Compounded Daily SONIA Formula
· Observation Method: [Lag/Observation Shift/Not Applicable]
· Lag Lookback Period (p): [5/ l London Banking Days][Not Applicable]
· Observation Shift Period: [5/ l London Banking Days][Not Applicable]
(N.B. When setting the Lag Lookback Period (p) or the Observation Shift
Period, the practicalities of this period should be discussed with the
Principal Paying Agent or, if applicable, such other party responsible for the
calculation of the Rate of Interest, as specified in the applicable Pricing
Supplement. It is anticipated that '(p)' will be no fewer than 5 London
Banking Days unless otherwise agreed with the Principal Paying Agent or, if
applicable/required, such other party responsible for the calculation of the
Rate of Interest, as specified in the applicable Pricing Supplement, in
relation to the relevant issuance)
(h) BBSW Rate Determination: [Applicable/Not Applicable]
BBSW Rate: [As per Condition l / l / Specify]
(i) Linear Interpolation: [Not Applicable/Applicable - the Rate of Interest for the long/short
first/last Interest Period shall be calculated using Linear Interpolation]
(j) Margin(s): +/- l per cent. per annum
(k) Minimum Rate of Interest: l per cent. per annum
(l) Maximum Rate of Interest: l per cent. per annum
(m) Day Count Fraction: [ Actual/Actual [Actual/Actual (ISDA)]
Actual/365 (Fixed)
Actual/365 (Sterling)
Actual/360
30/360 360/360 [Bond Basis]
30E/360 [Eurobond Basis]
[30E/360 (ISDA)] [specify other]
(n) Interest Amounts Non-Adjusted: [Applicable/Not Applicable]
19. Fixed Rate Covered Bond Provisions: [Applicable if payment of the Guaranteed Amount corresponding to the Final
Redemption Amount is deferred in whole or in part from the earlier of (i) the
Final Maturity Date; (ii) the date of Conversion of the Covered Bonds; and
(iii) the Conversion Event Date]/[Not Applicable]]
(If not applicable, delete the remaining subparagraphs of this paragraph)
(a) Rate (s) of Interest: (i) l per cent. per annum [payable
[annually/semi‑annually/quarterly/ l ] in arrear on each Interest Payment
Date
(ii) [ l per cent. per annum [payable
[annually/semi‑annually/quarterly/ l ] in arrear on each Interest Payment
Date]/[Not Applicable]
(b) Interest Payment Date(s): l from, but excluding, the earlier of (i) the Final Maturity Date; (ii) the
date of Conversion of the Covered Bonds; and (iii) the Conversion Event Date
to, and including, the earlier of (x) the date on which the Final Redemption
Amount is paid in full and (y) the Extended Due for Payment Date
(c) Fixed Coupon Amount(s): (i) [ l per Calculation Amount/Not Applicable]
(ii) [ l per Calculation Amount/Not Applicable]/[Not Applicable]
(d) Broken Amount(s): (i) l per Calculation Amount, payable on the Interest Payment Date falling
in/on l /[Not Applicable]
(ii) l per Calculation Amount, payable on the Interest Payment Date
falling in/on l /[Not Applicable]
(e) Day Count Fraction: [30/360 or Actual/Actual (ICMA) or RBA Bond Basis/Australian Bond
Basis/specify other]
(f) Business Day Convention: [Floating Rate Convention/Following Business Day Convention/Modified Following
Business Day Convention/Preceding Business Day Convention/specify other]
· Adjusted: [Applicable/Not Applicable]
· Non-Adjusted: [Applicable/Not Applicable]
(g) Additional Business Centres: l
(h) Determination Date(s): l in each year/ [Not Applicable]
20. Floating Rate Covered Bond Provisions [Applicable if payment of the Guaranteed Amount corresponding to the Final
Redemption Amount is deferred in whole or in part from the earlier of (i) the
Final Maturity Date; (ii) the date of Conversion of the Covered Bonds; and
(iii) the Conversion Event Date]/[Not Applicable]
(If not applicable, delete the remaining subparagraphs of this paragraph)
(a) Specified Period(s)/Specified Interest Payment Dates: The period from, and including, each Specified Interest Payment Date to, but
excluding, the following Specified Interest Payment Date provided that the
first Specified Period shall be from, and including, the earlier of (i) the
Final Maturity Date; (ii) the date of Conversion of the Covered Bonds; and
(iii) the Conversion Event Date to, but excluding, the next Specified Interest
Payment Date.
l from, but excluding, the earlier of (i) the Final Maturity Date; (ii) the
date of Conversion of the Covered Bonds; and (iii) the Conversion Event Date
to, and including, the earlier of (x) the date on which the Final Redemption
Amount is paid in full and (y) the Extended Due for Payment Date
(b) Business Day Convention: [Floating Rate Convention/Following Business Day Convention/Modified Following
Business Day Convention/ Preceding Business Day Convention/specify other]
(c) Additional Business Centre(s): l
(d) Manner in which the Rate of Interest and Interest Amount are [Screen Rate Determination/BBSW Rate Determination]
to be determined:
(e) Party responsible for determining the Rate of Interest l (the Calculation Agent)
and/or calculating the Interest Amount (if not the Principal Paying Agent):
(f) Screen Rate Determination: [Applicable/Not Applicable]
· Reference Rate and Relevant Financial Centre: Reference Rate: l month l EURIBOR/HIBOR/CDOR/SIBOR/BKBM/NIBOR
[Compounded Daily SONIA]
Relevant Time: l
Relevant Financial Centre: [London/New York/Brussels/Hong
Kong/Toronto/Sydney/Singapore/Auckland/Oslo/Specify other Relevant Financial
Centre]/[Not Applicable]
· Interest Determination Date(s): l
· Relevant Screen Page: l
(g) SONIA Provisions: [Applicable/Not Applicable]
(If not applicable, delete the remaining subparagraphs of this paragraph)
· Calculation Method: Compounded Daily SONIA Formula
· Observation Method: [Lag/Observation Shift/Not Applicable]
· Lag Lookback Period (p): [5/ l London Banking Days][Not Applicable]
· Observation Shift Period: [5/ l London Banking Days][Not Applicable]
(N.B. When setting the Lag Lookback Period (p) or the Observation Shift
Period, the practicalities of this period should be discussed with the
Principal Paying Agent or, if applicable, such other party responsible for the
calculation of the Rate of Interest, as specified in the applicable Pricing
Supplement. It is anticipated that '(p)' will be no fewer than 5 London
Banking Days unless otherwise agreed with the Principal Paying Agent or, if
applicable/required, such other party responsible for the calculation of the
Rate of Interest, as specified in the applicable Pricing Supplement, in
relation to the relevant issuance)
(It is anticipated that Screen Rate Determination will be used on an issue by
issue basis, unless otherwise agreed between the Issuer and the relevant
dealer or the relevant managers on the launch of a particular issue.)
(h) BBSW Rate Determination: [Applicable/Not Applicable]
BBSW Rate: [As per Condition 4(b)(ii)(A) / Specify]
(i) Linear Interpolation: [Not Applicable/Applicable - the Rate of Interest for the long/short
first/last Interest Period shall be calculated using Linear Interpolation]
(j) Margin(s): (i) +/- l per cent. per annum
(ii) [ +/- l per cent. per annum]/[Not Applicable]
(k) Minimum Rate of Interest: l per cent. per annum
(l) Maximum Rate of Interest: l per cent. per annum
(m) Day Count Fraction: [ Actual/Actual [Actual/Actual (ISDA)]
Actual/365 (Fixed)
Actual/365 (Sterling)
Actual/360
30/360 360/360 [Bond Basis]
30E/360 [Eurobond Basis]
[30E/360 (ISDA)] [specify other]
(n) Interest Amounts Non-Adjusted: [Applicable/Not Applicable]
PROVISIONS RELATING TO REDEMPTION
21. Notice periods for Condition 6(b) (Redemption for tax reasons) Minimum Period: 30 days
or Condition 6(e) (Redemption due to illegality):
Maximum Period: 60 days
22. Issuer Call: [Applicable/Not Applicable]
(If not applicable, delete the remaining subparagraphs of this paragraph)
(a) Optional Redemption Date(s): l
(b) Optional Redemption Amount and method, if any, of [ l per Calculation Amount]/[specify other]
calculation of such amount(s)::
(c) If redeemable in part: [Applicable/Not Applicable]
(i) Minimum Redemption Amount: l
(ii) Maximum Redemption Amount: l
(d) Notice period (if other than as set out in the Conditions): [Not Applicable] [Minimum Period: l Business Days] [Maximum Period: l
Business Days]
23. Investor Put: [Applicable/Not Applicable]
(If not applicable, delete the remaining subparagraphs of this paragraph)
(a) Optional Redemption Date(s): l
(b) Optional Redemption Amount: [ l per Calculation Amount]
(c) Notice period (if other than as set out in the Conditions): Minimum Period: l Business Days
Maximum Period: l Business Days
24. Final Redemption Amount: [ l per Calculation Amount]/[specify other]
25. Early Redemption Amount payable on redemption for taxation [ l per Calculation Amount/ l ]/[specify other]
reasons or illegality of the Intercompany Note Subscription Agreement or the
Demand Note Subscription Agreement or on event of default and/or the method of
calculating the same (if required or if different from that set out in
Condition 6(f) ):
GENERAL PROVISIONS APPLICABLE TO THE COVERED BONDS
26. Tax gross-up by Issuer in accordance with Condition 7: [Applicable/Not applicable]
27. Form of Covered Bonds: Bearer Covered Bonds:
[Temporary Bearer Global Covered Bond exchangeable for a Permanent Bearer
Global Covered Bond which is exchangeable for Bearer Definitive Covered Bonds
[on 60 days' notice given at any time/only upon an Exchange Event]
[Temporary Bearer Global Covered Bond exchangeable for Definitive Covered
Bonds]
[Permanent Bearer Global Covered Bond exchangeable for Definitive Covered
Bonds [on 60 days' notice given at any time/only upon an Exchange Event]
[Registered Covered Bonds: [Registered Covered Bonds Restricted/Unrestricted
Global Certificate s ] - Euroclear/Clearstream
[Registered Global Covered Bond registered in the name of [a common depositary
for Euroclear and Clearstream, Luxembourg].] [Registered Global Covered Bond
U.S.$ l nominal amount) registered in the name of the common depositary for
[Euroclear and Clearstream, Luxembourg]]
28. Additional Financial Centre(s) or other special provisions [[Not Applicable]/[give details]]
relating to Payment Days:
29. Talons for future Coupons to be attached to Definitive Bearer [Yes, as the Covered Bonds have more than 27 coupon payments, Talons may be
Covered Bonds: required if, on exchange into definitive form, more than 27 coupon payments
are still to be made/No.]
30. U.S. Selling Restrictions : [Reg S Compliance Category 2 ; TEFRA C/TEFRA D/TEFRA not applicable/ l ]
[PURPOSE OF PRICING SUPPLEMENT
This Pricing Supplement comprises the Pricing Supplement required for issue
and [admission to trading on l] of the Covered Bonds described herein]
pursuant to the A$6,000,000,000 BOQ Covered Bond Programme of the Bank of
Queensland Limited.]
RESPONSIBILITY
[The information contained in] l has been extracted from [the following
source] l . The Issuer confirms that such information has been accurately
reproduced and that, so far as it is aware and is able to ascertain from
information published by l , no facts have been omitted which would render
the reproduced information inaccurate or misleading].
Signed on behalf of Bank of Queensland Limited:
By:…………………………………………………
Duly authorised
Signed on behalf of Perpetual Corporate Trust Limited
in its capacity as trustee of the BOQ Covered Bond Trust:
By:
……………………………………………………
Duly authorised
PART B-OTHER INFORMATION
1. LISTING AND ADMISSION TO TRADING
(i) Listing and admission to trading: [Application [has been/is expected to be] made by the Issuer (or on its
behalf) for the Covered Bonds to be listed on [specify market - this should
not be a regulated market]
[Date from which admission effective l ]
(ii) Estimate of total expenses related to admission to trading: l
2. RATINGS
Ratings: [The Covered Bonds to be issued have not been rated by any rating agency]
[[The Covered Bonds to be issued [[have been]/[are expected to be]] rated
[insert rating] by [Moody's Investors Service Pty Limited (Moody's) and /
Fitch Australia Pty. Ltd. (Fitch).] [Each of] Moody's and / Fitch is
established outside the European Economic Area and the United Kingdom and has
not applied for registration under the Regulation (EC) No. 1060/2009 (as
amended) (the CRA Regulation) or Regulation (EC) No. 1060/2009 as it forms
part of United Kingdom domestic law by virtue of the European Union
(Withdrawal) Act 2018 (the UK CRA Regulation). [Ratings by Moody's are
endorsed by Moody's Deutschland GmbH and Moody's Investors Services Ltd.
and / ratings by Fitch are endorsed by Fitch Ratings Ireland Limited and
Fitch Ratings Limited, each of which is a credit rating agency established in
the European Economic Area and registered under the CRA Regulation or
established in the United Kingdom and registered under the UK CRA Regulation,
respectively, each in accordance with the CRA Regulation or the UK CRA
Regulation, as applicable.]
[Need to include a brief explanation of the meaning of the ratings if this has
been previously published by the rating provider. Consider including the
following (to be completed at the time of the relevant issuance):
[[Moody's Investors Service] has, in its [month, year] publication "[Rating
Symbols and Definitions]", described a credit rating of 'Aa' in the
following terms: ["Obligations rated Aa are judged to be of high quality and
are subject to very low credit risk … Note: Moody's appends numerical
modifiers 1, 2, and 3 to each generic rating classification from Aa through
Caa. The modifier 1 indicates that the obligation ranks in the higher end of
its generic rating category; the modifier 2 indicates a mid-range ranking; and
the modifier 3 indicates a ranking in the lower end of that generic rating
category.".]] [Complete as applicable].
[[Fitch Ratings] has, in its [month, year] publication "[Fitch Ratings
Definitions]", described a [long term] credit rating of 'AA' in the
following terms: ["'AA' ratings denote expectations of very low default risk.
They indicate very strong capacity for payment of financial commitments. This
capacity is not significantly vulnerable to foreseeable events. Note: Within
rating categories, Fitch may use modifiers. The modifiers "+" or "-" may be
appended to a rating to denote relative status within major rating
categories."]] [Complete as applicable]]]
There is no assurance that the Rating Agencies will rate the Covered Bonds up
to their Final Maturity Date. Covered Bondholders should note that pursuant to
Condition 14 (Meetings of Covered Bondholders, Modification, Waiver and
Substitution) of the Conditions, the Bond Trustee and the Security Trustee are
required to concur in and effect any modifications required to any of the
Programme Documents to accommodate the removal of any one of the Rating
Agencies from the Programme or the addition of any Rating Agency, provided
that at all times there are at least two rating agencies rating the Programme
and any Covered Bonds then outstanding and, in respect of the removal of any
one of the Rating Agencies from the Programme only, the proposed modification
effecting such removal is not an Objected Modification.
3. INTERESTS OF NATURAL AND LEGAL PERSONS INVOLVED IN THE
ISSUE
[Save for any fees payable to the Managers, so far as the Issuer is aware, no
person involved in the issue of the Covered Bonds has an interest material to
the offer. The Managers and their affiliates have engaged, and may in future
engage in investment banking and/or commercial banking transactions with, and
may perform other services for, the Issuer, the Covered Bond Guarantor and
their affiliates]
4. YIELD (Fixed Rate Covered Bonds only)
Indication of yield: l
The yield is calculated at the Issue Date on the basis of the Issue Price. It
is not an indication of future yield.
5. OPERATIONAL INFORMATION
(a) ISIN: l
(b) Common Code: l
(c) CFI: [[See/[ ], as updated, as set out on] the website of the Association of
National Numbering Agencies (ANNA) or alternatively sourced from the
responsible National Numbering Agency that assigned the ISIN/Not
Applicable/Not Available]
(d) FISN: [[See/[ ], as updated, as set out on] the website of the Association of
National Numbering Agencies (ANNA) or alternatively sourced from the
responsible National Numbering Agency that assigned the ISIN/Not
Applicable/Not Available] (N.B. If the CFI and/or FISN is not required,
requested or available, it/they should be specified to be "Not Applicable")
(e) Any clearing system(s) other than [[Not Applicable]/ l ]
Euroclear Bank S.A./N.V. Clearstream Banking, S.A. and
the relevant identification number(s):
(f) Delivery: Delivery [against/free of] payment
(g) Name(s) and address(es) of initial Paying Agent(s) in l
relation to the Covered Bonds:
(h) Name(s) and address(es) of additional Paying Agent(s) (if l
any) in relation to the Covered Bonds:
(i) Name and address of Calculation Agent in relation to A$ l
Registered Covered Bonds if other than the Issuer:
(j) Relevant Benchmark s : [Not Applicable]/[ l is provided by l ].
[As at the date hereof, [ l appears in the register of administrators and
benchmarks established and maintained by the European Securities and Markets
Authority pursuant to the Benchmarks Regulation.]
[As at the date hereof, [ l appears in the FCA's register of administrators
under Article 36 of the UK Benchmarks Regulation.]
[As at the date hereof, [ l does not appear in the register of administrators
and benchmarks established and maintained by [the European Securities and
Markets Authority][the FCA] pursuant to Article 36 of the [Benchmarks
Regulation][UK Benchmarks Regulation]. [As far as the Issuer is aware, as at
the date hereof, Article 2 of the [Benchmarks Regulation][UK Benchmarks
Regulation] applies, such that l is not currently required to obtain
authorisation/registration (or, if located outside the [European Union][United
Kingdom], recognition, endorsement or equivalence).]/[ l does not fall within
the scope of the [Benchmarks Regulation][UK Benchmarks Regulation].]].
Terms and Conditions of the Covered Bonds
The following are the terms and conditions (the Conditions) of the Covered
Bonds which will be incorporated by reference into, and (as completed by the
Applicable Final Terms in relation to a Tranche of Covered Bonds or, in
relation to an Exempt Covered Bond (as defined below) the Applicable Pricing
Supplement)) apply to each A$ Registered Covered Bond, Global Covered Bond (as
defined below) and each Definitive Covered Bond, in the latter case only if
permitted by the relevant stock exchange or other relevant authority (if any)
and agreed by the Issuer and the relevant Dealer(s) at the time of issue but,
if not so permitted and agreed, such Definitive Covered Bond will have
endorsed thereon or attached thereto such Conditions. The Applicable Final
Terms (or the relevant provisions thereof) will be endorsed upon, or attached
to, each Global Covered Bond and Definitive Covered Bond or, if this Covered
Bond is an A$ Registered Covered Bond or a Covered Bond which is neither
admitted to trading on a regulated market in the European Economic Area nor
offered in the European Economic Area in circumstances where a prospectus is
required to be published under the Prospectus Regulation (an Exempt Covered
Bond), the Applicable Final Terms (or the relevant provisions thereof) are set
out in Part A of the Pricing Supplement, in the case of an A$ Registered
Covered Bond, entered into the register, or in the case of any other Exempt
Covered Bond, attached to or endorsed on this Covered Bond and may specify
other terms and conditions which shall, to the extent so specified or to the
extent inconsistent with the Conditions, replace or modify the Conditions for
the purposes of this Covered Bond. References to the Applicable Final Terms
are, unless otherwise stated, (i) to Part A of the Final Terms (or the
relevant provisions thereof) attached to or endorsed on this Covered Bond or
(ii) where this Covered Bond is an Exempt Covered Bond (including an A$
Registered Covered Bond), to Part A (or the relevant provisions thereof) of
the Pricing Supplement (or the relevant provisions thereof) attached to or
endorsed on this Covered Bond or, in the case of an A$ Registered Covered
Bond, entered into the register. The expression Prospectus Regulation means
Regulation (EU) 2017/1129.
This Covered Bond is one of a Series (as defined below) of Covered Bonds
issued by Bank of Queensland Limited (BOQ and the Issuer) constituted by a
trust deed (such trust deed as modified and/or supplemented and/or restated
from time to time, the Bond Trust Deed) dated on or about 4 May 2017 (the
Programme Date) made between, amongst others, the Issuer, Perpetual Corporate
Trust Limited ABN 99 000 341 533 as covered bond guarantor (the Covered Bond
Guarantor), B.Q.L. Management Pty Limited as trust manager (the Trust Manager)
and BNY Trust Company of Australia Limited as bond trustee (in such capacity,
the Bond Trustee, which expression will include any successor as Bond
Trustee).
Save as provided for in Conditions 9 and 14, references herein to the Covered
Bonds will be references to the Covered Bonds of this Series and will mean:
(a) in relation to any Covered Bonds represented by a global
covered bond (a Global Covered Bond), units of the lowest Specified
Denomination in the Specified Currency;
(b) any Global Covered Bond;
(c) any Definitive Covered Bonds in bearer form (Bearer
Definitive Covered Bonds) issued in exchange for a Global Covered Bond in
bearer form;
(d) any Definitive Covered Bonds in registered form (Registered
Definitive Covered Bonds) (whether or not issued in exchange for a Global
Covered Bond in registered form); and
(e) any A$ Registered Covered Bonds.
The Covered Bonds (other than the A$ Registered Covered Bonds) and the Coupons
(as defined below) have the benefit of a principal agency agreement (such
principal agency agreement as amended and/or supplemented and/or restated from
time to time, the Principal Agency Agreement) dated the Programme Date and
made between the Issuer, the Covered Bond Guarantor, the Trust Manager, the
Bond Trustee and The Bank of New York Mellon, London Branch, as issuing and
principal paying agent (in such capacity, the Principal Paying Agent, which
expression will include any successor Principal Paying Agent) and the other
paying agents appointed pursuant to the Principal Agency Agreement (together
with the Principal Paying Agent, the Paying Agents, which expression will
include any additional or successor paying agents), The Bank of New York
Mellon SA/NV, Luxembourg Branch as registrar (in such capacity, the Registrar,
which expression will include any successor registrar) and The Bank of New
York Mellon, London Branch as transfer agent (in such capacity, a Transfer
Agent and together with the Registrar, the Transfer Agents, which expression
will include any additional or successor transfer agents). The Applicable
Final Terms may specify any other agency agreement that applies to Covered
Bonds and Coupons issued by the Issuer.
A$ Registered Covered Bonds also have the benefit of The ASX Austraclear
Registry and IPA Services Agreement (such agreement as amended and/or
supplemented and/or restated from time to time, the A$ Registry Agreement and,
together with the Principal Agency Agreement, the Agency Agreements) dated on
or about the Programme Date and made between BOQ as Issuer, the Covered Bond
Guarantor, the Bond Trustee and Austraclear Services Limited ABN 28 003 284
419 (Austraclear Services) as A$ registrar (in such capacity, the A$
Registrar). If a calculation agent is required for the purpose of
calculating any amount or making any determination under any A$ Registered
Covered Bonds, such appointment will be notified in the Applicable Final Terms
(the person so specified, the Calculation Agent). The Issuer or, following
the occurrence of an Issuer Event of Default and the service of an Issuer
Acceleration Notice and a Notice to Pay, the Covered Bond Guarantor (acting at
the direction of the Trust Manager) may terminate the appointment of the
Calculation Agent, appoint additional or other Calculation Agents or elect to
have no Calculation Agent. Where no Calculation Agent is appointed the
calculation of interest, principal and other payments in respect of A$
Registered Covered Bonds will be made by the Issuer or, following the
occurrence of an Issuer Event of Default and the service of an Issuer
Acceleration Notice and a Notice to Pay, the Trust Manager (references herein
to the Calculation Agent will include the Issuer or the Trust Manager, when
acting as Calculation Agent in accordance with the foregoing).
As used herein, Agents will mean each Paying Agent, each Transfer Agent, each
Registrar and the A$ Registrar, Principal Paying Agent will mean, in relation
to a Tranche or Series of Covered Bonds (other than the A$ Registered Covered
Bonds), the Principal Paying Agent or such other paying agent as the
Applicable Final Terms for that Tranche or Series may specify, Registrar will
mean, in relation to a Tranche or Series of Covered Bonds (other than A$
Registered Covered Bonds), the Registrar or such other registrar as the
Applicable Final Terms for that Tranche or Series may specify, A$ Registrar
will mean, in relation to a Tranche or Series of A$ Registered Covered Bonds,
the A$ Registrar or such other A$ registrar as the Applicable Final Terms for
that Tranche or Series may specify, Transfer Agent will mean, in relation to a
Tranche or Series of Covered Bonds, the Transfer Agent or such other transfer
agent as the Applicable Final Terms for that Tranche or Series may specify and
Calculation Agent will mean, in relation to a Tranche or Series of A$
Registered Covered Bonds, the Calculation Agent as the Applicable Final Terms
for that Tranche or Series may specify.
Interest-bearing Bearer Definitive Covered Bonds have (unless otherwise indicated in the Applicable Final Terms) interest coupons (Coupons) and, if indicated in the Applicable Final Terms, talons for further Coupons (Talons) attached on issue. Any reference herein to Coupons or coupons will, unless the context otherwise requires, be deemed to include a reference to Talons or talons. Registered Covered Bonds (which include Registered Global Covered Bonds and/or Registered Definitive Covered Bonds as the case may be), Global Covered Bonds and A$ Registered Covered Bonds do not have Coupons or Talons attached on issue.
The Bond Trustee acts as trustee for the holders for the time being of the Covered Bonds (the Covered Bondholders, which expression will, in relation to any Covered Bonds represented by a Global Covered Bond, be construed as provided below), the holders of the Coupons (the Couponholders, which expression will, unless the context otherwise requires, include the holders of the Talons), and for holders of each other Series of Covered Bonds in accordance with the provisions of the Bond Trust Deed.
As used herein, Tranche means Covered Bonds which are identical in all
respects (including as to listing or admission to trading) and Series means a
Tranche of Covered Bonds together with any further Tranche or Tranches of
Covered Bonds which are: (i) expressed to be consolidated and form a single
series; and (ii) identical in all respects (including as to listing or
admission to trading) except for their respective Issue Dates, Interest
Commencement Dates and/or Issue Prices.
The Covered Bond Guarantor has, in the Bond Trust Deed, irrevocably and unconditionally guaranteed the due and punctual payment of Guaranteed Amounts in respect of the Covered Bonds as and when the same become due for payment on certain dates in accordance with the Bond Trust Deed (Due for Payment), but only after service of a Notice to Pay on the Covered Bond Guarantor following an Issuer Event of Default and service by the Bond Trustee of an Issuer Acceleration Notice on the Issuer or the occurrence of a Covered Bond Guarantor Event of Default and service by the Bond Trustee of a Covered Bond Guarantee Acceleration Notice on the Covered Bond Guarantor.
The security for the obligations of the Covered Bond Guarantor under the
Covered Bond Guarantee and the other Programme Documents to which it is a
party has been created in and pursuant to, and on the terms set out in, a
security agreement governed by the law applying in the State of New South
Wales, Australia (such security as amended and/or supplemented and/or restated
from time to time, the Security Deed) dated 4 May 2017 and made between the
Covered Bond Guarantor, the Issuer, the Trust Manager, the Bond Trustee, P.T.
Limited ABN 67 004 454 666 (the Security Trustee) and certain other Secured
Creditors.
These Conditions include summaries of, and are subject to, the provisions of
the Bond Trust Deed, the Security Deed and the Agency Agreements (as
applicable).
Copies of the Bond Trust Deed, the Security Deed, the Definitions Schedule (as defined below), the Agency Agreements and each of the other Programme Documents are available for inspection free of charge during normal business hours at the registered office for the time being of the Bond Trustee being at the Programme Date at Level 2, 1 Bligh Street, Sydney, NSW, 2000 and at the specified office of the Principal Paying Agent, the Registrar and the Transfer Agent.
Copies of the Applicable Final Terms for all Covered Bonds of each Series
(including in relation to unlisted Covered Bonds of any Series) are obtainable
during normal business hours at the specified office of the Paying Agents, the
Registrar and Transfer Agent. If the Covered Bonds are to be admitted to
trading on the regulated market of the London Stock Exchange, the Applicable
Final Terms will be published on the website of the London Stock Exchange
through a regulatory information service. If this Covered Bond is an Exempt
Covered Bond, the Applicable Pricing Supplement will only be obtainable by a
Covered Bondholder holding one or more Covered Bonds and such Covered
Bondholder must produce evidence satisfactory to the Issuer and the Bond
Trustee or, as the case may be, the relevant Agent as to its holding of
Covered Bonds and identity. The Covered Bondholders and the Couponholders
are deemed to have notice of, are bound by, and are entitled to the benefit
of, all the provisions of, and definitions contained in, the Bond Trust Deed,
the Security Deed, the Definitions Schedule (as defined below), the relevant
Agency Agreements, each of the other Programme Documents and the Applicable
Final Terms which are applicable to them and to have notice of the Final Terms
(or, in the case of Exempt Covered Bonds, the Pricing Supplement) relating to
each other Series.
Except where the context otherwise requires, capitalised terms used and not
otherwise defined in these Conditions will bear the meanings given to them in
the Bond Trust Deed, the Applicable Final Terms and/or the BOQ Covered Bond
Trust Definitions Schedule made between the parties to the Programme Documents
on 4 May 2017 (the Definitions Schedule) (as the same may be amended and/or
supplemented and/or restated from time to time), a copy of each of which may
be obtained as described above. In the event of inconsistency between the
Bond Trust Deed and the Definitions Schedule, the Bond Trust Deed will prevail
and in the event of inconsistency between the Bond Trust Deed and the
Applicable Final Terms, the Applicable Final Terms will prevail.
1. Form, Denomination and Title
The Covered Bonds are in bearer form or in registered form as specified in the Applicable Final Terms and, in the case of Definitive Covered Bonds (being Bearer Definitive Covered Bond(s) and/or, as the context may require, Registered Definitive Covered Bond(s)), serially numbered, in the Specified Currency and the Specified Denomination(s). Covered Bonds of one Specified Denomination may not be exchanged for Covered Bonds of another Specified Denomination and Bearer Covered Bonds may not be exchanged for Registered Covered Bonds or A$ Registered Covered Bonds and vice versa.
This Covered Bond may be a Fixed Rate Covered Bond or a Floating Rate Covered Bond, depending upon the Interest Basis shown in the Applicable Final Terms, and subject, in each case, to confirmation from the Rating Agencies that the then current credit ratings of any outstanding Series of Covered Bonds will not be adversely affected by the issuance of this Covered Bond.
If this Covered Bond is a Bearer Definitive Covered Bond, it is issued with Coupons and, if applicable, Talons attached. Subject as set out below, title to the Bearer Covered Bonds and Coupons will pass by delivery, title to the Registered Covered Bonds will pass upon registration of transfers in accordance with the provisions of the Principal Agency Agreement and title to the A$ Registered Covered Bonds will pass upon registration of transfers in accordance with these Conditions.
The Issuer, the Covered Bond Guarantor, each of the Agents and the Bond
Trustee will (except as otherwise permitted in the Bond Trust Deed and these
Conditions or as ordered by a court of competent jurisdiction or as required
by law or applicable regulations) deem and treat the bearer of any Bearer
Covered Bond or Coupon and the registered holder of any Registered Covered
Bond or A$ Registered Covered Bond as the absolute owner thereof
(notwithstanding any notice to the contrary and whether or not it is overdue
and notwithstanding any notice of ownership or writing thereon or notice of
any previous loss or theft thereof) for all purposes but, in the case of any
Global Covered Bond, without prejudice to the provisions set out in the next
succeeding paragraph.
For so long as any of the Covered Bonds is represented by a Global Covered Bond held on behalf of, or, as the case may be, registered in the name of a common depositary for Euroclear Bank S.A./N.V. (Euroclear) and/or Clearstream Banking, S.A. (Clearstream, Luxembourg) each person (other than Euroclear or Clearstream, Luxembourg) who is for the time being shown in the records of Euroclear or Clearstream, Luxembourg as the holder of a particular nominal amount of such Covered Bonds (in which regard any certificate or other document issued by Euroclear or Clearstream, Luxembourg as to the nominal amount of such Covered Bonds standing to the account of any person will be conclusive and binding for all purposes save in the case of manifest error and any such certificate or other document may comprise any form of statement or print out of electronic records provided by the relevant clearing system (including, without limitation, Euroclear's EUCLID or Clearstream's Creation on-line system) in accordance with its usual procedures and in which the holder of a particular nominal amount of the Covered Bonds is clearly identified with the amount of such holding) will be treated by the Issuer, the Covered Bond Guarantor, the Paying Agents, the Security Trustee and the Bond Trustee as the holder of such nominal amount of such Covered Bonds for all purposes other than with respect to the payment of principal or interest or other amounts on such nominal amount of such Covered Bonds in accordance with and subject to the terms of the relevant Global Covered Bond and the expression Covered Bondholder and related expressions will be construed accordingly. Covered Bonds which are represented by a Global Covered Bond will be transferable only in accordance with the rules and procedures for the time being of Euroclear and Clearstream, Luxembourg, as the case may be.
For so long as any of the A$ Registered Covered Bonds are lodged in the
clearance and settlement system operated by Austraclear Ltd ABN 94 002 060 773
(Austraclear and such system being the Austraclear System) in accordance with
the regulations and procedures established by Austraclear to govern the use of
the Austraclear System (such regulations and procedures being the Austraclear
Regulations) each person (other than Austraclear Ltd) who is for the time
being shown in the records of Austraclear as the holder of such A$ Registered
Covered Bonds (in which regard any certificate or other document issued by the
Austraclear System or the A$ Registrar as to such A$ Registered Covered Bonds
standing to the account of any person will be conclusive and binding for all
purposes save in the case of manifest error and any such certificate or other
document may comprise any form of statement or print out of electronic records
provided by Austraclear or the A$ Registrar in accordance with its usual
procedures and in which the holder of the A$ Registered Covered Bonds is
clearly identified with the amount of such holding) will (except as otherwise
permitted in the Bond Trust Deed and these Conditions or as ordered by a court
of a competent jurisdiction or as required by applicable law or regulations)
be treated by the Issuer, the Covered Bond Guarantor and the Bond Trustee as
the holder of such A$ Registered Covered Bonds for all purposes other than
with respect to the payment of principal or interest or other amounts of such
Covered Bonds and for the purpose of voting, giving consents and making
requests in relation to such A$ Registered Covered Bonds and the expression
Covered Bondholder and related expressions will be construed accordingly.
For so long as any of the A$ Registered Covered Bonds are lodged in the
Austraclear System, beneficial interests in A$ Registered Covered Bonds will
be transferable only in accordance with the Austraclear Regulations. Where
Austraclear Ltd is recorded in the A$ Register as the holder of an A$
Registered Covered Bond, each person in whose Security Record (as defined in
the Austraclear Regulations) an A$ Registered Covered Bond is recorded is
deemed to acknowledge in favour of the A$ Registrar, the Issuer and
Austraclear Ltd that:
(a) the A$ Registrar's decision to act as the registrar of that
A$ Registered Covered Bond is not a recommendation or endorsement by the A$
Registrar or Austraclear Ltd in relation to that A$ Registered Covered Bond,
but only indicates that the A$ Registrar considers that the holding of the A$
Registered Covered Bonds is compatible with the performance by it of its
obligations as A$ Registrar under the A$ Registry Agreement; and
(b) the holder of the A$ Registered Covered Bond does not rely
on any fact, matter or circumstance contrary to paragraph (a) above.
For so long as the Covered Bonds are represented by a Global Covered Bond and
the relevant clearing systems so permit, the Covered Bonds will be tradeable
only in the minimum authorised denomination of €100,000 and higher integral
multiples of €1,000, notwithstanding that no definitive Covered Bonds will
be issued with a denomination above €199,000.
References to the Austraclear System, Euroclear and/or Clearstream, Luxembourg will, whenever the context so permits, be deemed to include a reference to any additional or alternative clearing system specified in the Applicable Final Terms or as may otherwise be approved by the Issuer, the Principal Paying Agent (other than in respect of any A$ Registered Covered Bonds) and the Bond Trustee.
2. Transfers of Registered Covered Bonds and A$ Registered
Covered Bonds
(a) Transfers of interests in Registered Global Covered Bonds
Transfers of beneficial interests in Registered Covered Bonds in global form
(the Registered Global Covered Bonds) will be effected by Euroclear or
Clearstream, Luxembourg, as the case may be, and, in turn, by other
participants and, if appropriate, indirect participants in such clearing
systems acting on behalf of beneficial transferors and transferees of such
interests. A beneficial interest in a Registered Global Covered Bond will,
subject to compliance with all applicable legal and regulatory restrictions,
be exchangeable for Covered Bonds in definitive form or for a beneficial
interest in another Registered Global Covered Bond only in the authorised
denominations set out in the Applicable Final Terms and only in accordance
with the rules and operating procedures for the time being of Euroclear or
Clearstream, Luxembourg, as the case may be, and in accordance with the terms
and conditions specified in the Principal Agency Agreement.
Prior to expiry of the applicable Distribution Compliance Period, transfers by
the holder of, or of a beneficial interest in, a Registered Global Covered
Bond to a transferee in the United States or who is a U.S. person will only be
made pursuant to the Securities Act or an exemption therefrom, subject to
receipt by the Issuer of such satisfactory evidence as the Issuer may
reasonably require, which may include an opinion of U.S. counsel, that such
transfer is in compliance with any applicable securities laws of any State of
the United States and, in each case, in accordance with any applicable
securities laws of any State of the United States or any other applicable
jurisdiction.
(b) Transfers of Registered Covered Bonds in definitive form
Subject as provided in Condition 2(f) below, upon the terms and subject to the
conditions set forth in the Principal Agency Agreement, a Registered Covered
Bond in definitive form may be transferred in whole or in part (in the
authorised denominations set out in the Applicable Final Terms). In order to
effect any such transfer: (i) the holder or holders must: (A) surrender the
Registered Covered Bond for registration of the transfer of the Registered
Covered Bond (or the relevant part of the Registered Covered Bond) at the
specified office of the relevant Registrar or the relevant Transfer Agent,
with the form of transfer thereon duly executed by the holder or holders
thereof or his or their attorney or attorneys duly authorised in writing; and
(B) complete and deposit such other certifications as may be required by the
relevant Registrar or, as the case may be, the relevant Transfer Agent; and
(ii) the relevant Registrar or, as the case may be, the relevant Transfer
Agent must be satisfied with the documents of title and the identity of the
person making the request. Any such transfer will be subject to such
reasonable regulations as the Issuer and the relevant Registrar may from time
to time prescribe (the initial such regulations being set out in Schedule 3 to
the Principal Agency Agreement). Subject as provided above, the relevant
Registrar or, as the case may be, the relevant Transfer Agent will, within
three business days (being for this purpose a day on which banks are open for
business in the city where the specified office of the relevant Registrar or,
as the case may be, the relevant Transfer Agent is located) of the request (or
such longer period as may be required to comply with any applicable fiscal or
other laws or regulations), authenticate and deliver, or procure the
authentication and delivery of, at its specified office to the transferee or
(at the risk of the transferee) send by uninsured mail, to such address as the
transferee may request, a new Registered Covered Bond in definitive form of a
like aggregate nominal amount to the Registered Covered Bond (or the relevant
part of the Registered Covered Bond) transferred. In the case of the
transfer of part only of a Registered Covered Bond in definitive form, a new
Registered Covered Bond in definitive form in respect of the balance of the
Registered Covered Bond not transferred will be so authenticated and delivered
or (at the risk of the transferor) sent by uninsured mail to the address
specified by the transferor.
(c) Transfers of A$ Registered Covered Bonds
Title to the A$ Registered Covered Bonds passes when details of the transfer
are entered in the A$ Register. The A$ Register will be closed for the
purpose of determining entitlements to payments of interest and principal at
5.00pm in the place where the A$ Register is kept on the eighth calendar day
before the relevant date for payment, or such other date specified in or
determined in accordance with the Applicable Final Terms for that purpose (the
A$ Record Date).
A$ Registered Covered Bonds may be transferred in whole but not in part.
Application for the transfer of A$ Registered Covered Bonds not entered into
the Austraclear System or any alternative clearing system must be made by the
lodgement of a transfer form with the A$ Registrar at its specified office.
Each transfer form must be duly completed, accompanied by any evidence the A$
Registrar may require to establish that the transfer form has been duly
executed and signed by the transferor and the transferee.
If a Covered Bondholder transfers some but not all of the Covered Bonds it
holds and the transfer form does not identify the specific Covered Bonds
transferred, the A$ Registrar may choose which Covered Bonds registered in the
name of the Covered Bondholder have been transferred. However, the Principal
Amount Outstanding of the Covered Bonds registered as transferred must equal
the Principal Amount Outstanding of the Covered Bonds expressed to be
transferred in the transfer form.
For so long as any of the A$ Registered Covered Bonds are lodged in the
Austraclear System, beneficial interests in A$ Registered Covered Bonds will
be transferable only in accordance with the Austraclear Regulations.
(d) Registration of transfer upon partial redemption
In the event of a partial redemption of Covered Bonds under Condition 6, the
Issuer will not be required to register the transfer of any Registered Covered
Bond or A$ Registered Covered Bond, or part of a Registered Covered Bond or an
A$ Registered Covered Bond, called for partial redemption.
(e) Costs of registration
Covered Bondholders will not be required to bear the costs and expenses of
effecting any registration of transfer as provided above, except for any costs
or expenses of delivery other than by regular uninsured mail and except that
the Issuer, the A$ Registrar, any Registrar or any Transfer Agent may require
the payment of a sum sufficient to cover any Taxes including stamp duty, GST
or other governmental charge that may be imposed in relation to the
registration.
(f) Exchanges and transfers of Registered Covered Bonds
generally
Holders of Registered Covered Bonds in definitive form may exchange such
Covered Bonds for interests in a Registered Global Covered Bond of the same
type at any time.
(g) Definitions
In the Conditions, the following expressions will have the following meanings:
Distribution Compliance Period means the period that ends 40 days after the
completion of the distribution of the relevant Tranche of Covered Bonds, as
certified by the relevant Dealer (in the case of a non-syndicated issue) or
the relevant Lead Manager (in the case of a syndicated issue); and
Securities Act means the United States Securities Act of 1933, as amended.
3. Status of the Covered Bonds and the Covered Bond Guarantee
(a)
Status of the Covered Bonds
The Covered Bonds and any relevant Coupons constitute direct, unconditional,
unsubordinated and unsecured obligations of the Issuer and rank pari passu
without any preference or priority among themselves and pari passu with all
other present and future unsecured and unsubordinated obligations of the
Issuer (other than any obligation preferred by mandatory provisions of
applicable law).
Section 13A(3) of the Banking Act 1959 of Australia (the Australian Banking
Act) provides that if an authorised deposit taking institution (ADI) (of which
the Issuer is one) becomes unable to meet its obligations or suspends payment,
the assets of the ADI in Australia are to be available to meet the ADI's
liabilities in the following order:
(i) first, the ADI's liabilities (if any) to the Australian
Prudential Regulation Authority (APRA) in respect of the rights APRA has
against the ADI to be paid amounts equal to the amount which the holder of a
protected account is entitled to receive from APRA under Division 2AA of Part
II of the Australian Banking Act (the Financial Claims Scheme);
(ii) second, the ADI's debts (if any) to APRA in respect of
APRA's costs incurred in relation to the exercise of its powers and the
performance of its functions relating to the ADI in connection with the
Financial Claims Scheme;
(iii) third, the ADI's liabilities (if any) in Australia in
relation to protected accounts that accountholders keep with the ADI;
(iv) fourth, the ADI's debts (if any) to the Reserve Bank of
Australia (the RBA);
(v) fifth, the ADI's liabilities (if any) under an industry
support contract that is certified under section 11CB of the Australian
Banking Act; and
(vi) sixth, the ADI's other liabilities (if any) in the order of
their priority apart from section 13A(3) of the Australian Banking Act.
Section 86 of the Reserve Bank Act 1959 of Australia (the Reserve Bank Act)
provides that, in a winding up of an ADI, debts due to the RBA by an ADI such
as the Issuer shall, subject to section 13A(3) of the Australian Banking Act,
have priority over all other debts of such ADI.
Section 16 of the Australian Banking Act provides that in a winding up of an
ADI the costs (including costs in the nature of remuneration and expenses) of
APRA of being in control of the ADI's business or of having an administrator
in control of the ADI's business will, subject to section 13A(3) of the
Australian Banking Act, have priority over all other unsecured debts.
The Issuer's indebtedness under the Covered Bonds will not be a protected
account for the purposes of the Financial Claims Scheme in Division 2AA of
Part II of the Australian Banking Act and will not be a deposit liability of
the Issuer for the purposes of the Australian Banking Act and is not
guaranteed or insured by any government, government agency or compensation
scheme of Australia or any other jurisdiction. For the purposes of section
13A(3) of the Australian Banking Act the Issuer's indebtedness under the
Covered Bonds will rank as another liability under paragraph (vi) above. If
the Issuer becomes unable to meet its obligations or suspends payment, its
assets in Australia are to be available to meet its indebtedness evidenced by
the Covered Bonds only after the liabilities referred to in section 13A(3)(a)
- (e) have been met.
(b)
Status of the Covered Bond Guarantee
The payment of Guaranteed Amounts in respect of the Covered Bonds when the
same become Due for Payment has been unconditionally and irrevocably
guaranteed by the Covered Bond Guarantor (the Covered Bond Guarantee) as set
out in the Bond Trust Deed. However, the Covered Bond Guarantor will have no
obligation under the Covered Bond Guarantee to pay any Guaranteed Amounts
until the service of a Notice to Pay by the Bond Trustee on the Covered Bond
Guarantor which the Bond Trustee is required to serve following the occurrence
of an Issuer Event of Default and service by the Bond Trustee on the Issuer of
an Issuer Acceleration Notice or, if earlier, following the occurrence of a
Covered Bond Guarantor Event of Default and service by the Bond Trustee of a
Covered Bond Guarantee Acceleration Notice.
The obligations of the Covered Bond Guarantor under the Covered Bond Guarantee
are direct, absolute and (following service of an Issuer Acceleration Notice
and Notice to Pay or a Covered Bond Guarantee Acceleration Notice),
unconditional obligations of the Covered Bond Guarantor, which are secured as
provided in the Security Deed and limited recourse to the Covered Bond
Guarantor as described in Condition 17.
Any payment made by the Covered Bond Guarantor under the Covered Bond
Guarantee will (unless such obligation has been discharged as a result of the
payment of Excess Proceeds to the Bond Trustee pursuant to Condition 9)
discharge pro tanto the obligations of the Issuer in respect of such payment
under the Covered Bonds and Coupons except where such payment has been
declared void, voidable or otherwise recoverable in whole or in part and
recovered from the Bond Trustee or the Covered Bondholders.
4. Interest
(a) Interest on Fixed Rate Covered Bonds
Each Fixed Rate Covered Bond bears interest on its Principal Amount Outstanding from (and including) the Interest Commencement Date at the rate(s) per annum equal to the Rate(s) of Interest payable, subject as provided in these Conditions, in arrear on the Interest Payment Date(s) in each year up to (and including) the date specified in the Applicable Final Terms. If a Notice to Pay is served on the Covered Bond Guarantor, the Covered Bond Guarantor will pay Guaranteed Amounts in equivalent amounts to those described in the preceding sentence under the Covered Bond Guarantee in respect of the Covered Bonds on the Original Due for Payment Dates or, if applicable, the Extended Due for Payment Date.
If the Covered Bonds are in definitive form, except as provided in the
Applicable Final Terms, the amount of interest payable on each Interest
Payment Date in respect of the Fixed Interest Period ending on (but excluding)
such date will amount to the fixed coupon amount specified in the Final Terms
(the Fixed Coupon Amount). Payments of interest on any Interest Payment Date
will, if so specified in the Applicable Final Terms, amount to the broken
amount so specified in the relevant Final Terms (the Broken Amount).
As used in the Conditions, Fixed Interest Period means the period from (and
including) an Interest Payment Date (or the Interest Commencement Date) to
(but excluding) the next (or first) Interest Payment Date.
Except in the case of Covered Bonds in definitive form where a Fixed Coupon
Amount or Broken Amount is specified in the Applicable Final Terms, interest
will be calculated in respect of any period by applying the Rate of Interest
to:
(i) in the case of Fixed Rate Covered Bonds which are A$
Registered Covered Bonds, the Principal Amount Outstanding of the A$
Registered Covered Bond;
(ii) in the case of Fixed Rate Covered Bonds which are
represented by a Global Covered Bond, the aggregate outstanding nominal amount
of the Fixed Rate Covered Bonds represented by such Global Covered Bond; or
(iii) in the case of Fixed Rate Covered Bonds in definitive form,
the Calculation Amount;
and in each case, multiplying such sum by the applicable Day Count Fraction,
and rounding the resultant figure to the nearest sub-unit of the relevant
Specified Currency, half of any such sub-unit being rounded upwards or
otherwise in accordance with applicable market convention. Where the
Specified Denomination of a Fixed Rate Covered Bond in definitive form is a
multiple of the Calculation Amount, the amount of interest payable in respect
of such Fixed Rate Covered Bond will be the product of the amount (determined
in the manner provided above) for the Calculation Amount and the amount by
which the Calculation Amount is multiplied to reach the Specified
Denomination, without any further rounding.
Day Count Fraction means, in respect of the calculation of an amount of
interest in relation to any Covered Bond for a period of time (from, and
including, the first day of such period to, but excluding, the last day of
such period) (whether or not constituting a Fixed Interest Period or an
Accrual Period, a Calculation Period) in accordance with this Condition 4(a):
(i) if Actual/Actual (ICMA) is specified in the Applicable
Final Terms:
(A) in the case of Covered Bonds where the number of days in the
relevant period from (and including) the most recent Interest Payment Date
(or, if none, the Interest Commencement Date) to (but excluding) the relevant
payment date (the Accrual Period) is equal to or shorter than the
Determination Period during which the Accrual Period ends, the number of days
in such Accrual Period divided by the product of (1) the number of days in
such Determination Period and (2) the number of Determination Dates (as
specified in the Applicable Final Terms) that would occur in one calendar
year; or
(B) in the case of Covered Bonds where the Accrual Period is
longer than the Determination Period during which the Accrual Period ends, the
sum of:
(1) the number of days in such Accrual Period falling in the
Determination Period in which the Accrual Period begins divided by the product
of (x) the number of days in such Determination Period and (y) the number of
Determination Dates that would occur in one calendar year; and
(2) the number of days in such Accrual Period falling in the
next Determination Period divided by the product of (x) the number of days in
such Determination Period and (y) the number of Determination Dates that would
occur in one calendar year;
(ii) if 30/360 is specified in the Applicable Final Terms, the
number of days in the period from (and including) the most recent Interest
Payment Date (or, if none, the Interest Commencement Date) to (but excluding)
the relevant payment date (such number of days being calculated on the basis
of a year of 360 days with 12 30-day months) divided by 360; and
(iii) if RBA Bond Basis or Australian Bond Basis is specified in
the Applicable Final Terms means one divided by the number of Interest Payment
Dates in a year or, where the Calculation Period does not constitute a Fixed
Interest Period, the actual number of days in the Calculation Period divided
by 365 (or, if any portion of the Calculation Period falls in a leap year, the
sum of:
(A) the actual number of days in that portion of the Calculation
Period falling in a leap year divided by 366; and
(B) the actual number of days in that portion of the Calculation
Period falling in a non-leap year divided by 365).
In these Conditions:
Determination Period means each period from (and including) a Determination
Date to (but excluding) the next Determination Date (including, where either
the Interest Commencement Date or the final Interest Payment Date is not a
Determination Date, the period commencing on the first Determination Date
prior to, and ending on the first Determination Date falling after, such
date).
Original Due for Payment Date means, in respect of the payment of Guaranteed
Amounts, prior to the occurrence of a Covered Bond Guarantor Event of Default
and following the delivery of a Notice to Pay on the Covered Bond Guarantor,
the date on which the Scheduled Payment Date in respect of such Guaranteed
Amounts occurs or, if later, the day which is two Business Days following the
date of service of a Notice to Pay on the Covered Bond Guarantor in respect of
such Guaranteed Amounts and the Scheduled Payment Date falling on the Final
Maturity Date of such Series of Covered Bonds as if such date had been the
Extended Due for Payment Date.
Principal Amount Outstanding means in respect of a Covered Bond on any day the
principal amount of that Covered Bond on the relevant Issue Date thereof less
principal amounts received by the relevant Covered Bondholder in respect
thereof on or prior to that day.
sub-unit means, with respect to any currency other than Euro, the lowest
amount of such currency that is available as legal tender in the country of
such currency and, with respect to Euro, Euro 0.01.
(b)
Interest on Floating Rate Covered Bonds
(i) Interest Payment Dates
Each Floating Rate Covered Bond bears interest on its Principal Amount
Outstanding from (and including) the Interest Commencement Date and such
interest will be payable in arrear on either:
(A) the Specified Interest Payment Date(s) in each year specified
in the Applicable Final Terms; or
(B) if no Specified Interest Payment Date(s) is/are specified in
the Applicable Final Terms, each date (each such date, together with each
Specified Interest Payment Date, an Interest Payment Date) which falls the
number of months or other period specified as the Specified Period in the
Applicable Final Terms after the preceding Interest Payment Date or, in the
case of the first Interest Payment Date, after the Interest Commencement Date.
Such interest will be payable in respect of each Interest Period. In these
Conditions, the expression Interest Period will mean the period from (and
including) an Interest Payment Date (or the Interest Commencement Date) to
(but excluding) the next (or first) Interest Payment Date.
If a Business Day Convention is specified in the Applicable Final Terms and
(x) if there is no numerically corresponding day in the calendar month in
which an Interest Payment Date should occur or (y) if any Interest Payment
Date would otherwise fall on a day which is not a Business Day, then, if the
Business Day Convention specified is:
(C) in any case where Specified Periods are specified in
accordance with Condition 4(b) (i)(B) above, the Floating Rate Convention,
such Interest Payment Date: (i) in the case of (x) above, will be the last day
that is a Business Day in the relevant month and the provisions of (B) below
will apply mutatis mutandis; or (ii) in the case of (y) above, will be
postponed to the next day which is a Business Day unless it would thereby fall
into the next calendar month, in which event (A) such Interest Payment Date
will be brought forward to the immediately preceding Business Day and (B) each
subsequent Interest Payment Date will be the last Business Day in the month
which falls the Specified Period after the preceding applicable Interest
Payment Date occurred; or
(D) the Following Business Day Convention, such Interest Payment
Date will be postponed to the next day which is a Business Day; or
(E) the Modified Following Business Day Convention, such Interest
Payment Date will be postponed to the next day which is a Business Day unless
it would thereby fall into the next calendar month, in which event such
Interest Payment Date will be brought forward to the immediately preceding
Business Day; or
(F) the Preceding Business Day Convention, such Interest Payment
Date will be brought forward to the immediately preceding Business Day.
In these Conditions, Business Day means a day which is:
I. a day on which commercial banks and foreign exchange
markets settle payments and are open for general business (including dealing
in foreign exchange and foreign currency deposits) in Sydney and, if the
Covered Bonds are not A$ Registered Covered Bonds, in London and any
Additional Business Centre specified in the Applicable Final Terms; and
II. either (1) in relation to any sum payable in a Specified
Currency other than Euro, a day on which commercial banks and foreign exchange
markets settle payments and are open for general business (including dealing
in foreign exchange and foreign currency deposits) in the principal financial
centre of the country of the relevant Specified Currency (if other than London
and any Additional Business Centre) and which if the Specified Currency is
Australian Dollars will be Sydney or (2) in relation to any Covered Bonds
denominated or payable in Euro, a day on which the Trans-European Automated
Real-Time Gross Settlement Express Transfer System or any successor or
replacement for that system (T2) is open.
(ii) Rate of Interest
The Rate of Interest payable from time to time in respect of Floating Rate
Covered Bonds will be determined in the manner specified in the Applicable
Final Terms.
(A) BBSW Rate Determination for Floating Rate Covered Bonds
(I) BBSW Rate Determination
(1) Where BBSW Rate Determination is specified in the Applicable
Final Terms as the manner in which the Rate of Interest is to be determined,
the Rate of Interest for each Interest Period will be the BBSW Rate plus or
minus (as indicated in the Applicable Final Terms) the Margin (if any).
(2) Each Covered Bondholder shall be deemed to acknowledge,
accept and agree to be bound by, and consents to, the determination of,
substitution for and any adjustments made to the BBSW Rate as described in
this Condition 4(b)(ii)(A)(I) and in Condition 4(b)(ii)(A)(II) below (in all
cases without the need for any Covered Bondholder consent). Any
determination, decision or election (including a decision to take or refrain
from taking any action or as to the occurrence or non-occurrence of any event
or circumstance), and any substitution for and adjustments made to the BBSW
Rate in accordance with this Condition 4(b)(ii)(A)(I) and Condition
4(b)(ii)(A)(II), will, in the absence of manifest or proven error, be
conclusive and binding on the Issuer, the Covered Bondholder and each Agent
and, notwithstanding anything to the contrary in these Conditions or other
documentation relating to the Covered Bonds, shall become effective without
the consent of any person.
(3) If the Calculation Agent is unwilling or unable to determine
a necessary rate, adjustment, quantum, formula, methodology or other variable
in order to calculate the applicable Rate of Interest, such rate, adjustment,
quantum, formula, methodology or other variable will be determined by the
Issuer (acting in good faith and in a commercially reasonable manner) or, an
alternate financial institution (acting in good faith and in a commercially
reasonable manner) appointed by the Issuer (in its sole discretion) to so
determine.
(4) All rates determined pursuant to this Condition
4(b)(ii)(A)(I) shall be expressed as a percentage rate per annum and the
resulting percentage will be rounded if necessary to the fourth decimal place
(i.e., to the nearest one ten-thousandth of a percentage point) with 0.0005
being rounded upwards.
(II) BBSW Rate Fallback
If:
(1) a Temporary Disruption Trigger has
occurred; or
(2) a Permanent Discontinuation Trigger
has occurred,
then the BBSW Rate for an Interest Period, whilst such Temporary Disruption
Trigger is continuing or after a Permanent Discontinuation Trigger has
occurred, means (in the following order of application and precedence):
(a) where BBSW Rate is the Applicable Benchmark Rate, if a
Temporary Disruption Trigger has occurred with respect to the BBSW Rate, in
the following order of precedence:
(x) first, the Administrator Recommended
Rate;
(y) then, the Supervisor Recommended
Rate; and
(z) lastly, the Final Fallback Rate;
(b) where AONIA is the Applicable Benchmark Rate or a
determination of the AONIA Rate is required for the purposes of sub-paragraph
(a) above, if a Temporary Disruption Trigger has occurred with respect to
AONIA, the rate for any day for which AONIA is required will be the last
provided or published level of AONIA;
(c) where a determination of the RBA Recommended Rate is
required for the purposes of sub-paragraph (a) or (b) above, if a Temporary
Disruption Trigger has occurred with respect to the RBA Recommended Rate, the
rate for any day for which the RBA Recommended Rate is required will be the
last rate provided or published by the Administrator of the RBA Recommended
Rate (or if no such rate has been so provided or published, the last provided
or published level of AONIA);
(d) where BBSW Rate is the Applicable Benchmark Rate, if a
Permanent Discontinuation Trigger has occurred with respect to the BBSW Rate,
the rate for any day for which the BBSW Rate is required on or after the
Permanent Fallback Effective Date will be the first rate available in the
following order of precedence:
(x) first, if at the time of the BBSW Rate Permanent Fallback
Effective Date, no AONIA Permanent Fallback Effective Date has occurred, the
AONIA Rate;
(y) then, if at the time of the BBSW Rate Permanent Fallback
Effective Date, an AONIA Permanent Fallback Effective Date has occurred, an
RBA Recommended Rate has been created but no RBA Recommended Rate Permanent
Fallback Effective Date has occurred, the RBA Recommended Fallback Rate; and
(z) lastly, if neither sub-paragraphs (x) nor paragraph (y)
above apply, the Final Fallback Rate;
(e) where AONIA is the Applicable Benchmark Rate or a
determination of the AONIA Rate is required for the purposes of sub-paragraph
(d)(x) above, if a Permanent Discontinuation Trigger has occurred with respect
to AONIA, the rate for any day for which AONIA is required on or after the
AONIA Permanent Fallback Effective Date will be the first rate available in
the following order of precedence:
(x) first, if at the time of the AONIA Permanent Fallback
Effective Date, an RBA Recommended Rate has been created but no RBA
Recommended Rate Permanent Fallback Effective Date has occurred, the RBA
Recommended Rate; and
(y) lastly, if sub-paragraph (x) above does not apply, the Final
Fallback Rate; and
(f) where a determination of the RBA Recommended Rate is
required for the purposes of sub-paragraphs (c) or (d) above, respectively, if
a Permanent Discontinuation Trigger has occurred with respect to the RBA
Recommended Rate, the rate for any day for which the RBA Recommended Rate is
required on or after that Permanent Fallback Effective Date will be the Final
Fallback Rate.
When calculating an amount of interest in circumstances where a Fallback Rate
other than the Final Fallback Rate applies, that interest will be calculated
as if references to the BBSW Rate or AONIA Rate (as applicable) were
references to that Fallback Rate. When calculating interest in circumstances
where the Final Fallback Rate applies, the amount of interest will be
calculated on the same basis as if the Applicable Benchmark Rate in effect
immediately prior to the application of that Final Fallback Rate remained in
effect but with necessary adjustments to substitute all references to that
Applicable Benchmark Rate with corresponding references to the Final Fallback
Rate.
(III) BBSW Rate Amendments
(1) If, at any time, a Permanent Discontinuation Trigger occurs
with respect to the Applicable Benchmark Rate that applies to the Covered
Bonds at that time (such event, a BBSW Rate Event), and the Issuer, acting in
good faith, in a commercially reasonable manner and by reference to such
sources as it deems appropriate, determines in its discretion that amendments
to these Conditions and/or any Programme Document are necessary to give effect
to the proper operation and application of the applicable Fallback Rate as
contemplated by
Condition 4(b)(ii)(A)(II) (such amendments, the BBSW Rate Amendments), then
the Issuer shall, subject to the following paragraphs of this Condition
4(b)(ii)(A)(III) and subject to the Issuer having to give notice thereof to
the Covered Bondholders in accordance with Condition 13 and to the Covered
Bond Guarantor, the Bond Trustee and the Calculaton Agent in accordance with
this Condition 4(b)(ii)(A)(III), without any requirement for the consent or
approval of Covered Bondholders, make the necessary modifications to these
Conditions and/or Programme Documents to give effect to such BBSW Rate
Amendments. At the written request of the Issuer, but subject to receipt by
the Bond Trustee, the Calculation Agent and the Principal Paying Agent of the
certificate referred to in Condition 4(b)(ii)(A)(III)(5), and subject as
provided below, the Bond Trustee shall (at the expense of the Issuer), without
any requirement for the consent or approval of Covered Bondholders and without
liability to the Covered Bondholders or any other person, be obliged to
concur, and shall be obliged to direct the Security Trustee to concur, with
the Issuer in effecting any BBSW Rate Amendments (including, inter alia, by
the execution of a deed supplemental to or amending the Bond Trust Deed or any
other Programme Document) with effect from the date specified in such notice.
(2) In connection with any such modifications in accordance with
this
Condition 4(b)(ii)(A)(III), if and for so long as the Covered Bonds are
admitted to trading and listed on the official list of a stock exchange, the
Issuer shall comply with the rules of that stock exchange.
(3) Notwithstanding any other provision of these Conditions or
the Programme Documents, neither the Bond Trustee, the Security Trustee nor
any Agent shall be obliged to concur with the Issuer and the Covered Bond
Guarantor, and/or (in the case of the Bond Trustee) direct the Security
Trustee to concur with the Issuer and the Covered Bond Guarantor in respect of
any BBSW Rate Amendments which, in the sole opinion of the Bond Trustee, the
Security Trustee or the relevant Agent (as applicable), would have the effect
of (i) exposing the Bond Trustee, the Security Trustee or the relevant Agent
(as applicable) to any liability against which it has not been indemnified
and/or secured and/or prefunded to its satisfaction; or (ii) imposing more
onerous or increasing the obligations or duties, responsibilities or
liabilities, or decreasing or amending the rights and/or protections, of the
Bond Trustee, the Security Trustee or the relevant Agent (as applicable) in
the Bond Trust Deed (including, for the avoidance of doubt, any supplemental
trust deed) and/or the Agency Agreements and/or these Conditions and/or any
other document to which they are a party.
(4) Any BBSW Rate Amendments determined under this
Condition 4(b)(ii)(A)(III) shall be notified promptly (in any case, not less
than five Business Days prior to the relevant Interest Determination Date) by
the Issuer to the Covered Bond Guarantor, the Bond Trustee, the Security
Trustee, the Calculation Agent, the Principal Paying Agent and, in accordance
with Condition 13, the Covered Bondholders. Such notice shall be irrevocable
and shall specify the effective date of such BBSW Rate Amendments.
(5) No later than notifying the Bond Trustee, the Security
Trustee, the Calculation Agent and the Principal Paying Agent of the same in
accordance with Condition 4(b)(ii)(A)(III)(4), the Issuer shall deliver to
each of the Bond Trustee, the Security Trustee, the Calculation Agent and the
Principal Paying Agent a certificate (on which the Bond Trustee, the
Calculation Agent and the Principal Paying Agent shall be entitled to rely
conclusively without further enquiry or liability) signed by two Authorised
Signatories:
(a) confirming (x) that a BBSW Rate Event has occurred and (y)
the specific terms of any BBSW Rate Amendments as determined in accordance
with the provisions of this Condition 4(b)(ii)(A)(III); and
(a) certifying that the BBSW Rate Amendments (in accordance with
the provisions of this Condition 4(b)(ii)(A)(III)) are necessary to give
effect to the proper operation and application of the applicable Fallback Rate
as contemplated by Condition 4(b)(ii)(A)(II).
The BBSW Rate Amendments specified in such certificate will (in the absence of
manifest error in the determination of the applicable Fallback Rate as
contemplated by Condition 4(b)(ii)(A)(II) and the BBSW Rate Amendments giving
effect to such Fallback Rate, and without prejudice to the ability of the Bond
Trustee, the Security Trustee, the Calculation Agent and the Principal Paying
Agent to rely conclusively on such certificate as aforesaid) be binding on the
Issuer, the Bond Trustee, the Calculation Agent and the Covered Bondholders.
(IV) Definitions
For the purposes of this Condition 4(b)(ii)(A),
Adjustment Spread means the adjustment spread as at the Adjustment Spread
Fixing Date (which may be a positive or negative value or zero and determined
pursuant to a formula or methodology) that is:
(a) determined as the median of the historical differences
between the BBSW Rate and AONIA over a five calendar year period prior to the
Adjustment Spread Fixing Date using practices based on those used for the
determination of the Bloomberg Adjustment Spread as at 1 December 2022,
provided that for so long as the Bloomberg Adjustment Spread is published and
determined based on the five year median of the historical differences between
the BBSW Rate and AONIA, that adjustment spread will be deemed to be
acceptable for the purposes of this paragraph (a); or
(b) if no such median can be determined in accordance with
paragraph (a), set using the method for calculating or determining such
adjustment spread determined by the Calculation Agent (after consultation with
the Issuer where practicable) to be appropriate;
Adjustment Spread Fixing Date means the first date on which a Permanent
Discontinuation Trigger occurs with respect to the BBSW Rate;
Administrator means:
(a) in respect of the BBSW Rate, ASX Benchmarks Limited (ABN 38
616 075 417);
(b) in respect of AONIA, the Reserve Bank of Australia; and
(c) in respect of any other Applicable Benchmark Rate, the
administrator for that rate or benchmark or, if there is no administrator, the
provider of that rate or benchmark,
and, in each case, any successor administrator or, as applicable, any
successor administrator or provider;
Administrator Recommended Rate means the rate formally recommended for use as
the temporary replacement for the BBSW Rate by the Administrator of the BBSW
Rate;
AONIA mean the Australian dollar interbank overnight cash rate (known as
AONIA);
AONIA Observation Period means the period from (and including) the date
falling five Business Days prior to the first day of the relevant Interest
Period (and the first Interest Period shall begin on and include the Interest
Commencement Date) and ending on (but excluding) the date falling five
Business Days prior to end of such Interest Period (or the date falling five
Business Days prior to such earlier date, if any, on which the Covered Bonds
become due and payable);
AONIA Rate means, for an Interest Period and in respect of an Interest
Determination Date, the rate determined by the Calculation Agent to be
Compounded Daily AONIA for that Interest Period and Interest Determination
Date plus the Adjustment Spread;
Applicable Benchmark Rate means the BBSW Rate and, if a Permanent Fallback
Effective Date has occurred with respect to the BBSW Rate, AONIA or the RBA
Recommended Rate, then the rate determined in accordance with Condition
4(b)(ii)(A)(II);
BBSW Rate means, for an Interest Period, the rate for prime bank eligible
securities having a tenor closest to the Interest Period which is designated
as the "AVG MID" on the 'Refinitiv Screen ASX29 Page' or the 'Bloomberg Screen
BBSW Page' (or any designation which replaces that designation on the
applicable page, or any replacement page) at the Publication Time on the first
Business Day of that Interest Period;
Bloomberg Adjustment Spread means the term adjusted AONIA spread relating to
the BBSW Rate provided by Bloomberg Index Services Limited (or a successor
provider as approved and/or appointed by ISDA from time to time as the
provider of term adjusted AONIA and the spread) (BISL) on the Fallback Rate
(AONIA) Screen (or by other means), or provided to, and published by,
authorised distributors where Fallback Rate (AONIA) Screen means the Bloomberg
Screen corresponding to the Bloomberg ticker for the fallback for the BBSW
Rate accessed via the Bloomberg Screen FBAK GO Page (or, if
applicable, accessed via the Bloomberg Screen HP GO ) or any
other published source designated by BISL;
Compounded Daily AONIA means, with respect to an Interest Period, the rate of
return of a daily compound interest investment during the AONIA Observation
Period corresponding to such Interest Period (with AONIA as the reference rate
for the calculation of interest) as calculated by the Calculation Agent on the
fifth Business Day prior to the last day of each Interest Period, as follows:
where:
means the per annum rate expressed as a decimal which is the level of AONIA
provided by the Administrator and published as of the Publication Time for the
Business Day falling five Business Days prior to such Business Day "";
is the number of calendar days in the relevant Interest Period;
is the number of Business Days in the relevant Interest Period;
is a series of whole numbers from 1 to d_0, each representing the relevant
Business Day in chronological order from (and including) the first Business
Day in the relevant Interest Period to (and including) the last Business Day
in such Interest Period;
for any Business Day "i", means the number of calendar days from (and
including) such Business Day "i" up to (but excluding) the following Business
Day; and
means any day on which commercial banks are open for general business in
Sydney.
If, for any reason, Compounded Daily AONIA needs to be determined for a period
other than an Interest Period, Compounded Daily AONIA is to be determined as
if that period were an Interest Period starting on (and including) the first
day of that period and ending on (but excluding) the last day of that period;
Fallback Rate means, where a Permanent Discontinuation Trigger for an
Applicable Benchmark Rate has occurred, the rate that applies to replace that
Applicable Benchmark Rate in accordance with Condition 4(b)(ii)(A)(II);
Final Fallback Rate means, in respect of an Applicable Benchmark Rate, the
rate:
(a) determined by the Calculation Agent as a commercially
reasonable alternative for the Applicable Benchmark Rate taking into account
all available information that, in good faith, it considers relevant, provided
that any rate (inclusive of any spreads or adjustments) implemented by central
counterparties and / or futures exchanges with representative trade volumes in
derivatives or futures referencing the Applicable Benchmark Rate will be
deemed to be acceptable for the purposes of this paragraph (a), together with
(without double counting) such adjustment spread (which may be a positive or
negative value or zero) that is customarily applied to the relevant successor
rate or alternative rate (as the case may be) in international debt capital
markets transactions to produce an industry-accepted replacement rate for
Benchmark Rate-linked floating rate notes at such time (together with such
other adjustments to the Business Day Convention, interest determination dates
and related provisions and definitions, in each case that are consistent with
accepted market practice for the use of such successor rate or alternative
rate for Benchmark Rate-linked floating rate notes at such time), or, if no
such industry standard is recognised or acknowledged, the method for
calculating or determining such adjustment spread determined by the
Calculation Agent (in consultation with the Issuer) to be appropriate;
provided that
(b) if and for so long as no such successor rate or alternative
rate can be determined in accordance with paragraph (a), the Final Fallback
Rate will be the last provided or published level of that Applicable Benchmark
Rate;
Interest Determination Date means, in respect of an Interest Period:
(a) where the BBSW Rate applies or the Final Fallback Rate
applies under sub-paragraph (d)(z) of Condition 4(b)(ii)(A)(II) of the
definition of Permanent Discontinuation Fallback, the first day of that
Interest Period; and
(b) otherwise, the fifth Business Day prior to the last day of
that Interest Period,
subject in each case to adjustment in accordance with the applicable Business
Day Convention;
Non-Representative means, in respect of an Applicable Benchmark Rate, that the
Supervisor of that Applicable Benchmark Rate if the Applicable Benchmark Rate
is the BBSW Rate, or the Administrator of the Applicable Benchmark Rate if the
Applicable Benchmark Rate is AONIA or the RBA Recommended Rate:
(a) has determined that such Applicable Benchmark Rate is no
longer, or as of a specified future date will no longer be, representative of
the underlying market and economic reality that such Applicable Benchmark Rate
is intended to measure and that representativeness will not be restored; and
(b) is aware that such determination will engage certain
contractual triggers for fallbacks activated by pre-cessation announcements by
such Supervisor (howsoever described) in contracts;
Permanent Discontinuation Trigger means, in respect of an Applicable Benchmark
Rate:
(a) a public statement or publication of information by or on
behalf of the Administrator of the Applicable Benchmark Rate announcing that
it has ceased or that it will cease to provide the Applicable Benchmark Rate
permanently or indefinitely, provided that, at the time of the statement or
publication, there is no successor administrator or provider, as applicable,
that will continue to provide the Applicable Benchmark Rate and, in the case
of the BBSW Rate, a public statement or publication of information by or on
behalf of the Supervisor of the BBSW Rate has confirmed that cessation;
(b) a public statement or publication of information by the
Supervisor of the Applicable Benchmark Rate, the Reserve Bank of Australia (or
any successor central bank for Australian dollars), an insolvency official or
resolution authority with jurisdiction over the Administrator of the
Applicable Benchmark Rate or a court or an entity with similar insolvency or
resolution authority over the Administrator of the Applicable Benchmark Rate
which states that the Administrator of the Applicable Benchmark Rate has
ceased or will cease to provide the Applicable Rate permanently or
indefinitely, provided that, at the time of the statement or publication,
there is no successor administrator or provider that will continue to provide
the Applicable Benchmark Rate and, in the case of the BBSW Rate and a public
statement or publication of information other than by the Supervisor, a public
statement or publication of information by or on behalf of the Supervisor of
the BBSW Rate has confirmed that cessation;
(c) a public statement by the Supervisor of the Applicable
Benchmark Rate if the Applicable Benchmark Rate is the BBSW Rate, or the
Administrator of the Applicable Benchmark Rate if the Applicable Benchmark
Rate is AONIA or the RBA Recommended Rate, as a consequence of which the
Applicable Benchmark Rate will be prohibited from being used either generally,
or in respect of the Covered Bonds, or that its use will be subject to
restrictions or adverse consequences to the Issuer or a Covered Bondholder;
(d) as a consequence of a change in law or directive arising
after the Issue Date of the first Tranche of Covered Bonds of a Series, it has
become unlawful for the Calculation Agent, the Issuer or any other party
responsible for calculations of interest under the Conditions to calculate any
payments due to be made to any Covered Bondholder using the Applicable
Benchmark Rate;
(e) a public statement or publication of information by the
Supervisor of the Applicable Benchmark Rate if the Applicable Benchmark Rate
is the BBSW Rate, or the Administrator of the Applicable Benchmark Rate if the
Applicable Benchmark Rate is AONIA or the RBA Recommended Rate, stating that
the Applicable Benchmark Rate is Non-Representative; or
(f) the Applicable Benchmark Rate has otherwise ceased to exist
or be administered on a permanent or indefinite basis;
Permanent Fallback Effective Date means, in respect of a Permanent
Discontinuation Trigger for an Applicable Benchmark Rate:
(a) in the case of paragraphs (a) and (b) of the definition of
"Permanent Discontinuation Trigger", the first date on which the Applicable
Benchmark Rate would ordinarily have been published or provided and is no
longer published or provided;
(b) in the case of paragraphs (c) and (d) of the definition of
"Permanent Discontinuation Trigger", the date from which use of the Applicable
Benchmark Rate is prohibited or becomes subject to restrictions or adverse
consequences or the calculation becomes unlawful (as applicable);
(c) in the case of paragraph (e) of the definition of "Permanent
Discontinuation Trigger", the first date on which the Applicable Benchmark
Rate would ordinarily have been published or provided but is
Non-Representative by reference to the most recent statement or publication
contemplated in that paragraph and even if such Applicable Benchmark Rates
continues to be published or provided on such date; or
(d) in the case of paragraph (f) of the definition of "Permanent
Discontinuation Trigger", the date that event occurs;
Publication Time means:
(a) in respect of the BBSW Rate, 12.00noon (Sydney time) or any
amended publication time for the final intraday refix of such rate specified
by the Administrator for the BBSW Rate in its benchmark methodology; and
(b) in respect of AONIA, 4.00pm (Sydney time) or any amended
publication time for the final intraday refix of such rate specified by the
Administrator for AONIA in its benchmark methodology;
RBA Recommended Fallback Rate has the same meaning given to AONIA Rate but
with necessary adjustments to substitute all references to AONIA with
corresponding references to the RBA Recommended Rate;
RBA Recommended Rate means, in respect of any relevant day (including any day
"i"), the rate (inclusive of any spreads or adjustments) recommended as the
replacement for AONIA by the Reserve Bank of Australia (which rate may be
produced by the Reserve Bank of Australia or another administrator) and as
provided by the Administrator of that rate or, if that rate is not provided by
the Administrator thereof, published by an authorised distributor in respect
of that day;
Supervisor means, in respect of an Applicable Benchmark Rate, the supervisor
or competent authority that is responsible for supervising that Applicable
Benchmark Rate or the Administrator of that Applicable Benchmark Rate, or any
committee officially endorsed or convened by any such supervisor or competent
authority that is responsible for supervising that Applicable Benchmark Rate
or the Administrator of that Applicable Benchmark Rate;
Supervisor Recommended Rate means the rate formally recommended for use as the
temporary replacement for the BBSW Rate by the Supervisor of the BBSW Rate;
Temporary Disruption Trigger means, in respect of any Applicable Benchmark
Rate which is required for any determination:
(a) the Applicable Benchmark Rate has not been published by the
applicable Administrator or an authorised distributor and is not otherwise
provided by the Administrator, in respect of, on, for or by the time and date
on which that Applicable Benchmark Rate is required; or
(b) the Applicable Benchmark Rate is published or provided but
the Calculation Agent determines that there is an obvious or proven error in
that rate.
(B)
Screen Rate Determination for Floating Rate Covered Bonds not referencing Compounded Daily SONIA
(1) Where Screen Rate Determination is specified in the Applicable
Final Terms as the manner in which the Rate of Interest is to be determined,
and unless the Reference Rate in respect of the relevant Series of Floating
Rate Covered Bonds is specified in the Applicable Final Terms as being
"Compounded Daily SONIA", the Rate of Interest for each Interest Period will,
subject as provided below, be either:
I. the offered quotation (if there is only one quotation on
the Relevant Screen Page); or
II. the arithmetic mean (rounded if necessary to the fifth
decimal place, with 0.000005 being rounded upwards of the offered quotations,
(expressed as a percentage rate per annum) for the Reference Rate which
appears or appear, as the case may be, on the Relevant Screen Page as at 11.00
a.m. (Brussels time, in the case of EURIBOR, or Hong Kong time, in the case of
HIBOR, or Singapore time, in the case of SIBOR) or as at 10.15 a.m. Toronto
time in the case of CDOR or as at 10.45 a.m. Auckland time (or at such other
time at which such rate customarily appears on that page) (BKBM Publication
Time) in the case of BKBM or as at 12.00 a.m. Oslo time, in the case of NIBOR,
on the Interest Determination Date in question plus or minus the Margin (if
any), all as determined by the Principal Paying Agent or other party
responsible for the calculation of the Rate of Interest as specified in the
Applicable Final Terms (and references in this Condition 4(b)(ii)(B) to
"Principal Paying Agent" shall be construed accordingly). If five or more of
such offered quotations are available on the Relevant Screen Page, the highest
(or, if there is more than one such highest quotation, one only of such
quotations) and the lowest (or, if there is more than one such lowest
quotation, one only of such quotations) will be disregarded by the Principal
Paying Agent for the purpose of determining the arithmetic mean (rounded as
provided above) of such offered quotations.
(2) If:
I. in the case of BKBM, the Relevant Screen Page is not
available or if the Reference Rate does not appear on the Relevant Screen Page
by 11.00 a.m. in the Relevant Financial Centre (or such other time that is 15
minutes after the then prevailing BKBM Publication Time in the Relevant
Financial Centre) then the Rate of Interest shall be determined in good faith
by the Issuer on the Interest Determination Date having regard to the rates
otherwise bid and offered at or around 11.00am in the Relevant Financial
Centre (or such other time that is 15 minutes after the then prevailing BKBM
Publication Time in the Relevant Financial Centre) on the Interest
Determination Date by participants in the BKBM trading window for New Zealand
bank bills having a tenor closest to the relevant Interest Period and such
Rate of Interest shall be notified to the Principal Paying Agent as soon as
practicable after its determination; or
II. otherwise, the Relevant Screen Page is not available or
if, in the case of Condition 4(b)(ii)(B)(1)(I), no such offered quotation
appears or, in the case of Condition 4(b)(ii)(B)(1)(II), fewer than three of
the offered quotations appear, in each case as at the Relevant Time, the
Issuer shall request each of the Reference Banks to provide the Principal
Paying Agent with its offered quotation (expressed as a percentage rate per
annum) for the Reference Rate at approximately the Relevant Time on the
Interest Determination Date in question. If two or more of the Reference Banks
provide the Principal Paying Agent with such offered quotations, the Rate of
Interest for such Interest Period shall be the arithmetic mean (rounded if
necessary to the fifth decimal place, with 0.000005 being rounded upwards) of
such offered quotations plus or minus (as indicated in the Applicable Final
Terms) the Margin (if any), all as determined by the Principal Paying Agent.
(3) If on any Interest Determination Date one only or none of
the Reference Banks provides the Principal Paying Agent with such an offered
quotation as provided in Condition 4(b)(ii)(B)(2)(III), the Rate of Interest
for the relevant Interest Period shall be the rate per annum which the
Principal Paying Agent determines as being the arithmetic mean (rounded as
provided above) of the rates, as communicated to (and at the request of) the
Issuer (who then communicates such rates to the Principal Paying Agent) by the
Reference Banks or any two or more of them, at which such banks were offered,
at approximately the Relevant Time on the relevant Interest Determination
Date, deposits in the Specified Currency for a period equal to that which
would have been used for the Reference Rate by leading banks in the Euro-zone
inter-bank market (if the Reference Rate is EURIBOR) or the Hong Kong
inter-bank market (if the Reference Rate is HIBOR) or the Toronto inter-bank
market (if the Reference Rate is CDOR) or the Singapore inter-bank market (if
the Reference Rate is SIBOR) or the Oslo inter-bank market (if the Reference
Rate is NIBOR) plus or minus (as appropriate) the Margin (if any) or, if fewer
than two of the Reference Banks provide the Principal Paying Agent with such
offered rates, either (as directed by the Issuer) the offered rate for
deposits in the Specified Currency for a period equal to that which would have
been used for the Reference Rate, or the arithmetic mean (rounded as provided
above) of the offered rates for deposits in the Specified Currency for a
period equal to that which would have been used for the Reference Rate, at
which, at approximately the Relevant Time on the relevant Interest
Determination Date, any one or more banks (which bank or banks is or are in
the opinion of the Issuer suitable for the purpose) informs the Principal
Paying Agent it is quoting to leading banks in the Euro-zone inter-bank market
(if the Reference Rate is EURIBOR) or the Hong Kong inter-bank market (if the
Reference Rate is HIBOR) or the Toronto inter-bank market (if the Reference
Rate is CDOR) or the Singapore inter-bank market (if the Reference Rate is
SIBOR) or the Oslo inter-bank market (if the Reference Rate is NIBOR) plus or
minus (as appropriate) the Margin (if any), provided that, if the Rate of
Interest cannot be determined in accordance with the foregoing provisions of
this Condition 4(b)(ii)(B), the Rate of Interest shall be that determined as
at the last preceding Interest Determination Date (though substituting, where
a different Margin, Maximum Rate of Interest and/or Minimum Rate of Interest
is to be applied to the relevant Interest Period from that which applied to
the last preceding Interest Period, the Margin, Maximum Rate of Interest
and/or Minimum Rate of Interest (as the case may be) relating to the relevant
Interest Period in place of the Margin, Maximum Rate of Interest and/or
Minimum Rate of Interest (as applicable) relating to that last preceding
Interest Period). For the purposes of these Conditions:
Interest Determination Date shall mean the date specified as such in the Final
Terms or if none is so specified:
(i) if the Reference Rate is HIBOR or CDOR, the first day of
each Interest Period;
(ii) if the Reference Rate is EURIBOR, the second day on which
T2 is open prior to the start of each Interest Period;
(iii) if the Reference Rate is SIBOR, the second Singapore
business day prior to the start of each Interest Period;
(iv) if the Reference Rate is BKBM, the first day of each Interest
Period; or
(v) if the Reference Rate is NIBOR, the second Oslo business day
prior to the start of each Interest Period.
Reference Banks shall mean (i) in the case of a determination of EURIBOR, the
principal Euro-zone office of four major banks in the Euro-zone inter-bank
market; (ii) in the case of a determination of HIBOR, four major banks in the
Hong Kong inter-bank market; (iii) in the case of a determination of CDOR,
four Canadian Schedule 1 chartered banks; (iv) in the case of a determination
of SIBOR, four major banks in the Singapore inter-bank market; and (v) in the
case of a determination of NIBOR, four major banks in the Oslo inter-bank
market, in each case selected by the Issuer or as specified in the Applicable
Final Terms.
Reference Rate shall mean (i) EURIBOR, (ii) HIBOR, (iii) CDOR, (iv) SIBOR, (v)
BKBM or (vi) NIBOR, in each case for the relevant period, as specified in the
Applicable Final Terms.
Relevant Financial Centre shall mean Brussels, in the case of a determination
of EURIBOR, Hong Kong, in the case of a determination of HIBOR, Toronto, in
the case of a determination of CDOR, Singapore, in the case of a determination
of SIBOR, Auckland, in the case of a determination of BKBM and Oslo, in the
case of a determination of NIBOR as specified in the Applicable Final Terms.
If the Relevant Screen Page is not available or if, in the case of (1) above, no such offered quotation appears or, in the case of (2) above, fewer than three such offered quotations appear, in each case as at the time specified in the preceding paragraph, the Rate of Interest will be determined as at the last preceding Interest Determination Date (though substituting, where a different Margin is to be applied to the relevant Interest Period from that which applied to the last preceding Interest Period, the Margin relating to the relevant Interest Period in place of the Margin relating to that last preceding Interest Period).
If the Reference Rate from time to time in respect of Floating Rate Covered
Bonds is specified in the Applicable Final Terms as being other than EURIBOR,
HIBOR, CDOR, SIBOR, BKBM or NIBOR, the Rate of Interest in respect of such
Covered Bonds will be determined as provided in the Applicable Final Terms.
(C) Screen Rate Determination for Floating Rate Covered Bonds
referencing Compounded Daily SONIA
(1) Where "Screen Rate Determination - SONIA" is specified in the
Applicable Final Terms as the manner in which the Rate of Interest is to be
determined and the Reference Rate is specified in the Applicable Final Terms
as being "Compounded Daily SONIA", the Rate of Interest for an Interest Period
will, subject as provided below, be the Compounded Daily SONIA Formula Rate
with respect to such Interest Period plus or minus (as indicated in the
Applicable Final Terms) the Margin (if any).
Compounded Daily SONIA Formula Rate means, with respect to an Interest Period,
the rate of return of a daily compound interest investment in Sterling (with
the Sterling Overnight Index Average as the reference rate for the calculation
of interest) as calculated by the Principal Paying Agent (or such other party
responsible for the calculation of the Rate of Interest, as specified in the
Applicable Final Terms) on the relevant Interest Determination Date in
accordance with the following formula (and the resulting percentage will be
rounded, if necessary, to the nearest fourth decimal place, with 0.00005 being
rounded upwards):
where:
d is the number of calendar days in:
(a) where "Lag" is specified as the Observation Method in the
Applicable Final Terms, the relevant Interest Period; or
(b) where "Observation Shift" is specified as the Observation
Method in the Applicable Final Terms, the relevant Observation Period;
d(o) is the number of London Banking Days in:
(a) where "Lag" is specified as the Observation Method in the
Applicable Final Terms, the relevant Interest Period; or
(b) where "Observation Shift" is specified as the Observation
Method in the Applicable Final Terms, the relevant Observation Period;
i is a series of whole numbers from one to d(o), each representing the
relevant London Banking Day in chronological order from, and including, the
first London Banking Day in:
(a) where "Lag" is specified as the Observation Method in the
Applicable Final Terms, the relevant Interest Period; or
(b) where "Observation Shift" is specified as the Observation
Method in the Applicable Final Terms, the relevant Observation Period;
London Banking Day means any day on which commercial banks are open for
general business (including dealing in foreign exchange and foreign currency
deposits) in London;
n(i), for any London Banking Day "i", means the number of calendar days from
(and including) such London Banking Day "i" up to (but excluding) the
following London Banking Day;
Observation Period means, in respect of an Interest Period, the period from
(and including) the date falling "p" London Banking Days prior to the first
day of the relevant Interest Period to (but excluding) the date falling "p"
London Banking Days prior to (I) the Interest Payment Date for such Interest
Period or (II) if applicable, the relevant payment date if the Covered Bonds
become due and payable on a date other than an Interest Payment Date;
p means:
(a) where "Lag" is specified as the Observation Method in the
Applicable Final Terms, the number of London Banking Days included in the "Lag
Lookback Period (p)" in the Applicable Final Terms (or, if no such number is
so specified, five London Banking Days); or
(b) where "Observation Shift" is specified as the Observation
Method in the Applicable Final Terms, the number of London Banking Days
included in the "Observation Shift Period" in the Applicable Final Terms (or,
if no such number is so specified, five London Banking Days);
the SONIA reference rate means, in respect of any London Banking Day, a
reference rate equal to the daily Sterling Overnight Index Average (SONIA)
rate for such London Banking Day as provided by the administrator of SONIA to
authorised distributors and as then published on the Relevant Screen Page (or,
if the Relevant Screen Page is unavailable, as otherwise published by such
authorised distributors) on the London Banking Day immediately following such
London Banking Day; and
SONIA(i) means, in respect of any London Banking Day "i":
(a) where "Lag" is specified as the Observation Method in the
Applicable Final Terms, the SONIA reference rate in respect of the London
Banking Day falling "p" London Banking Days prior to the relevant London
Banking Day "i"; or
(b) where "Observation Shift" is specified as the Observation
Method in the Applicable Final Terms, the SONIA reference rate in respect of
the relevant London Banking Day "i".
(2) For the purposes of Condition 4(b)(ii)(C), if, in respect of
any London Banking Day in the relevant Observation Period or the relevant
Interest Period, as applicable, the Principal Paying Agent (or such other
party responsible for the calculation of the Rate of Interest, as specified in
the Applicable Final Terms) determines that the applicable SONIA reference
rate has not been made available on the Relevant Screen Page or has not
otherwise been published by the relevant authorised distributors, then the
Principal Paying Agent (or such other party responsible for the calculation of
the Rate of Interest, as specified in the Applicable Final Terms, as
applicable) shall determine the SONIA reference rate in respect of such London
Banking Day as being:
(A) (i) the Bank of England's Bank Rate (the Bank Rate) prevailing
at 5.00 p.m. (or, if earlier, close of business) on such London Banking Day;
plus (ii) the mean of the spread of the SONIA reference rate to the Bank Rate
over the previous five London Banking Days on which a SONIA reference rate has
been published, excluding the highest spread (or, if there is more than one
highest spread, one only of those highest spreads) and the lowest spread (or,
if there is more than one lowest spread, one only of those lowest spreads) to
the Bank Rate; or
(B) if the Bank Rate under (A)(i) above is not available at the
relevant time, either (i) the SONIA reference rate published on the Relevant
Screen Page (or otherwise published by the relevant authorised distributors)
for the first preceding London Banking Day on which the SONIA reference rate
was published on the Relevant Screen Page (or otherwise published by the
relevant authorised distributors) or (ii) if this is more recent, the latest
rate determined under (A)(i) above.
(3) In the event that the Rate of Interest cannot be determined in
accordance with the foregoing provisions, the Rate of Interest shall be:
(A) that determined as at the last preceding Interest
Determination Date (though substituting, where a different Margin, Maximum
Rate of Interest and/or Minimum Rate of Interest is to be applied to the
relevant Interest Period from that which applied to the last preceding
Interest Period, the Margin, Maximum Rate of Interest and/or Minimum Rate of
Interest (as the case may be) relating to the relevant Interest Period, in
place of the Margin, Maximum Rate of Interest and/or Minimum Rate of Interest
(as applicable) relating to that last preceding Interest Period); or
(B) if there is no such preceding Interest Determination Date, the
initial Rate of Interest which would have been applicable to such Series of
Covered Bonds for the first scheduled Interest Period had the Covered Bonds
been in issue for a period equal in duration to the first scheduled Interest
Period but ending on (and excluding) the Interest Commencement Date (and
applying the Margin and, if applicable, any Maximum Rate of Interest and/or
Minimum Rate of Interest, applicable to the first scheduled Interest Period).
(4) If the relevant Series of Covered Bonds becomes due and
payable in accordance with Condition 9, the final Rate of Interest shall be
calculated for the period from (and including) the previous Interest Payment
Date to (but excluding) the date on which the Covered Bonds become so due and
payable, and such Rate of Interest shall continue to apply to the Covered
Bonds for so long as interest continues to accrue thereon as provided in
Condition 4(c) and the Bond Trust Deed.
(iii) Minimum Rate of Interest and/or Maximum Rate of Interest
If the Applicable Final Terms specifies a Minimum Rate of Interest for any
Interest Period, then, in the event that the Rate of Interest in respect of
such Interest Period determined in accordance with the provisions of paragraph
(ii) above is less than such Minimum Rate of Interest, the Rate of Interest
for such Interest Period will be such Minimum Rate of Interest.
If the Applicable Final Terms specifies a Maximum Rate of Interest for any
Interest Period, then, in the event that the Rate of Interest in respect of
such Interest Period determined in accordance with the provisions of paragraph
(ii) above is greater than such Maximum Rate of Interest, the Rate of Interest
for such Interest Period will be such Maximum Rate of Interest.
(iv)
Determination of Rate of Interest and calculation of Interest Amounts
The Principal Paying Agent (or such other party responsible for the
calculation of the Rate of Interest, as specified in the Applicable Final
Terms) and the Calculation Agent, in the case of Floating Rate Covered Bonds
which are A$ Registered Covered Bonds, will at or as soon as practicable after
each time at which the Rate of Interest is to be determined, determine the
Rate of Interest for the relevant Interest Period.
The Principal Paying Agent (or such other party as aforesaid) and the
Calculation Agent, in the case of Floating Rate Covered Bonds which are A$
Registered Covered Bonds, will calculate the amount of interest payable on the
Floating Rate Covered Bonds (each an Interest Amount) for the relevant
Interest Period. Each Interest Amount will be calculated by applying the
Rate of Interest to:
(A) in the case of Floating Rate Covered Bonds which are A$
Registered Covered Bonds, the Principal Amount Outstanding of the A$
Registered Covered Bond;
(B) in the case of Floating Rate Covered Bonds which are
represented by a Global Covered Bond, the aggregate outstanding nominal amount
of the Covered Bonds represented by such Global Covered Bond; or
(C) in the case of Floating Rate Covered Bonds in definitive form,
the Calculation Amount,
and, in each case multiplying such sum by the applicable Day Count Fraction,
and rounding the resultant figure to the nearest sub-unit of the relevant
Specified Currency, half of any such sub-unit being rounded upwards or
otherwise in accordance with applicable market convention. Where the
Specified Denomination of a Floating Rate Covered Bond in definitive form is a
multiple of the Calculation Amount, the Interest Amount payable in respect of
such Covered Bond will be the product of the amount (determined in the manner
provided above) for the Calculation Amount and the amount by which the
Calculation Amount is multiplied to reach the Specified Denomination, without
any further rounding.
If "Interest Amounts Non-Adjusted" is specified in the Applicable Final Terms
then notwithstanding the bringing forward or postponement (as applicable) of
an Interest Payment Date as a result of the application of the Business Day
Convention set out in the Applicable Final Terms, the Interest Amount in
respect of the relevant Interest Period and each subsequent Interest Period
will be calculated as stated above on the basis of the original Interest
Payment Dates without adjustment in accordance with the applicable Business
Day Convention.
Day Count Fraction means, in respect of the calculation of an amount of
interest for any Interest Period:
(A) if Actual/Actual or Actual/Actual (ISDA) is specified in the
Applicable Final Terms, the actual number of days in the Interest Period
divided by 365 (or, if any portion of that Interest Period falls in a leap
year, the sum of the actual number of days in that portion of the Interest
Period falling in a leap year divided by 366 and (B) the actual number of days
in that portion of the Interest Period falling in a non‑leap year divided by
365);
(B) if Actual/365 (Fixed) is specified in the Applicable Final
Terms, the actual number of days in the Interest Period divided by 365;
(C) if Actual/365 (Sterling) is specified in the Applicable Final
Terms, the actual number of days in the Interest Period divided by 365 or, in
the case of an Interest Payment Date falling in a leap year, 366;
(D) if Actual/360 is specified in the Applicable Final Terms, the
actual number of days in the Interest Period divided by 360;
(E) if 30/360, 360/360 or Bond Basis is specified in the
Applicable Final Terms, the number of days in the Interest Period divided by
360, calculated on a formula basis as follows:
where:
"Y1" is the year, expressed as a number, in which the first day of the
Interest Period falls;
"Y2" is the year, expressed as a number, in which the day immediately
following the last day of the Interest Period falls;
"M1" is the calendar month, expressed as a number, in which the first day of
the Interest Period falls;
"M2" is the calendar month, expressed as a number, in which the day
immediately following the last day of the Interest Period falls;
"D1" is the first calendar day, expressed as a number, of the Interest Period,
unless such number is 31, in which case D1 will be 30; and
"D2" is the calendar day, expressed as a number, immediately following the
last day included in the Interest Period, unless such number would be 31 and
D1 is greater than 29, in which case D2 will be 30;
(F) if 30E/360 or Eurobond Basis is specified in the Applicable
Final Terms, the number of days in the Interest Period divided by 360,
calculated on a formula basis as follows:
where:
"Y1" is the year, expressed as a number, in which the first day of the
Interest Period falls;
"Y2" is the year, expressed as a number, in which the day immediately
following the last day of the Interest Period falls;
"M1" is the calendar month, expressed as a number, in which the first day of
the Interest Period falls;
"M2" is the calendar month, expressed as a number, in which the day
immediately following the last day of the Interest Period falls;
"D1" is the first calendar day, expressed as a number, of the Interest Period,
unless such number would be 31, in which case D1 will be 30;
"D2" is the calendar day, expressed as a number, immediately following the
last day included in the Interest Period, unless such number would be 31 and
D1 is greater than 29, in which case D2 will be 30; and
(G) if 30E/360 (ISDA) is specified in the Applicable Final Terms,
the number of days in the Interest Period divided by 360, calculated on a
formula basis as follows:
where:
"Y1" is the year, expressed as a number, in which the first day of the
Interest Period falls;
"Y2" is the year, expressed as a number, in which the day immediately
following the last day of the Interest Period falls;
"M1" is the calendar month, expressed as a number, in which the first day of
the Interest Period falls;
"M2" is the calendar month, expressed as a number, in which the day
immediately following the last day of the Interest Period falls;
"D1" is the first calendar day, expressed as a number, of the Interest Period,
unless (i) that day is the last day of February or (ii) such number would be
31, in which case D1 will be 30;
"D2" is the calendar day, expressed as a number, immediately following the
last day of the Interest Period, unless (i) that day is the last day of
February but not the due date for redemption or (ii) such number would be 31,
in which case D2 will be 30.
(v)
Linear Interpolation
Where Linear Interpolation is specified as applicable in respect of an
Interest Period in the Applicable Final Terms, the Rate of Interest for such
Interest Period shall be calculated by the Principal Paying Agent (or such
other party responsible for the calculation of the Rate of Interest, as
specified in the Applicable Final Terms) by straight line linear interpolation
by reference to two rates based on the relevant Reference Rate, one of which
shall be determined as if the Designated Maturity were the period of time for
which rates are available next shorter than the length of the relevant
Interest Period and the other of which shall be determined as if the
Designated Maturity were the period of time for which rates are available next
longer than the length of the relevant Interest Period provided however that
if there is no rate available for a period of time next shorter or, as the
case may be, next longer, then the Principal Paying Agent shall determine such
rate at such time and by reference to such sources as it determines
appropriate.
Designated Maturity means, in relation to Screen Rate Determination, the
period of time designated in the Reference Rate.
(vi) Notification of Rate of Interest and Interest Amounts
(1) Except where the Reference Rate is specified in the Applicable
Final Terms as being "Compounded Daily SONIA", the Principal Paying Agent (or
such other party responsible for the calculation of the Rate of Interest, as
specified in the Applicable Final Terms) and the Calculation Agent, in the
case of Floating Rate Covered Bonds which are A$ Registered Covered Bonds,
will cause the Rate of Interest and each Interest Amount for each Interest
Period and the relevant Interest Payment Date to be notified to the Bond
Trustee and to any stock exchange (provided that the Issuer has provided the
Principal Paying Agent and Calculation Agent with all necessary contact
details) on which the relevant Floating Rate Covered Bonds are for the time
being listed, quoted and/or traded or by which they have been admitted to
listing and to be notified in accordance with Condition 13 as soon as possible
after their determination but in no event later than the fourth Business Day
(as defined in Condition 4(b)(i)). Each Interest Amount and Interest Payment
Date so notified may subsequently be amended (or appropriate alternative
arrangements made by way of adjustment) without notice in the event of an
extension or shortening of the Interest Period. Any such amendment or
alternative arrangements will be promptly notified to the Bond Trustee and
each stock exchange (provided that the Issuer has provided the Principal
Paying Agent and Calculation Agent with all necessary contact details) on
which the relevant Floating Rate Covered Bonds are for the time being listed
or by which they have been admitted to listing and to the Covered Bondholders
in accordance with Condition 13.
(2) Where the Reference Rate is specified in the Applicable Final
Terms as being "Compounded Daily SONIA", the Principal Paying Agent (or such
other party responsible for the calculation of the Rate of Interest, as
specified in the Applicable Final Terms) will cause the Rate of Interest and
each Interest Amount for each Interest Period and the relevant Interest
Payment Date to be notified to (i) the Issuer and the Bond Trustee, and (ii)
to any stock exchange on which the relevant Floating Rate Covered Bonds are
for the time being listed and, in each case, to be published in accordance
with Condition 13 as soon as possible after their determination but in no
event later than the second London Banking Day (as defined in Condition
4(b)(ii)(C)(1) above) thereafter. Each Rate of Interest, Interest Amount and
Interest Payment Date so notified may subsequently be amended (or appropriate
alternative arrangements made by way of adjustment) without notice in the
event of an extension or shortening of the relevant Interest Period. Any such
amendment or alternative arrangements will promptly be notified to the Bond
Trustee and to any stock exchange on which the relevant Floating Rate Covered
Bonds are for the time being listed and to the Covered Bondholders in
accordance with Condition 13.
(vii) Determination or Calculation by Bond Trustee
If for any reason at any relevant time after the Issue Date, the Principal
Paying Agent or, as the case may be, the Calculation Agent defaults in its
obligation to determine the Rate of Interest or the Principal Paying Agent or
the Calculation Agent defaults in its obligation to calculate any Interest
Amount in accordance with subparagraph (ii) above or as otherwise specified in
the Applicable Final Terms, as the case may be, and in each case in accordance
with paragraph (iv) above, the Issuer may appoint an agent to determine the
Rate of Interest at such rate as, in its absolute discretion (having such
regard as it thinks fit to the foregoing provisions of this Condition, but
subject always to any Minimum Rate of Interest or Maximum Rate of Interest
specified in the Applicable Final Terms), it deems fair and reasonable in all
the circumstances or, as the case may be, the Issuer may appoint an agent to
calculate the Interest Amount(s) in such manner as it deems fair and
reasonable. In order to make any such determination or calculation, the
Issuer may appoint and rely on a determination or calculation by a calculation
agent (which must be an investment bank or other suitable entity of
international repute). Each such determination or calculation will be deemed
to have been made by the Principal Paying Agent or the Calculation Agent, as
the case may be.
(viii) Certificates to be final
All certificates, communications, opinions, determinations, calculations,
quotations and decisions given, expressed, made or obtained for the purposes
of the provisions of this Condition 4(b), whether by the Principal Paying
Agent (or such other party responsible for the calculation of the Rate of
Interest, as specified in the Applicable Final Terms, as applicable) or the
Calculation Agent or the Bond Trustee will (in the absence of wilful default,
bad faith or manifest error or proven error) be binding on the Issuer, the
Covered Bond Guarantor, the Principal Paying Agent, the Calculation Agent, the
other Paying Agents, the Bond Trustee and all the Covered Bondholders and
Couponholders and (in the absence of wilful default or bad faith or proven
error) no liability to the Issuer the Covered Bond Guarantor, the Covered
Bondholders or the Couponholders will attach to the Principal Paying Agent (or
such other party as aforesaid) or the Calculation Agent or the Bond Trustee in
connection with the exercise or non‑exercise by it of its powers, duties and
discretions pursuant to such provisions.
(c) Accrual of interest
Interest (if any) will cease to accrue on each Covered Bond (or in the case of
the redemption of part only of a Covered Bond, that part only of such Covered
Bond) on the due date for redemption thereof unless, upon due presentation
thereof, payment of principal is improperly withheld or refused or default is
otherwise made in the payment thereof, in which event interest will continue
to accrue as provided in the Bond Trust Deed.
5. Payments
(a) Method of payment
Subject as provided below:
(i) payments in a Specified Currency other than Euro will be
made by credit or electronic transfer to an account in the relevant Specified
Currency maintained by the payee with, or, at the option of the payee, by a
cheque in such Specified Currency drawn on, a bank in the principal financial
centre of the country of such Specified Currency (which, if the Specified
Currency is Australian Dollars, will be Sydney); and
(ii) payments in Euro will be made by credit or electronic
transfer to a Euro account (or any other account to which Euro may be credited
or transferred) specified by the payee or, at the option of the payee, by a
Euro cheque.
Payments will be subject in all cases to (A) any fiscal or other laws and
regulations applicable thereto in the place of payment but without prejudice
to the provisions of Condition 7 and (B) any deduction or withholding required
pursuant to an agreement described in Section 1471(b) of the Internal Revenue
Code of 1986 (the Code) or otherwise imposed pursuant to Sections 1471 through
1474 of the Code, any regulations or agreements thereunder, any official
interpretations thereof or any law implementing an intergovernmental approach
thereto. References to Specified Currency will include any successor
currency under applicable law.
(b) Presentation of Bearer Definitive Covered Bonds and Coupons
Payments of principal and interest (if any) in respect of Bearer Definitive
Covered Bonds will (subject as provided below) be made in the manner provided
in Condition 5(a) above only against presentation and surrender of Bearer
Definitive Covered Bonds or Coupons, as the case may be, at any specified
office of any Paying Agent outside the United States (which expression, as
used herein, means the United States of America (including the States and the
District of Columbia, its territories, its possessions and other areas subject
to its jurisdiction)).
Fixed Rate Covered Bonds in definitive bearer form (other than Long Maturity
Covered Bonds) should be presented for payment together with all unmatured
Coupons appertaining thereto (which expression will include Coupons falling to
be issued on exchange of matured Talons), failing which an amount equal to the
face value of any missing unmatured Coupon (or, in the case of payment not
being made in full, the same proportion of the amount of such missing
unmatured Coupon as the sum so paid bears to the total amount due) will be
deducted from the amount due for payment. Each amount of principal so
deducted will be paid in the manner mentioned above against surrender of the
relative missing Coupon at any time before the expiry of ten years after the
Relevant Date (as defined in Condition 7) in respect of such principal
(whether or not such Coupon would otherwise have become void under Condition
8) or, if later, five years from the date on which such Coupon would otherwise
have become due, but in no event thereafter.
Upon amounts in respect of any Fixed Rate Covered Bond in definitive bearer
form becoming due and repayable by the Issuer (in the absence of a Notice to
Pay) or the Covered Bond Guarantor under the Covered Bond Guarantee prior to
its Final Maturity Date (or, as the case may be, Extended Due for Payment
Date), all unmatured Talons (if any) appertaining thereto will become void and
no further Coupons will be issued in respect thereof.
Upon the due date for redemption of any Floating Rate Covered Bond or Long
Maturity Covered Bond in definitive bearer form, all unmatured Coupons and
Talons (if any) relating thereto (whether or not attached) will become void
and no payment or, as the case may be, exchange for further Coupons will be
made in respect thereof. A Long Maturity Covered Bond is a Fixed Rate
Covered Bond (other than a Fixed Rate Covered Bond which on issue had a Talon
attached) whose nominal amount on issue is less than the aggregate interest
payable thereon provided that such Covered Bond will cease to be a Long
Maturity Covered Bond on the Interest Payment Date on which the aggregate
amount of interest remaining to be paid after that date is less than the
Principal Amount Outstanding of such Covered Bond. If the date for
redemption of any Bearer Definitive Covered Bond is not an Interest Payment
Date, interest (if any) accrued in respect of such Covered Bond from (and
including) the preceding Interest Payment Date or, as the case may be, the
Interest Commencement Date will be payable only against surrender of the
relevant Bearer Definitive Covered Bond.
(c) Payments in respect of Bearer Global Covered Bonds
Payments of principal and interest (if any) in respect of Covered Bonds
represented by any Bearer Global Covered Bond will (subject as provided below)
be made in the manner specified above in relation to Bearer Definitive Covered
Bonds and otherwise in the manner specified in the relevant Global Covered
Bond (against presentation or surrender, as the case may be, of such Global
Covered Bond at the specified office of any Paying Agent outside the United
States). On the occasion of each payment, a record of such payment made on
such Bearer Global Covered Bond, distinguishing between any payment of
principal and any payment of interest, will be made on such Bearer Global
Covered Bond by the Paying Agent and such record will be prima facie evidence
that the payment in question has been made.
(d) Payments in respect of Registered Covered Bonds
Payments of principal in respect of each Registered Covered Bond (whether or
not in global form) will be made against presentation and surrender (or, in
the case of part payment of any sum due, endorsement) of the Registered
Covered Bond at the specified office of the relevant Registrar or the Paying
Agents. Such payments will be made by electronic transfer to the Designated
Account (as defined below) of the holder (or the first named of joint holders)
of the Registered Covered Bond appearing in the Register of holders of the
Registered Covered Bonds maintained by the relevant Registrar at the close of
business on the third Business Day (being for this purpose a day on which
banks are open for business in the city where the specified office of the
Registrar is located) before the relevant due date. Notwithstanding the
previous sentence, if (i) a holder does not have a Designated Account or (ii)
the principal amount of the Covered Bonds held by a holder is less than
US$250,000 (or its approximate equivalent in any other Specified Currency),
payment will instead be made by a cheque in the Specified Currency drawn on a
Designated Bank (as defined below). For these purposes, Designated Account
means the account (which, in the case of a payment in Japanese yen to a
non-resident of Japan, will be a non-resident account) maintained by a holder
with a Designated Bank and identified as such in the Register and Designated
Bank means (in the case of payment in a Specified Currency other than Euro) a
bank in the principal financial centre of the country of such Specified
Currency (which, if the Specified Currency is Australian Dollars will be
Sydney) and (in the case of a payment in Euro) any bank which processes
payments in Euro.
Payments of interest in respect of each Registered Covered Bond (whether or
not in global form) will be made by a cheque in the Specified Currency drawn
on a Designated Bank and mailed by uninsured mail to the holder (or the first
named of joint holders) of the Registered Covered Bond appearing in the
Register at the close of business on (i) in the case of Global Covered Bonds
in registered form, the Business Day prior to the relevant due date and (ii)
in the case of Registered Definitive Covered Bonds, the Business Day falling
15 days prior to the relevant due date (the Record Date) at the holder's
address shown in the Register on the Record Date and at the holder's risk.
Upon application of the holder to the specified office of the relevant
Registrar not less than three Business Days before the due date for any
payment of interest in respect of a Registered Covered Bond, the payment may
be made by electronic transfer on the due date in the manner provided in the
preceding paragraph. Any such application for electronic transfer will be
deemed to relate to all future payments of interest (other than interest due
on redemption) in respect of the Registered Covered Bonds which become payable
to the holder who has made the initial application until such time as the
relevant Registrar is notified in writing to the contrary by such holder.
Payment of the interest due in respect of each Registered Covered Bond on
redemption will be made in the same manner as payment of the principal in
respect of such Registered Covered Bond.
Holders of Registered Covered Bonds will not be entitled to any interest or
other payment for any delay in receiving any amount due in respect of any
Registered Covered Bond as a result of a cheque posted in accordance with this
Condition arriving after the due date for payment or being lost in the post.
No commissions or expenses will be charged to such holders by the relevant
Registrar in respect of any payments of principal or interest in respect of
the Registered Covered Bonds.
None of the Issuer, the Covered Bond Guarantor, the Bond Trustee or the Agents
will have any responsibility or liability for any aspect of the records
relating to, or payments made on account of, beneficial ownership interests in
the Registered Global Covered Bonds or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
(e) Payments in respect of A$ Registered Covered Bonds
Payments of principal in respect of each A$ Registered Covered Bond will be
made to the person who is the holder of the A$ Registered Covered Bond at
10.00 am in the place where the A$ Register in relation to the A$ Registered
Covered Bonds is maintained on the due date.
Payments of interest in respect of each A$ Registered Covered Bond will be
made to the person who is the holder of the A$ Registered Covered Bond at 4.00
pm in the place where the A$ Register in relation to the A$ Registered Covered
Bonds is maintained on the A$ Record Date.
Payment of the interest due in respect of each A$ Registered Covered Bond on
the redemption will be made in the same manner as payment of principal in
respect of each A$ Registered Covered Bond.
If the A$ Registered Covered Bond is lodged in the Austraclear System,
payments in respect of the A$ Registered Covered Bonds will be by transfer to
the relevant account of the holder of the beneficial interest in the A$
Registered Covered Bond in accordance with the Austraclear Regulations.
If the A$ Registered Covered Bond is not lodged in the Austraclear System,
payments in respect of the A$ Registered Covered Bonds will be made by
crediting on the relevant due date, the amount due to the account previously
notified by the holder of the A$ Registered Covered Bond to the Issuer and the
A$ Registrar. If the holder of the A$ Registered Covered Bond has not
notified the Issuer and the A$ Registrar of an account to which payments to it
must be made by close of business in the place where the A$ Register is
maintained on the A$ Record Date, the payments will be made by a cheque in
Australian Dollars and mailed by uninsured prepaid ordinary mail on the AU
Business Day immediately before the relevant due date to the holder (or the
first named of joint holders) of the A$ Registered Covered Bond at the
holder's address shown in the A$ Register on the A$ Record Date and at the
holder's risk.
No payment of interest in respect of an A$ Registered Covered Bond will be
made to an address in the United States or transferred to an account
maintained by the holder of the A$ Registered Covered Bond in the United
States.
Holders of A$ Registered Covered Bonds will not be entitled to any interest or
other payment for any delay in receiving any amount due in respect of any A$
Registered Covered Bond as a result of a cheque posted in accordance with this
Condition arriving after the due date for payment or being lost in the post.
No commissions or expenses will be charged to such holders by the A$ Registrar
in respect of any payments of principal or interest in respect of the A$
Registered Covered Bonds.
None of the Issuer, the Covered Bond Guarantor or the Bond Trustee will have
any responsibility or liability for any aspect of the records relating to, or
payments made on account of, beneficial ownership interests in the A$
Registered Covered Bonds or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.
(f) General provisions applicable to payments
The holder of a Global Covered Bond (or, as provided in the Bond Trust Deed,
the Bond Trustee) will be the only person entitled to receive payments in
respect of Covered Bonds represented by such Global Covered Bond and the
Issuer or, as the case may be, the Covered Bond Guarantor will be discharged
by payment to, or to the order of, the holder of such Global Covered Bond (or
the Bond Trustee, as the case may be) in respect of each amount so paid.
Each of the persons shown in the records of Euroclear or Clearstream,
Luxembourg as the beneficial holder of a particular nominal amount of Covered
Bonds represented by such Global Covered Bond must look solely to Euroclear or
Clearstream, Luxembourg, as the case may be, for his share of each payment so
made by the Issuer or the Covered Bond Guarantor to, or to the order of, the
holder of such Global Covered Bond (or the Bond Trustee, as the case may
be). No person other than the holder of the relevant Global Covered Bond
(or, as provided in the Bond Trust Deed, the Bond Trustee) will have any claim
against the Issuer or the Covered Bond Guarantor in respect of any payments
due on that Global Covered Bond.
Notwithstanding the foregoing provisions of this Condition, payments of
principal and/or interest in U.S. dollars in respect of the Bearer Covered
Bonds will only be made at the specified office of a Paying Agent in the
United States if:
(i) the Issuer has appointed Paying Agents with specified
offices outside the United States with the reasonable expectation that such
Paying Agents would be able to make payment in U.S. dollars at such specified
offices outside the United States of the full amount of interest on the Bearer
Covered Bonds in the manner provided above when due;
(ii) payment of the full amount of such principal and interest
at such specified offices outside the United States is illegal or effectively
precluded by exchange controls or other similar restrictions on the full
payment or receipt of principal and interest in U.S. dollars; and
(iii) such payment is then permitted under United States law
without involving, in the opinion of the Issuer and the Trust Manager, adverse
tax consequences to the Issuer or the Covered Bond Guarantor.
(g) Payment Day
If the date for payment of any amount in respect of any Covered Bond or Coupon
is not a Payment Day (as defined below), the holder thereof will not be
entitled to payment of the relevant amount due until the next following
Payment Day and will not be entitled to any interest or other sum in respect
of any such delay. In this Condition (unless otherwise specified in the
Applicable Final Terms), Payment Day means any day which (subject to Condition
8) is:
(i) a day on which commercial banks and foreign exchange
markets settle payments and are open for general business (including dealing
in foreign exchange and foreign currency deposits) in:
(A) the relevant place of presentation;
(B) Sydney and, in the case of Covered Bonds that are not A$
Registered Covered Bonds, London; and
(C) any Additional Financial Centre specified in the Applicable
Final Terms; and
(ii) either (1) in relation to any sum payable in a Specified
Currency other than Euro, a day on which commercial banks and foreign exchange
markets settle payments and are open for general business (including dealing
in foreign exchange and foreign currency deposits) in the principal financial
centre of the country of the relevant Specified Currency (if other than the
places specified in Condition 5(g)(i) and which, if the Specified Currency is
Australian Dollars, will be Sydney) or (2) in relation to any sum payable in
Euro, a day on which T2 is open.
(h) Interpretation of principal and interest
Any reference in these Conditions to principal in respect of the Covered Bonds
will be deemed to include, as applicable:
(i) any additional amounts which may be payable with respect
to principal under Condition 7 or under any undertakings or covenants given
in addition thereto, or in substitution therefor, pursuant to the Bond Trust
Deed;
(ii) the Final Redemption Amount of the Covered Bonds;
(iii) the Early Redemption Amount of the Covered Bonds;
(iv) the Optional Redemption Amount(s) (if any) of the Covered
Bonds;
(v) any premium and any other amounts (other than interest)
which may be payable under or in respect of the Covered Bonds; and
(vi) any Excess Proceeds which may be payable by the Bond Trustee
under or in respect of the Covered Bonds.
Any reference in these Conditions to interest in respect of the Covered Bonds
will be deemed to include, as applicable, any additional amounts which may be
payable with respect to interest under Condition 7 or under any undertakings
given in addition thereto, or in substitution therefor, pursuant to the Bond
Trust Deed.
(i) Redenomination
Where redenomination is specified in the Applicable Final Terms as being
applicable, the Issuer may, without the consent of the Covered Bondholders and
the Couponholders, on giving prior written notice to the Bond Trustee, the
Security Trustee, the Principal Paying Agent, the Registrar (in the case of
Registered Covered Bonds), Euroclear and Clearstream, Luxembourg and at least
30 days' prior notice to the Covered Bondholders in accordance with Condition
13, elect that, with effect from the Redenomination Date specified in the
notice, the Covered Bonds will be redenominated in Euro. In relation to any
Covered Bonds where the Applicable Final Terms provides for a minimum
Specified Denomination in the Specified Currency which is equivalent to at
least Euro 100,000 and which are admitted to trading on a regulated market in
the European Economic Area, it will be a term of any such redenomination that
the holder of any Covered Bonds held through Euroclear and/or Clearstream,
Luxembourg must have credited to its securities account with the relevant
clearing system a minimum balance of Covered Bonds of at least Euro 100,000.
The election will have effect as follows:
(i) the Covered Bonds will be deemed to be redenominated in
Euro in the denomination of Euro 0.01 with a nominal amount for each Covered
Bond equal to the nominal amount of that Covered Bond in the Specified
Currency, converted into Euro at the Established Rate, provided that, if the
Issuer determines, in consultation with the Principal Paying Agent and the
Bond Trustee, that the then market practice in respect of the redenomination
in Euro of internationally offered securities is different from the provisions
specified above, such provisions will be deemed to be amended so as to comply
with such market practice and the Issuer will promptly notify the Covered
Bondholders, the competent listing authority, stock exchange and/or market (if
any) on or by which the Covered Bonds may be listed and/or admitted to trading
and the Paying Agents of such deemed amendments;
(ii) save to the extent that an Exchange Notice has been given
in accordance with paragraph (iv) below, the amount of interest due in respect
of the Covered Bonds will be calculated by reference to the aggregate nominal
amount of Covered Bonds presented (or, as the case may be, in respect of which
Coupons are presented) for payment by the relevant holder and the amount of
such payment will be rounded down to the nearest Euro 0.01;
(iii) if Definitive Covered Bonds are required to be issued after
the Redenomination Date, they will be issued at the expense of the Issuer in
the denominations of Euro 100,000 and/or such higher amounts as the Principal
Paying Agent may determine and notify to the Covered Bondholders and any
remaining amounts less than Euro 100,000 will be redeemed by the Issuer and
paid to the Covered Bondholders in Euro in accordance with Condition 6;
(iv) if issued prior to the Redenomination Date, all unmatured
Coupons denominated in the Specified Currency (whether or not attached to the
Covered Bonds) will become void with effect from the date on which the Issuer
gives notice (the Exchange Notice) that replacement Euro-denominated Covered
Bonds and Coupons are available for exchange (provided that such securities
are so available) and no payments will be made in respect of them. The
payment obligations contained in any Covered Bonds and Coupons so issued will
also become void on that date although those Covered Bonds and Coupons will
continue to constitute valid exchange obligations of the Issuer. New
Euro-denominated Covered Bonds and Coupons will be issued in exchange for
Covered Bonds and Coupons denominated in the Specified Currency in such manner
as the Principal Paying Agent may specify and as will be notified to the
Covered Bondholders in the Exchange Notice. No Exchange Notice may be given
less than 15 days prior to any date for payment of principal or interest on
the Covered Bonds;
(v) after the Redenomination Date, all payments in respect of
the Covered Bonds and the Coupons, other than payments of interest in respect
of periods commencing before the Redenomination Date, will be made solely in
Euro as though references in the Covered Bonds to the Specified Currency were
to Euro. Payments will be made in Euro by credit or transfer to a Euro
account (or any other account to which Euro may be credited or transferred)
specified by the payee or, at the option of the payee, by a Euro cheque;
(vi) if the Covered Bonds are Fixed Rate Covered Bonds and
interest for any period ending on or after the Redenomination Date is required
to be calculated for a period ending other than on an Interest Payment Date,
it will be calculated:
(A) in the case of Covered Bonds represented by a Global Covered
Bond, by applying the Rate of Interest to the aggregate outstanding nominal
amount of the Covered Bonds represented by such Global Covered Bonds; and
(B) in the case of Definitive Covered Bonds, by applying the Rate
of Interest to the Calculation Amount,
and, in each case, multiplying such sum by the applicable Day Count Fraction,
and rounding the resultant figure to the nearest sub-unit of the relevant
Specified Currency, half of any such sub-unit being rounded upwards or
otherwise in accordance with applicable market convention. Where the
Specified Denomination of a Fixed Rate Covered Bond in definitive form is a
multiple of the Calculation Amount, the amount of interest payable in respect
of such Fixed Rate Covered Bond will be the product of the amount (determined
in the manner provided above) for the Calculation Amount and the amount by
which the Calculation Amount is multiplied to reach the Specified
Denomination, without any further rounding;
(vii) if the Covered Bonds are Floating Rate Covered Bonds or
Variable Interest Covered Bonds, the Applicable Final Terms will specify any
relevant changes to the provisions relating to interest; and
(viii) such other changes will be made to this Condition (and the
Programme Documents) as the Issuer may decide, after consultation with the
Principal Paying Agent and the Bond Trustee, and as may be specified in the
notice, to conform it to conventions then applicable to instruments
denominated in Euro.
(j) Definitions
In these Conditions, the following expressions have the following meanings:
Established Rate means the rate for the conversion of the relevant Specified
Currency (including compliance with rules relating to roundings in accordance
with applicable European Community regulations) into Euro established by the
Council of the European Union pursuant to Article 123 of the Treaty.
Euro means the lawful currency for the time being of the member states of the
European Union that adopt the single currency introduced at the start of the
third stage of European economic and monetary union pursuant to the Treaty.
Rate of Interest means the rate of interest payable from time to time in
respect of a Series of Covered Bonds, as determined in, or as determined in
the manner specified in, the Applicable Final Terms.
Redenomination Date means any date for payment of interest under the Covered
Bonds specified by the Issuer in the notice given to the Covered Bondholders
pursuant to Condition 5(i)(i) and which falls on or after the date on which
the country of the relevant Specified Currency first participates in the third
stage of European economic and monetary union.
Treaty means the Treaty on the functioning of the European Community, as
amended.
6.
Redemption and Purchase
(a) Final redemption
Unless previously redeemed in full or purchased and cancelled as specified
below, each Covered Bond will be redeemed by the Issuer at par (the Final
Redemption Amount) in the relevant Specified Currency on the Final Maturity
Date (as specified in the Applicable Final Terms).
Without prejudice to Condition 9:
(i) if, prior to the occurrence of the Conversion Event Date,
the Issuer has failed to pay the Final Redemption Amount on the Final Maturity
Date specified in the Applicable Final Terms (or after expiry of the grace
period set out in Condition 9(a)(i)) and, following the service of a Notice to
Pay on the Covered Bond Guarantor by no later than the date falling one
Business Day prior to the Extension Determination Date, the Trust Manager
determines that the Covered Bond Guarantor has insufficient moneys available
under the Guarantee Priority of Payments to pay the Guaranteed Amounts
corresponding to the Final Redemption Amount in full in respect of the
relevant Series of Covered Bonds on the date falling on the earlier of (a) the
date which falls two Business Days after service of such Notice to Pay on the
Covered Bond Guarantor or, if later, the Final Maturity Date (or, in each
case, after the expiry of the grace period set out in Condition 9(a)(i)) under
the terms of the Covered Bond Guarantee and (b) the Extension Determination
Date, then (subject as provided below) payment of the unpaid amount in respect
of that Series of Covered Bonds by the Covered Bond Guarantor under the
Covered Bond Guarantee will be deferred until the Extended Due for Payment
Date (and that Series of Covered Bonds will become Pass-Through Covered
Bonds). In such circumstances, the Trust Manager must direct the Covered Bond
Guarantor to, and upon receiving such direction the Covered Bond Guarantor
must, on the earlier of (a) and (b) above, under the Covered Bond Guarantee,
apply the moneys (if any) available (after paying or providing for payment of
higher ranking or pari passu amounts in accordance with the Guarantee Priority
of Payments) rateably in part payment of an amount equal to the Final
Redemption Amount of the relevant Series of Covered Bonds and will pay
Guaranteed Amounts constituting the Scheduled Interest in respect of each such
Covered Bond on such date. The obligation of the Covered Bond Guarantor to
pay any amounts in respect of the balance of the Final Redemption Amount not
so paid will be deferred as described above and such failure to pay by the
Covered Bond Guarantor will not constitute a Covered Bond Guarantor Event of
Default, provided that any amount representing the Final Redemption Amount due
and remaining unpaid on the earlier of (a) and (b) above may also be paid by
the Covered Bond Guarantor (at the direction of the Trust Manager) on any
Interest Payment Date thereafter up to (and including) the Extended Due for
Payment Date;
(ii) if, prior to the Conversion Event Date, (a) an Issuer Event
of Default has occurred (x) in accordance with Condition 9(a) (other than in
accordance with Condition 9(a)(i) as a result of a failure to pay the Final
Redemption Amount in respect of a Series of Covered Bonds) and the Bond
Trustee has served a Notice to Pay on the Covered Bond Guarantor or (y) in
accordance with Condition 9(a)(i) as a result of a failure to pay the Final
Redemption Amount in respect of a Series of Covered Bonds and such Series of
Covered Bonds has been redeemed in full and (b) at such time there are no
Pass-Through Covered Bonds then outstanding, then (subject as provided below)
payment of the Final Redemption Amount in respect of the then Earliest
Maturing Covered Bonds by the Covered Bond Guarantor under the Covered Bond
Guarantee will be deferred until the Extended Due for Payment Date (and such
Earliest Maturing Covered Bonds will become Pass-Through Covered Bonds). In
such circumstances, the Trust Manager must direct the Covered Bond Guarantor
to, and upon receiving such direction the Covered Bond Guarantor must on the
next, and each following, Interest Payment Date, under the Covered Bond
Guarantee, apply the moneys (if any) available on a Distribution Date (after
paying or providing for payment of higher ranking or pari passu amounts in
accordance with the Guarantee Priority of Payments) rateably in part payment
of an amount equal to the Final Redemption Amount of the then Earliest
Maturing Covered Bonds (and to such extent, the Final Redemption Amount will,
for the purpose of the Guarantee Priority of Payments and all other purposes,
be due) and will pay Guaranteed Amounts constituting the Scheduled Interest in
respect of the then Earliest Maturing Covered Bonds on such Interest Payments
Dates. The obligation of the Covered Bond Guarantor to pay any amounts in
respect of the balance of the Final Redemption Amount not so paid on such
Interest Payments Date for such Earliest Maturing Covered Bonds will be
deferred as described above and such failure to pay by the Covered Bond
Guarantor will not constitute a Covered Bond Guarantor Event of Default,
provided that any amount representing the Final Redemption Amount remaining
unpaid may also be paid by the Covered Bond Guarantor (at the direction of the
Trust Manager) on any Interest Payment Date thereafter up to (and including)
the Extended Due for Payment Date. Once the then Earliest Maturing Covered
Bonds are repaid in full pursuant to this Condition 6(a)(ii), this Condition
6(a)(ii) will then apply to the next Earliest Maturing Covered Bonds; and
(iii) following the Conversion Event Date (subject as provided
below), payment of the Final Redemption Amount in respect of all Series of
Covered Bonds by the Covered Bond Guarantor under the Covered Bond Guarantee
will be deferred until the Extended Due for Payment Date (and all Series of
Covered Bonds will become Pass-Through Covered Bonds). The Covered Bond
Guarantor (at the direction of the Trust Manager) must on the next, and each
following Interest Payment Date for each Series of Covered Bonds, apply the
moneys (if any) available for that Series of Covered Bonds on a Distribution
Date (after paying or providing for payment of higher ranking or pari passu
amounts in accordance with the Guarantee Priority of Payments) towards
payment, in whole or part, of the Final Redemption Amount of that Series of
Covered Bonds (and to such extent, the Final Redemption Amount will, for the
purpose of the Guarantee Priority of Payments and all other purposes, be due)
on such Interest Payment Date.
The Covered Bond Guarantor will pay Guaranteed Amounts constituting Scheduled
Interest in respect of each Series of Pass-Through Covered Bonds on the basis
set out in the Applicable Final Terms or, if not set out therein, in
accordance with Condition 4, without prejudice to the Covered Bond Guarantor's
obligation to pay any other Guaranteed Amount (i.e. other than the Final
Redemption Amount) when Due for Payment.
The Issuer will confirm to the Principal Paying Agent or the A$ Registrar (in
the case of A$ Registered Covered Bonds) as soon as reasonably practicable (a)
and in any event at least four Business Days prior to the Final Maturity Date
of a Series of Covered Bonds whether (x) payment will be made in full of the
Final Redemption Amount in respect of that Series of Covered Bonds on that
Final Maturity Date or on the Extension Determination Date in respect of that
Series of Covered Bonds or (y) the obligation to pay the Final Redemption
Amount of that Series of Covered Bonds on their Final Maturity Date will be
deferred until the Extended Due for Payment Date; (b) following the Conversion
of a Series of Earliest Maturing Covered Bonds, that the obligation to pay the
Final Redemption Amount in respect of such Earliest Maturing Covered Bonds on
their Final Maturity Date will be deferred until the Extended Due for Payment
Date; or (c) following the Conversion Event Date, that the obligation to pay
the Final Redemption Amount in respect of all Series of Covered Bonds on their
Final Maturity Date will be deferred until the Extended Due for Payment
Date. Any failure by the Issuer to notify the Principal Paying Agent or the
A$ Registrar (as the case may be) will not affect the validity or
effectiveness of the extension.
The Trust Manager will notify the relevant Covered Bondholders (in accordance
with Condition 13), the Rating Agencies, the Bond Trustee, the Security
Trustee, the Principal Paying Agent and the relevant Registrar or the A$
Registrar (in the case of Registered Covered Bonds or A$ Registered Covered
Bonds, as applicable) (i) prior to the occurrence of the Conversion Event Date
but following the service of a Notice to Pay on the Covered Bond Guarantor as
a result of the Issuer failing to pay the Final Redemption Amount on the Final
Maturity Date specified in the Applicable Final Terms (or after expiry of the
grace period set out in Condition 9(a)(i)), as soon as reasonably practicable,
and in any event at least one Business Day prior to the earlier of (a) the
date which falls two Business Days after service of a Notice to Pay on the
Covered Bond Guarantor in the circumstances described above or, if later, the
Final Maturity Date (or, in each case, after the expiry of the grace period
set out in Condition 9(a)(i)) under the terms of the Covered Bond Guarantee
and (b) the Extension Determination Date, of any determination by the Trust
Manager in accordance with Condition 6(a)(i) of the inability of the Covered
Bond Guarantor to pay in full the Guaranteed Amounts corresponding to the
Final Redemption Amount in respect of a Series of Covered Bonds pursuant to
the Covered Bond Guarantee; (ii) prior to the occurrence of a Conversion Event
Date, as soon as reasonably practicable following a Conversion of Earliest
Maturing Covered Bonds in accordance with Condition 6(a)(ii); and (iii) as
soon as reasonably practicable, of the occurrence of the Conversion Event
Date. Any failure by the Trust Manager to notify such parties will not
affect the validity or effectiveness of any extension in such circumstances
nor give rise to any rights in any such party.
Any discharge of the obligations of the Issuer as a result of the payment of
Excess Proceeds to the Bond Trustee will be disregarded for the purposes of
determining the amounts to be paid by the Covered Bond Guarantor under the
Covered Bond Guarantee in connection with this Condition 6(a).
For the purposes of these Conditions:
Conversion means, in respect of a Series of Covered Bonds, the conversion of
that Series of Covered Bonds to Pass-Through Covered Bonds.
Conversion Event Date means the date on which an Amortisation Test Breach
Notice is served on the Covered Bond Guarantor and the Issuer, following the
service of a Notice to Pay on the Covered Bond Guarantor.
Earliest Maturing Covered Bonds means at any time, each Series of Covered
Bonds that has or have the earliest Final Maturity Date as specified in the
Applicable Final Terms (or, in the case of Exempt Covered Bonds, the
Applicable Pricing Supplement) (ignoring any acceleration of amounts due under
the Covered Bonds prior to the occurrence of a Covered Bond Guarantor Event of
Default).
Extended Due for Payment Date means, in relation to any Series of Covered
Bonds, the earlier of (a) the date which falls 31.5 years after the Final
Maturity Date in relation to that Series of Covered Bonds; (b) the date which
falls 31.5 years after the Conversion of that Series of Covered Bonds; and (c)
the date which falls 31.5 years after the Conversion Event Date.
Extension Determination Date means, in respect of a Series of Covered Bonds to
which Condition 6(a)(i) applies, the date falling two Business Days after the
expiry of seven days starting on (and including) the Final Maturity Date of
such Series of Covered Bonds.
Guarantee Priority of Payments means the guarantee priority of payments
relating to the allocation and distribution of the Available Income Amount and
the Available Principal Amount following service of a Notice to Pay on the
Covered Bond Guarantor, but prior to service of a Covered Bond Guarantee
Acceleration Notice on the Covered Bond Guarantor in accordance with clause
16.2 of the Establishment Deed.
Pass-Through Covered Bonds means:
(a) each Covered Bond of a Series in respect of which any amount
has remained unpaid on the relevant Final Maturity Date;
(b) at any time following the occurrence of an Issuer Event of
Default (i) in accordance with Condition 9(a) (other than in accordance with
Condition 9(a)(i) as a result of a failure to pay the Final Redemption Amount
in respect of a Series of Covered Bonds) and service of a Notice to Pay on the
Covered Bond Guarantor or (ii) in accordance with Condition 9(a)(i) as a
result of a failure to pay the Final Redemption Amount in respect of a Series
of Covered Bonds where such Series of Covered Bonds has been redeemed in full,
the then Earliest Maturing Covered Bonds; and
(c) immediately upon the Conversion Event Date, all Series of
Covered Bonds.
Rating Agency means any one of Moody's Investors Service Pty Limited and Fitch
Australia Pty Limited (together, the Rating Agencies) or their successors, to
the extent they provide ratings in respect of the Covered Bonds.
(b) Redemption for taxation reasons
The Covered Bonds may be redeemed at the option of the Issuer in whole, or in
part, at any time (if this Covered Bond is not a Floating Rate Covered Bond)
or on any Interest Payment Date (if this Covered Bond is a Floating Rate
Covered Bond), on giving not less than 30 nor more than 60 days' notice to the
Bond Trustee and, in accordance with Condition 13, the Covered Bondholders
(which notice will be irrevocable), if the Issuer satisfies the Bond Trustee
immediately before the giving of such notice that, on the occasion of the next
Interest Payment Date, the Issuer is or will be required to pay additional
amounts as provided or referred to in Condition 7. Covered Bonds redeemed
pursuant to this Condition 6(b) will be redeemed at their Early Redemption
Amount referred to in Condition 6(f) below together (if appropriate) with
interest accrued to (but excluding) the date of redemption.
(c) Redemption at the option of the Issuer (Issuer Call)
If Issuer Call is specified in the Applicable Final Terms, the Issuer may,
having (unless otherwise specified, in the Applicable Final Terms) given not
less than 30 nor more than 60 days' notice to the Bond Trustee, (other than in
the case of the redemption of Registered Covered Bonds) the Principal Paying
Agent, (in the case of the redemption of Registered Covered Bonds or A$
Registered Covered Bonds) the relevant Registrar or the A$ Registrar (as
applicable) and, in accordance with Condition 13, the Covered Bondholders
(which notice will be irrevocable) redeem all or some only (as specified in
the Applicable Final Terms) of the Covered Bonds then outstanding on any
Optional Redemption Date(s) and at the Optional Redemption Amount(s) specified
in the Applicable Final Terms together, if applicable, with interest accrued
to (but excluding) the relevant Optional Redemption Date(s). Upon expiry of
such notice, the Issuer will be bound to redeem the Covered Bonds
accordingly. In the event of a redemption of some only of the Covered Bonds,
such redemption must be for an amount being the Minimum Redemption Amount (as
specified in the Applicable Final Terms) or a Maximum Redemption Amount (as
specified in the Applicable Final Terms). In the case of a partial
redemption of Covered Bonds, the Covered Bonds to be redeemed (the Redeemed
Covered Bonds) will be selected:
(i) in the case of Redeemed Covered Bonds represented by
Definitive Covered Bonds, individually by lot;
(ii) in the case of Redeemed Covered Bonds represented by a
Global Covered Bond, in accordance with the rules of Euroclear and/or
Clearstream, Luxembourg (to be reflected in the records of Euroclear and
Clearstream, Luxembourg as either a pool factor or a reduction in nominal
amount, at their discretion) (or any alternative or additional clearing system
as may be specified in the Final Terms); and
(iii) in the case of Redeemed Covered Bonds which are A$
Registered Covered Bonds, on the basis that the Redeemed Covered Bonds must be
a multiple of their Specified Denominations,
in each case, not more than 60 days prior to the date fixed for redemption
(such date of selection being hereinafter called the Selection Date). In the
case of Redeemed Covered Bonds represented by Definitive Covered Bonds, a list
of the serial numbers of such Redeemed Covered Bonds will be notified in
accordance with Condition 13 not less than 30 days prior to the date fixed for
redemption. The aggregate nominal amount of Redeemed Covered Bonds
represented by Definitive Covered Bonds will bear the same proportion to the
aggregate nominal amount of all Redeemed Covered Bonds as the aggregate
nominal amount of Definitive Covered Bonds outstanding bears to the aggregate
nominal amount of the Covered Bonds outstanding, in each case on the Selection
Dates, provided that such first mentioned nominal amount will, if necessary,
be rounded downwards to the nearest integral multiple of the Specified
Denomination, and the aggregate nominal amount of Redeemed Covered Bonds
represented by a Global Covered Bond will be equal to the balance of the
Redeemed Covered Bonds. No exchange of the relevant Global Covered Bond will
be permitted during the period from (and including) the Selection Date to (and
including) the date fixed for redemption pursuant to this Condition 6(c) and
notice to that effect will be given by the Issuer to the Covered Bondholders
in accordance with Condition 13 at least 30 days prior to the Selection Date.
(d) Redemption at the option of the Covered Bondholders
(Investor Put)
If Investor Put is specified in the Applicable Final Terms, upon the holder of
any Covered Bond giving the Issuer not less than 30 nor more than 60 days'
written notice as specified in the Applicable Final Terms the Issuer will,
upon the expiry of such notice, redeem, subject to, and in accordance with,
the terms specified in the Applicable Final Terms, such Covered Bond on the
Optional Redemption Date and at the Optional Redemption Amount together, if
appropriate, with interest accrued to (but excluding) the Optional Redemption
Date
To exercise the right to require redemption of a Covered Bond the holder
thereof must, if the Covered Bond is in definitive form and held outside
Euroclear and Clearstream, Luxembourg, deliver, at the specified office of any
Paying Agent at any time during normal business hours of such Paying Agent
falling within the notice period, a duly completed and signed notice of
exercise in the form (for the time being current) obtainable from any
specified office of any Paying Agent (a Put Notice) and in which the holder
must specify a bank account (or, if payment is required to be made by cheque,
an address) to which payment is to be made under this Condition 6(d)
accompanied by this Covered Bond. If this Covered Bond is represented by a
Global Covered Bond held through Euroclear or Clearstream, Luxembourg to
exercise the right to require redemption of this Covered Bond the holder of
this Covered Bond must, within the notice period, give notice to the Principal
Paying Agent of such exercise in accordance with the standard procedures of
Euroclear and Clearstream, Luxembourg (which may include notice being given
on his instruction by Euroclear or Clearstream, Luxembourg, or any common
depository, for them to the Principal Paying Agent by electronic means) in a
form acceptable to Euroclear and Clearstream, Luxembourg from time to time
and, if this Covered Bond is represented by a Global Covered Bond, at the same
time present or procure the presentation of the relevant Global Covered Bond
to the Principal Paying Agent for notation accordingly. If this Covered Bond
is an A$ Registered Covered Bond lodged in the Austraclear System, to exercise
the right to require redemption of this Covered Bond the holder of the
beneficial interest in this Covered Bond must, within the notice period, give
notice to the A$ Registrar of such exercise in accordance with the Austraclear
Regulations. If this Covered Bond is an A$ Registered Covered Bond held
outside of the Austraclear System, to exercise a right to require redemption
of this Covered Bondholder must, within the notice period, give notice to the
Issuer and the A$ Registrar of such exercise in a form acceptable to the A$
Registrar together with any evidence the A$ Registrar may require to establish
title of the Covered Bondholder to the relevant Covered Bond.
Any Put Notice or other notice given in accordance with the standard
procedures of Euroclear and Clearstream, Luxembourg or the Austraclear System,
given by a holder of any Covered Bond pursuant to this Condition 6(d) will be
irrevocable except where, prior to the due date of redemption, an Issuer Event
of Default or a Covered Bond Guarantor Event of Default has occurred and is
continuing and the Bond Trustee has declared the Covered Bonds to be due and
payable pursuant to Condition 9, in which event such holder, at its option,
may elect by notice to the Issuer to withdraw the notice given pursuant to
this Condition 6(d) and instead request or direct the Bond Trustee to declare
such Covered Bond forthwith due and payable pursuant to Condition 9.
(e) Redemption due to illegality
The Covered Bonds of all Series may be redeemed at the option of the Issuer in
whole, but not in part, at any time, on giving not less than 30 nor more than
60 days' notice as specified in the Applicable Final Terms to the Bond
Trustee, the Principal Paying Agents, the Registrars and, in accordance with
Condition 13, all the Covered Bondholders (which notice will be irrevocable),
if the Issuer satisfies the Bond Trustee immediately before the giving of such
notice that it has, or will before the next Interest Payment Date of any
Covered Bond of any Series, become unlawful for the Intercompany Note
Subscriber and/or the Demand Note Subscriber to subscribe for or continue to
fund any Intercompany Note and/or the Demand Note held by the Intercompany
Note Subscriber or the Demand Note Subscriber, as the case may be, issued by
the Covered Bond Guarantor pursuant to the Intercompany Note Subscription
Agreement or the Demand Note Subscription Agreement, as the case may be, as a
result of any change in, or amendment to, the applicable laws or regulations
or any change in the application or official interpretation of such laws or
regulations, which change or amendment has become or will become effective
before the next such Interest Payment Date.
Covered Bonds redeemed pursuant to this Condition 6(e) will be redeemed at
their Early Redemption Amount referred to in Condition 6(f) below together (if
appropriate) with interest accrued to (but excluding) the date of redemption.
(f) Early Redemption Amount
For the purpose of Conditions 6(b) and 6(e) above and Condition 9, each
Covered Bond will be redeemed at its Early Redemption Amount calculated as
follows:
(i) in the case of a Covered Bond with a Final Redemption
Amount equal to the Issue Price, at the Final Redemption Amount thereof; or
(ii) in the case of a Covered Bond with a Final Redemption
Amount which is or may be less or greater than the Issue Price or which is
payable in a Specified Currency other than that in which the Covered Bond is
denominated, at the amount specified in, the Applicable Final Terms or, if no
such amount is so specified in the Applicable Final Terms, at its nominal
amount.
(g) Purchases
The Issuer or any of its subsidiaries or the Covered Bond Guarantor (acting at
the direction of the Trust Manager) may at any time purchase or otherwise
acquire Covered Bonds (provided that, in the case of Bearer Definitive Covered
Bonds, Coupons and Talons appertaining thereto are attached thereto or
surrendered therewith) at any price and in any manner. If purchases are made
by tender, tenders must be available to all the Covered Bondholders alike.
Such Covered Bonds may be held, reissued, resold or, in respect of Covered
Bonds other than A$ Registered Covered Bonds, at the option of the Issuer or
the relevant subsidiary, surrendered to the relevant Registrar and/or the
relevant Paying Agent, for cancellation (except that any Covered Bonds (other
than A$ Registered Covered Bonds) purchased or otherwise acquired by the
Covered Bond Guarantor must immediately be surrendered to the relevant
Registrar and/or to any Paying Agent for cancellation).
(h) Cancellation
All Covered Bonds (other than A$ Registered Covered Bonds) which are redeemed
in full will forthwith be cancelled (together with, in the case of Bearer
Definitive Covered Bonds, Coupons and Talons attached thereto or surrendered
therewith at the time of redemption). All Covered Bonds so cancelled and any
Covered Bonds purchased and surrendered for cancellation pursuant to Condition
6(g) above and cancelled (together with, in the case of Bearer Definitive
Covered Bonds, Coupons and Talons cancelled therewith) will be forwarded to
the Principal Paying Agent and cannot be held, reissued or resold.
(i) Certification on redemption under Condition 6(b) and 6(e)
Prior to the publication of any notice of redemption pursuant to Condition
6(b) or 6(e), the Issuer will deliver to the Bond Trustee a certificate signed
by two Authorised Signatories (as defined in the Definitions Schedule) of the
Issuer stating that the Issuer is entitled to effect such redemption and
setting forth a statement of facts showing that the conditions precedent to
the right of the Issuer so to redeem have occurred and the Bond Trustee will
be entitled to accept the certificate as sufficient evidence of the
satisfaction of the conditions precedent set out above, in which event it will
be conclusive and binding on all holders of the Covered Bonds and
Couponholders.
7. Taxation
All payments of principal and interest (if any) in respect of the Covered
Bonds and Coupons by or on behalf of the Issuer and all payments of Guaranteed
Amounts by or on behalf of the Covered Bond Guarantor, as the case may be,
must be made without withholding or deduction for, or on account of, any
present or future taxes, duties, assessments or governmental charges of
whatever nature imposed or levied by or on behalf of Australia or any
political sub-division thereof or by any authority therein or thereof having
power to tax unless such withholding or deduction is required by law or
regulation or administrative practice.
If the Applicable Final Terms indicate that tax-gross up by the Issuer in
accordance with this Condition 7 is applicable, in the event of such a
withholding or deduction being made by the Issuer in respect of a payment made
by it, the Issuer will pay such additional amounts as will be necessary in
order that the net amounts received by the Covered Bondholders or
Couponholders after such withholding or deduction will equal the respective
amounts of principal and interest which would otherwise have been receivable
in respect of the Covered Bonds or Coupons, as the case may be, in the absence
of such withholding or deduction; except that the foregoing obligation to pay
additional amounts will not apply to any such tax, assessment, governmental
charge or duty:
(a) which is payable otherwise than by deduction or withholding
from payments of principal and interest on such Covered Bond or Coupon;
(b) which is payable by reason of the Covered Bondholder or
Couponholder or beneficial owner (or any one of them in case of principal or
interest derived by two or more persons jointly) having, or having had, some
personal or business connection with Australia (other than mere ownership of
or receipt of payment under the Covered Bonds or Coupon or the fact that
payments are, or for the purposes of taxation are deemed to be, from sources
in, or secured in Australia);
(c) which is payable solely by reason of the Covered
Bondholder's or Couponholder's or beneficial owner's failure to comply with
any certification, identification or other reporting requirement concerning
nationality, residence, identity, connection with taxing jurisdiction of the
Covered Bondholder or Couponholder or other beneficial owner of such Covered
Bond;
(d) which is payable by reason of a change in law that becomes
effective more than thirty days after the Relevant Date (as defined below)
except to the extent that the holder thereof would have been entitled to an
additional amount on presenting the same for payment on such thirtieth day
assuming that day to have been a Payment Day (as defined in Condition 5(g));
(e) which is an estate, inheritance, gift, sales, transfer,
personal property, stamp duty or similar tax, assessment or other charge;
(f) which is payable by reason of the Covered Bondholder or
Couponholder or beneficial owner of such Covered Bond or Coupon being an
associate of the Issuer or the Covered Bond Guarantor for the purposes of
section 128F of the Tax Act;
(g) which is imposed or withheld as a consequence of a
determination having been made under Part IVA of the Tax Act (or any
modification or equivalent thereof) by the Commissioner of Taxation of the
Commonwealth of Australia that withholding tax is payable in respect of a
payment in circumstances where the payment would not have been subject to
withholding tax in the absence of the scheme which was the subject of that
determination;
(h) with respect to any payment of principal of or interest
(including original issue discount) on the Covered Bonds and Coupons by the
Issuer to any Covered Bondholder or Couponholder who is a fiduciary or
partnership or other than the sole beneficial owner of any such payment to the
extent that a beneficiary or settlor with respect to such fiduciary, a member
of such a partnership or any other beneficial owner would not have been
entitled to the additional amounts had such beneficiary, settlor, member or
beneficial owner been the holder of such Covered Bonds and Coupons; or
(i) any combination of (a) through (h) above.
Notwithstanding any other provision of these Conditions, in no event will the
Issuer or Covered Bond Guarantor be required to pay any additional amounts in
respect of the Covered Bonds for, or on account of, any withholding or
deduction required pursuant to an agreement described in Section 1471(b) of
the Code or otherwise imposed pursuant to Sections 1471 through 1474 of the
Code, any regulations or agreements thereunder, any official interpretations
thereof, or any law implementing an intergovernmental approach thereto.
If the Applicable Final Terms indicate that tax gross-up by the Issuer in
accordance with this Condition 7 is not applicable or do not indicate that
Condition 7 is applicable, if any payments of principal and interest (if any)
in respect of the Covered Bonds and Coupons by or on behalf of the Issuer are
or become subject to any withholding or deduction, on account of any taxes,
duties or other charges of whatever nature, imposed or levied by or on behalf
of Australia or by any other authority having power to tax, the Issuer will
not be obliged to pay any additional amount as a consequence.
If any payments made by the Covered Bond Guarantor under the Covered Bond
Guarantee are or become subject to any withholding or deduction, on account of
any taxes, duties or other charges of whatever nature, imposed or levied by or
on behalf of Australia or by any other authority having power to tax, the
Covered Bond Guarantor will not be obliged to pay any additional amount as a
consequence.
As used herein the Relevant Date means the date on which such payment first
becomes due, except that, if the full amount of the moneys payable has not
been duly received by the Bond Trustee or the Principal Paying Agent on or
prior to such due date, it means the date on which, the full amount of such
moneys having been so received, notice to that effect is duly given to the
Covered Bondholders in accordance with Condition 13.
8.
Prescription
The Covered Bonds (other than A$ Registered Covered Bonds), whether in bearer
or registered form and Coupons will become void unless presented for payment
within ten years (in the case of principal) and five years (in the case of
interest) in each case from the Relevant Date (as defined in Condition 7)
therefor, subject in each case to the provisions of Condition 5.
There will not be included in any Coupon sheet issued on exchange of a Talon,
any Coupon the claim for payment in respect of which would be void pursuant to
this Condition 8 or Condition 5 or any Talon which would be void pursuant to
Condition 5.
9. Events of Default and Enforcement
(a) Issuer Events of Default
The Bond Trustee at its discretion may, and if so requested in writing by the
holders of at least 25 per cent. of the aggregate Principal Amount
Outstanding of the Covered Bonds (which for this purpose or the purpose of any
Extraordinary Resolution (as defined in Condition 14) referred to in this
Condition 9(a) means the Covered Bonds of this Series together with the
Covered Bonds of any other Series constituted by the Bond Trust Deed) then
outstanding, as if they were a single Series (with the Principal Amount
Outstanding of Covered Bonds not denominated in Australian Dollars converted
into Australian Dollars at the relevant Covered Bond Swap Rate) or if so
directed by an Extraordinary Resolution of the Covered Bondholders will, (but
in the case of the happening of any of the events mentioned in subparagraph
(ii), (iii), (iv), (v), (vii) or (viii) inclusive below, only if the Bond
Trustee will have certified in writing to the Issuer that such event is, in
its opinion, materially prejudicial to the interests of the Covered
Bondholders of any Series) (subject in each case to being indemnified and/or
secured and/or prefunded to its satisfaction) give notice (an Issuer
Acceleration Notice) in writing to the Issuer (copied to the Covered Bond
Guarantor) that as against the Issuer (but not, for the avoidance of doubt, as
against the Covered Bond Guarantor under the Covered Bond Guarantee) each
Covered Bond of each Series is, and each such Covered Bond will, unless such
event will have been cured by the Issuer prior to the Issuer's receipt of the
notice in writing from the Bond Trustee, thereupon immediately become, due and
repayable at its Early Redemption Amount together with accrued interest as
provided in the Bond Trust Deed if any of the following events (each an Issuer
Event of Default) will occur and be continuing:
(i) default by the Issuer in any payment when due of principal
or interest on the Covered Bonds and the default continues for a period of
seven days; or
(ii) the Issuer is in default in the performance, or is
otherwise in breach, of any covenant or undertaking or other agreement of the
Issuer in respect of the Covered Bonds (other than any obligation for the
payment of any amount due in respect of any of the Covered Bonds) and such
default or breach continues for a period of 30 days after notice thereof has
been given to the Issuer by the Bond Trustee requiring such default or breach
to be remedied; or
(iii) it is or will become unlawful for the Issuer to perform or
comply with any one or more of its obligations under the Covered Bonds or any
Programme Document; or
(iv) a distress, attachment, execution or other legal process is
levied, enforced or sued out against or on the Issuer or against all or a
material part of the assets of the Issuer and is not stayed, satisfied or
discharged within 21 days; or
(v) the Issuer (A) becomes insolvent, is unable to pay its debts
as they fall due or fails to comply with a statutory demand (which is still in
effect) under section 459F of the Corporations Act, or (B) stops or suspends
or threatens to stop or suspend payment of all or a material part of its debts
or appoints an administrator under section 436A of the Corporations Act, or
(C) begins negotiations or takes any proceeding or other step with a view to
re-adjustment, rescheduling or deferral of all its indebtedness (or any part
of its indebtedness which it will or might otherwise be unable to pay when
due) or proposes or makes a general assignment or an arrangement or
composition with or for the benefit of its creditors, or a moratorium is
agreed or declared in respect of or affecting indebtedness of the Issuer,
except in any case referred to in (C) above for the purposes of a solvent
reconstruction or amalgamation the terms of which have previously been
approved by an Extraordinary Resolution of the Covered Bondholders; or
(vi) an order is made or an effective resolution is passed for the
winding-up of the Issuer (except in any such case for the purposes of a
solvent reconstruction or amalgamation the terms of which have previously been
approved by an Extraordinary Resolution of the Covered Bondholders) or an
administrator is appointed to the Issuer by a provisional liquidator of the
Issuer under section 436B of the Corporations Act; or
(vii) any present or future Security Interest on or over the assets
of the Issuer becomes enforceable and any step (including the taking of
possession or the appointment of a receiver, manager or similar officer which
is not vacated or discharged within 14 days) is taken to enforce that Security
Interest by reason of a default or event of default (howsoever described)
having occurred; or
(viii) any event occurs which, under the laws of any relevant
jurisdiction, has an analogous or equivalent effect to any of the events
mentioned in this Condition 9(a); or
(ix) an Asset Coverage Test Breach Notice has been served and has
not been revoked (in accordance with the terms of the Programme Documents) on
the next following Determination Date after service of such Asset Coverage
Test Breach Notice on the Covered Bond Guarantor.
Notwithstanding any other provision of this Condition 9(a), no Issuer Event of
Default in respect of the Covered Bonds shall occur solely on account of any
failure by the Issuer to perform or observe any of its obligations in relation
to, or the agreement or declaration of any moratorium with respect to, or the
taking of any proceeding in respect of, any share, note or other security or
instrument constituting Tier 1 Capital or Tier 2 Capital (as defined by APRA
from time to time).
Upon the Covered Bonds becoming immediately due and repayable against the
Issuer pursuant to this Condition 9(a), the Bond Trustee will forthwith serve
a notice to pay (the Notice to Pay) on the Covered Bond Guarantor (copied to
the Trust Manager) pursuant to the Covered Bond Guarantee and the Covered Bond
Guarantor will be required to make payments of Guaranteed Amounts when the
same will become Due for Payment in accordance with the terms of the Covered
Bond Guarantee.
Following the occurrence of an Issuer Event of Default and service of an
Issuer Acceleration Notice, the Bond Trustee may or must take such proceedings
or other action or step against the Issuer in accordance with Condition 9(c).
The Bond Trust Deed provides that all moneys received by the Bond Trustee
following the occurrence of an Issuer Event of Default and the delivery of an
Issuer Acceleration Notice and Notice to Pay, from the Issuer or any receiver,
manager, liquidator, administrator, controller, statutory manager or other
similar official appointed in relation to the Issuer following the occurrence
of an Issuer Event of Default and service of an Issuer Acceleration Notice and
a Notice to Pay (the Excess Proceeds), must be paid by the Bond Trustee on
behalf of the Covered Bondholders of the relevant Series to the Covered Bond
Guarantor, as soon as practicable, and must be held by the Covered Bond
Guarantor in the GIC Account and the Excess Proceeds must thereafter form part
of the Charged Property and must be used by the Covered Bond Guarantor in the
same manner as all other moneys from time to time standing to the credit of
the GIC Account pursuant to the Security Deed and the Establishment Deed.
Any Excess Proceeds received by the Bond Trustee will discharge pro tanto the
obligations of the Issuer in respect of the Covered Bonds and Coupons (as
applicable and to the extent of the amount so received and subject to
restitution of the same if such Excess Proceeds will be required to be repaid
by the Covered Bond Guarantor) (but will be deemed not to have done so for the
purposes of subrogation rights of the Covered Bond Guarantor contemplated by
the Bond Trust Deed). However, the obligations of the Covered Bond Guarantor
under the Covered Bond Guarantee are (following service of an Issuer
Acceleration Notice and a Notice to Pay or if earlier, Service of a Covered
Bond Guarantee Acceleration Notice) unconditional and irrevocable and the
receipt by or on behalf of the Bond Trustee of any Excess Proceeds will not
reduce or discharge any of such obligations.
By subscribing for Covered Bond(s), each Covered Bondholder will be deemed to
have irrevocably directed the Bond Trustee to pay the Excess Proceeds to the
Covered Bond Guarantor for application in the manner as described above.
(b) Covered Bond Guarantor Events of Default
The Bond Trustee at its discretion may, and if so requested in writing by the
holders of at least 25 per cent. of the aggregate Principal Amount
Outstanding of the Covered Bonds (which for this purpose and the purpose of
any Extraordinary Resolution referred to in this Condition 9(b) means the
Covered Bonds of this Series together with the Covered Bonds of any other
Series constituted by the Bond Trust Deed) then outstanding as if they were a
single Series (with the Principal Amount Outstanding of Covered Bonds not
denominated in Australian Dollars converted into Australian Dollars at the
relevant Covered Bond Swap Rate) or if so directed by an Extraordinary
Resolution of all the Covered Bondholders will, (subject in each case to being
indemnified and/or secured and/or prefunded to its satisfaction), but in the
case of the happening of any of the events described in paragraph (ii) below,
only if the Bond Trustee will have certified in writing to the Issuer and the
Covered Bond Guarantor that such event is, in its opinion, materially
prejudicial to the interests of the Covered Bondholders of any Series, give
notice (the Covered Bond Guarantee Acceleration Notice) in writing to the
Issuer and to the Covered Bond Guarantor (copied to the Trust Manager), that
(x) each Covered Bond of each Series is, and each Covered Bond of each Series
will as against the Issuer (if not already due and repayable against it
following the service of an Issuer Acceleration Notice in accordance with
Condition 9(a)), thereupon immediately become, due and repayable at its Early
Redemption Amount together with accrued interest and (y) all amounts payable
by the Covered Bond Guarantor under the Covered Bond Guarantee will thereupon
immediately become due and payable at the Guaranteed Amount corresponding to
the Early Redemption Amount for each Covered Bond of each Series together with
accrued interest, in each case as provided in the Bond Trust Deed and
thereafter the Security will become enforceable if any of the following events
(each a Covered Bond Guarantor Event of Default) will occur and be continuing:
(i) default is made by the Covered Bond Guarantor for a period
of seven days or more in the payment of any Guaranteed Amounts when Due for
Payment in respect of the Covered Bonds of any Series except in the case of
the payments of a Guaranteed Amount when Due for Payment under Condition 6(a)
where the Covered Bond Guarantor will be required to make payments of
Guaranteed Amounts which are Due for Payment on the dates specified therein;
or
(ii) default is made by the Covered Bond Guarantor in the
performance or observance of any other obligation, condition or provision
binding on it (other than any obligation for the payment of Guaranteed Amounts
in respect of the Covered Bonds of any Series) under the Bond Trust Deed, the
Security Deed or any other Programme Document to which the Covered Bond
Guarantor is a party (other than the Programme Agreement or any Subscription
Agreement) and, except where such default is or the effects of such default
are, in the opinion of the Bond Trustee, not capable of remedy when no such
continuation and notice as is hereinafter mentioned will be required, such
default continues for 14 days (or such longer period as the Bond Trustee may
permit) after written notice thereof has been given by the Bond Trustee to the
Covered Bond Guarantor requiring the same to be remedied; or
(iii) an Insolvency Event occurs in respect of the Covered Bond
Guarantor in its personal capacity (but not in its capacity as trustee of any
trust) and the Covered Bond Guarantor is not replaced as trustee of the Trust
by the Trust Manager in accordance with the Establishment Deed within 60 days
of the Insolvency Event occurring; or
(iv) the Covered Bond Guarantee is not, or is claimed by the
Covered Bond Guarantor not to be, in full force and effect.
Following the occurrence of a Covered Bond Guarantor Event of Default and
service of a Covered Bond Guarantee Acceleration Notice on the Covered Bond
Guarantor each of the Bond Trustee and the Security Trustee may or must take
such proceedings or steps in accordance with the first and third paragraphs,
respectively, of Condition 9(c) and the Covered Bondholders will have a claim
against the Covered Bond Guarantor, under the Covered Bond Guarantee, for an
amount equal to the Early Redemption Amount for each Covered Bond of each
Series together with accrued interest and any other amount due under the
Covered Bonds (other than additional amounts payable under Condition 7) as
provided in the Bond Trust Deed in respect of each Covered Bond.
(c) Enforcement
The Bond Trustee may at any time, at its discretion and without further
notice, following service of an Issuer Acceleration Notice (in the case of the
Issuer) or, if earlier, following service of a Covered Bond Guarantee
Acceleration Notice (in the case of the Covered Bond Guarantor) take such
proceedings or other action or step as it may think fit against or in relation
to the Issuer and/or the Covered Bond Guarantor, as the case may be, and/or
any other person as it may think fit to enforce the provisions of the Bond
Trust Deed, the Covered Bonds and the Coupons or any other Programme Document,
but it will not be bound to take any such enforcement proceedings or other
action or step in relation to the Bond Trust Deed, the Covered Bonds or the
Coupons or any other Programme Document unless (i) it has been so directed by
an Extraordinary Resolution of the Covered Bondholders of all Series then
outstanding (with the Covered Bonds of all Series taken together as a single
Series and converted into Australian Dollars at the relevant Covered Bond Swap
Rate as stated above) or so requested in writing by the holders of not less
than 25 per cent. of the aggregate Principal Amount Outstanding of the Covered
Bonds of all Series then outstanding (with the Covered Bonds of all Series
taken together as a single Series and converted into Australian Dollars at the
relevant Covered Bond Swap Rate as stated above) and (ii) it has been
indemnified and/or secured and/or prefunded to its satisfaction.
In exercising any of its powers, trusts, authorities and discretions the Bond
Trustee will only have regard to the interests of the Covered Bondholders of
all Series equally and will not have regard to the interests of any other
Secured Creditors.
The Bond Trustee may at any time, following service of a Covered Bond
Guarantee Acceleration Notice at its discretion and without further notice,
direct or instruct the Security Trustee to take such steps or proceedings
against the Covered Bond Guarantor and/or any other person as it may think fit
to enforce the provisions of the Security Deed or any other Programme Document
and may, at any time after the Security has become enforceable, direct and
instruct the Security Trustee to take such steps as it may think fit to
enforce the Security.
In the event that the Bond Trustee is:
(i) requested by the Security Trustee; or
(ii) required by the holders of the Covered Bonds,
to provide the Security Trustee with instructions, the Bond Trustee will do so
(save where expressly provided otherwise):
(A) in the case of paragraph (i) above only, in its absolute
discretion subject to and in accordance with the Bond Trust Deed; or
(B) in the case of both paragraph (i) or (ii) above, if so
requested in writing by the holders of not less than 25 per cent. in aggregate
of the Principal Amount Outstanding of the Covered Bonds then outstanding
(with the Covered Bonds of all Series taken together as a single Series and,
if the nominal amount of the Covered Bonds is not denominated in Australian
Dollars, converted into Australian Dollars at the relevant Covered Bond Swap
Rate) or directed by an Extraordinary Resolution of the holders of the Covered
Bonds then outstanding (with the Covered Bonds of all Series taken together as
a single Series and, if the nominal amount of the Covered Bonds is not
denominated in Australian Dollars, converted into Australian Dollars at the
relevant Covered Bond Swap Rate),
subject in each case to the Bond Trustee being indemnified and/or secured
and/or prefunded to its satisfaction prior to giving any instructions to the
Security Trustee. The Bond Trustee will be entitled to request the Covered
Bondholders (voting as aforesaid) to direct it in relation to any matter in
relation to which the Security Trustee has requested instructions. The Bond
Trustee has no obligation to monitor the performance of the Security Trustee
and has no liability to any person for the performance or non-performance of
the Security Trustee. In no circumstance will the Bond Trustee be required
to indemnify, secure or prefund the Security Trustee.
In exercising any of its powers, trusts, authorities and discretions under
this paragraph each of the Bond Trustee and the Security Trustee will only
have regard to the interests of the Covered Bondholders of all Series equally
and will not have regard to the interests of any other Secured Creditors.
No Covered Bondholder or Couponholder will be entitled to proceed directly
against the Issuer or the Covered Bond Guarantor or to take any action with
respect to the Bond Trust Deed, the Covered Bonds, the Coupons, the Security
or to directly enforce the provisions of any other Programme Document, unless
the Bond Trustee or the Security Trustee, as applicable, having become bound
so to proceed, fails so to do within a reasonable time and such failure is
continuing in which event any Covered Bondholder or Couponholder may, on
giving an indemnity and/or prefunding and/or security satisfactory to the Bond
Trustee, in the name of the Bond Trustee (but not otherwise) himself institute
such proceedings and/or prove in the winding-up, administration or liquidation
of the Issuer or the Covered Bond Guarantor to the same extent and in the same
jurisdiction (but not further or otherwise than the Bond Trustee would have
been entitled to do so in respect of the Covered Bonds and Coupons and/or the
Bond Trust Deed).
10. Replacement of Covered Bonds, Coupons and Talons
Should any Covered Bond (other than any A$ Registered Covered Bond), Coupon or
Talon be lost, stolen, mutilated, defaced or destroyed, it may be replaced at
the specified office of the Principal Paying Agent in London (in the case of
Bearer Covered Bonds or Coupons) or the specified office of the relevant
Registrar or Transfer Agent (in the case of Registered Covered Bonds), or any
other place approved by the Bond Trustee of which notice has been given in
accordance with Condition 13 upon payment by the claimant of such costs and
expenses as may be incurred in connection therewith and on such terms as to
evidence and indemnity as the Issuer may reasonably require. Mutilated or
defaced Covered Bonds (other than A$ Registered Covered Bonds), Coupons or
Talons must be surrendered before replacements will be issued.
11. Principal Paying Agent, Paying Agents, Registrar, A$ Registrar
and Transfer Agent
The names of the initial Principal Paying Agent, the other initial Paying
Agents, the initial Registrar, the A$ Registrar, the initial Transfer Agent
and their initial specified offices are set out below.
In the event of the appointed office of any such bank being unable or
unwilling to continue to act as the Principal Paying Agent, or failing duly to
determine the Rate of Interest, if applicable, or to calculate the Interest
Amounts for any Interest Period, the Issuer will appoint the London office of
such other bank as may be approved by the Bond Trustee to act as such in its
place. The Principal Paying Agent may not resign its duties or be removed
from office without a successor having been appointed as stated above.
In the event of the appointed A$ Registrar being unable or unwilling to
continue to act as the A$ Registrar, or failing duly to comply with the A$
Registry Agreement, the Issuer will appoint such other registrar and/or paying
agent as may be approved by the Bond Trustee to act as such in its place.
The A$ Registrar may not resign its duties or be removed from office without a
successor having been appointed as stated above.
The Issuer is entitled, with the prior written approval of the Bond Trustee
(not to be unreasonably withheld), to vary or terminate the appointment of any
Paying Agent, Registrar or A$ Registrar and/or appoint additional or other
Paying Agents, Registrars or A$ Registrars and/or approve any change in the
specified office through which any Paying Agent, Registrar or A$ Registrar
acts, provided that:
(a) there will at all times be a Principal Paying Agent, a
Registrar and, so long as any A$ Registered Covered Bonds are outstanding, an
A$ Registrar; and
(b) so long as any of the Covered Bonds are listed on any stock
exchange or admitted to listing by any other relevant authority, there will at
all times be a Paying Agent (in the case of Bearer Covered Bonds) and a
Transfer Agent (in the case of Registered Covered Bonds) with a specified
office in such place as may be required by the rules and regulations of the
relevant stock exchange or as the case may be, other relevant authority.
In addition, the Issuer will, when necessary appoint a Paying Agent having a
specified office in New York City in the circumstances described in Condition
5(f). Notice of any such variation, termination, appointment or change will
be given by the Issuer to the Covered Bondholders as soon as reasonably
practicable in accordance with Condition 13.
In acting under the Agency Agreements, the Agents act solely as agents of the
Issuer and the Covered Bond Guarantor (to the extent applicable) and do not
assume any obligation to, or relationship of agency or trust with, any Covered
Bondholders or Couponholders. Each Agency Agreement contains provisions
permitting any entity into which any Agent is merged or converted or with
which it is consolidated or to which it transfers all or substantially all of
its assets to become the successor agent.
12. Exchange of Talons
On and after the Interest Payment Date on which the final Coupon comprised in
any Coupon sheet matures, the Talon (if any) forming part of such Coupon sheet
may be surrendered at the specified office of the Principal Paying Agent or
any other Paying Agent in exchange for a further Coupon sheet including (if
such further Coupon sheet does not include Coupons to (and including) the
final date for the payment of interest due in respect of the Bearer Covered
Bond to which it appertains) a further Talon, subject to the provisions of
Condition 8.
13. Notices
All notices regarding the Bearer Covered Bonds will be valid if published in a
leading English language daily newspaper of general circulation in London. It
is expected that any such newspaper publication will be made in the Financial
Times in London. The Issuer will also ensure that notices are duly published
in a manner which complies with the rules of any stock exchange or other
relevant authority on which the Bearer Covered Bonds are for the time being
listed or by which they have been admitted to trading. Any such notice will
be deemed to have been given on the date of the first publication or, where
required to be published in more than one newspaper, on the date of the first
publication in all required newspapers or where published in such
newspapers. If publication as provided above is not practicable, a notice
will be given in such other manner, and will be deemed to have been given on
such date, as the Bond Trustee approves.
All notices regarding the Registered Covered Bonds will be deemed to be
validly given if sent by first class mail or (if posted to an address
overseas) by airmail to the holders (or the first named of joint holders) at
their respective addresses recorded in the Register and will be deemed to have
been given on the fourth day after mailing and, in addition, for so long as
any Registered Covered Bonds are admitted to trading on a stock exchange and
the rules of that stock exchange (or any other relevant authority) so require,
such notice will be published in a daily newspaper of general circulation in
the place or places required by those rules.
Until such time as any Definitive Covered Bonds are issued, there may, so long
as the Covered Bonds are represented in their entirety by any Global Covered
Bonds held on behalf of Euroclear and/or Clearstream, Luxembourg, be
substituted for such publication in such newspaper(s) or such mailing the
delivery of the relevant notice to Euroclear and/or Clearstream, Luxembourg
for communication by them to the Covered Bondholders and, in addition, for so
long as any Covered Bonds are listed on a stock exchange or admitted to
trading by any other relevant authority and the rules of that stock exchange,
or as the case may be, other relevant authority so require, such notice or
notices will be published in a daily newspaper of general circulation in the
place or places required by those rules. Any such notice will be deemed to
have been given to the Covered Bondholders on the day on which the said notice
was given to Euroclear and/or Clearstream, Luxembourg.
All notices regarding the A$ Registered Covered Bonds will be deemed to be
validly given if sent by pre-paid post or (if posted to an address overseas)
by airmail to, or left at the address of, the holders (or the first named of
joint holders) at their respective addresses recorded in the A$ Register and
will be deemed to have been given on the fourth day after mailing and, in
addition, for so long as any A$ Registered Covered Bonds are admitted to
trading on a stock exchange and the rules of that stock exchange (or any other
relevant authority) so require, such notice will be published in a daily
newspaper of general circulation in the place or places required by those
rules. For so long as the A$ Registered Covered Bonds are lodged in the
Austraclear System there may be substituted for such, publication in the
Australian Financial Review or The Australian or mailing the delivery of the
relevant notice to Austraclear for communication by it to the holders of
beneficial interests in the A$ Registered Covered Bonds and, in addition, for
so long as any A$ Registered Covered Bonds are listed on a stock exchange or
admitted to trading by any other relevant authority and the rules of that
stock exchange, or as the case may be, other relevant authority so require,
such notice or notices will be published in a daily newspaper of general
circulation in the place or places required by those rules. Any such notice
will be deemed to have been given to the holders of beneficial interests in
the A$ Registered Covered Bonds on the day on which the said notice was given
to Austraclear.
Notices to be given by any Covered Bondholder (other than in relation to A$
Registered Covered Bonds) to the Issuer will be in writing and given by
lodging the same, together (in the case of any Covered Bond in definitive
form) with the relative Covered Bond or Covered Bonds, with the Principal
Paying Agent (in the case of the Bearer Covered Bonds), or the Registrar (in
the case of Registered Covered Bonds). Whilst any of the Covered Bonds are
represented by a Global Covered Bond, such notice may be given by any holder
of a Covered Bond to the Principal Paying Agent or the Registrar through
Euroclear and/or Clearstream, Luxembourg, as the case may be, in such manner
as the Principal Paying Agent, the Registrar and Euroclear and/or Clearstream,
Luxembourg, as the case may be, may approve for this purpose. Notices to be
given by any Covered Bondholder in respect of A$ Registered Covered Bonds to
the Issuer will be in writing and must be (i) sent by pre-paid post or (if
posted to an address overseas) by airmail to; or (ii) left at the address of,
the Issuer and will be deemed to have been given on the fourth day after
mailing or on the day of delivery, respectively.
14.
Meetings of Covered Bondholders, Modification, Waiver and Substitution
Covered Bondholders, Couponholders and other Secured Creditors should note
that the Issuer, the Covered Bond Guarantor and (other than in relation to A$
Registered Covered Bonds) the Principal Paying Agent may without their consent
or the consent of the Bond Trustee or the Security Trustee agree to modify any
provision of any Final Terms which is of a formal, minor or technical nature
or is made to correct a manifest error or to comply with any mandatory
provisions of law.
The Bond Trust Deed contains provisions for convening meetings (including by
way of conference call or by use of a videoconference platform) of the Covered
Bondholders of any Series to consider any matter affecting their interests,
including the modification of these Conditions or the provisions of the Bond
Trust Deed. The quorum at any such meeting in respect of the Covered Bonds
of any Series for passing an Extraordinary Resolution (other than in respect
of a Series Reserved Matter) is one or more persons holding or representing
not less than a clear majority of the aggregate Principal Amount Outstanding
of the Covered Bonds of such Series for the time being outstanding, or at any
adjourned meeting one or more persons being or representing the Covered
Bondholders of such Series whatever the Principal Amount Outstanding of the
Covered Bonds of such Series so held or represented, except that at any
meeting the business of which includes any Series Reserved Matter, the quorum
for any such meeting will be one or more persons holding or representing not
less than two-thirds of the aggregate Principal Amount Outstanding of the
Covered Bonds of such Series for the time being outstanding or at any
adjourned meeting, the business of which includes any Series Reserved Matter,
the quorum will be one or more persons holding or representing not less than
one third of the aggregate Principal Amount Outstanding of the Covered Bonds
of such Series for the time being outstanding. The expression Extraordinary
Resolution when used in these Conditions means: (a) a resolution passed at a
meeting of the Covered Bondholders duly convened and held in accordance with
the Bond Trust Deed by a majority consisting of not less than three-fourths of
the persons voting thereat upon a show of hands or if a poll is duly demanded
by a majority consisting of not less than three fourths of the votes cast on
such poll; or (b) a resolution in writing signed by or on behalf of Covered
Bondholders holding not less than three-fourths in Principal Amount
Outstanding of the Covered Bonds then outstanding, which resolution in writing
may be contained in one document or in several documents in like form each
signed by or on behalf of one or more of the Covered Bondholders; or (c) a
resolution passed by way of electronic consents given by holders through the
relevant clearing system(s) (in a form satisfactory to the Bond Trustee) by or
on behalf of the Covered Bondholders of not less than three-fourths in
Principal Amount Outstanding for the time being outstanding of the Covered
Bonds (of the relevant Series or all Series, as applicable). An Extraordinary
Resolution passed at any meeting of the Covered Bondholders of a Series will,
subject as provided below, be binding on all the Covered Bondholders of such
Series, whether or not they are present at the meeting, and on all
Couponholders in respect of such Series of Covered Bonds. Pursuant to the
Bond Trust Deed, the Bond Trustee may convene a single meeting of the holders
of Covered Bonds of more than one Series if in the opinion of the Bond Trustee
there is no conflict between the respective interests of such Covered
Bondholders, in which event the provisions of this paragraph will apply
thereto mutatis mutandis.
Notwithstanding the provisions of the immediately preceding paragraph, any
Extraordinary Resolution to direct the Bond Trustee to accelerate the Covered
Bonds pursuant to Condition 9 or to give a Covered Bond Guarantee Acceleration
Notice pursuant to Condition 9 or to direct the Bond Trustee or the Security
Trustee or to direct the Bond Trustee to direct the Security Trustee to take
any enforcement action or to direct the Bond Trustee to determine that any
Issuer Event of Default, Potential Issuer Event of Default, Covered Bond
Guarantor Event of Default or Potential Covered Bond Guarantor Event of
Default will not be treated as such for the purposes of the Bond Trust Deed
(each a Programme Resolution) and will only be capable of being passed at a
single meeting of the Covered Bondholders of all Series then outstanding.
Any such meeting to consider a Programme Resolution may be convened by the
Issuer, the Covered Bond Guarantor or the Bond Trustee or by the Covered
Bondholders of any Series. The quorum at any such meeting for passing a
Programme Resolution is one or more persons holding or representing at least a
clear majority of the aggregate Principal Amount Outstanding of the Covered
Bonds of all Series for the time being outstanding or at any adjourned such
meeting one or more persons holding or representing Covered Bonds whatever the
Principal Amount Outstanding of the Covered Bonds of any Series so held or
represented. A Programme Resolution passed at any meeting of the Covered
Bondholders of all Series will be binding on all the Covered Bondholders of
all Series, whether or not they are present at the meeting, and on all related
Couponholders.
In connection with any meeting of the holders of Covered Bonds of more than
one Series where such Covered Bonds are not denominated in Australian Dollars,
the Principal Amount Outstanding of the Covered Bonds of any Series not
denominated in Australian Dollars must be converted into Australian Dollars at
the relevant Covered Bond Swap Rate.
The Bond Trustee may (and in the case of any modification contemplated by
clause 21.1(c) of the Bond Trust Deed, the Bond Trustee must), without the
consent or sanction of any of the Covered Bondholders of any Series, the
related Couponholders and without the consent or sanction of the other Secured
Creditors (other than any Secured Creditor who is party to the relevant
document), at any time and from time to time, concur with the Issuer, the
Covered Bond Guarantor (acting on the directions of the Trust Manager) or any
other party and/or direct the Security Trustee to concur with the Issuer, the
Covered Bond Guarantor (acting at the direction of the Trust Manager) or any
other party in making:
(a) any modification (other than in relation to a Series
Reserved Matter) to the Covered Bonds of one or more Series, the related
Coupons or any Programme Document which in the opinion of the Bond Trustee is
not materially prejudicial to the interests of the Covered Bondholders of any
Series;
(b) any modification to the Covered Bonds of one or more Series,
the related Coupons or any Programme Document which is in the opinion of the
Bond Trustee of a formal, minor or technical nature, or in the opinion of the
Bond Trustee is made to correct a manifest error or to comply with mandatory
provisions of law (and for this purpose the Bond Trustee may disregard whether
any such modification relates to a Series Reserved Matter); or
(c) any modification contemplated by clause 21.4 of the Bond
Trust Deed.
In forming an opinion as to whether a modification is of a formal, minor or
technical nature or is being made to correct a manifest error or to comply
with mandatory provisions of law or is contemplated by clause 21.4 of the Bond
Trust Deed, the Bond Trustee may have regard to any evidence it considers
reasonable to rely on including (without any obligation to rely on any of the
following) (i) a certificate from the Issuer (a) stating the intention of the
parties to the relevant Programme Documents; (b) stating that such
modification is required to reflect such intention; and (c) confirming that
nothing has been said to, or by, initial or subsequent investors or other
parties which is any way inconsistent with the stated intention; and (ii) a
Rating Affirmation Notice.
Notwithstanding the above the Bond Trustee will not be obliged to agree to any
amendment, which, in the sole opinion of the Bond Trustee, would have the
effect of (i) exposing the Bond Trustee, to any liability against which it has
not been indemnified and/or secured and/or pre-funded to its satisfaction or
(ii) increasing the obligations or duties, or decreasing the protections, of
the Bond Trustee, in the Bond Trust Deed, the other Programme Documents and/or
the Conditions.
The Bond Trustee may without the consent or sanction of any of the Covered
Bondholders of any Series, the related Couponholders and without the consent
of any other Secured Creditor and without prejudice to its rights in respect
of any subsequent breach, Issuer Event of Default, Potential Issuer Event of
Default, Covered Bond Guarantor Event of Default or Potential Covered Bond
Guarantor Event of Default from time to time and at any time but only if in so
far as in its opinion the interests of the Covered Bondholders of any Series
will not be materially prejudiced thereby, waive or authorise, or direct the
Security Trustee to waive or authorise, any breach or proposed breach by the
Issuer or the Covered Bond Guarantor or any other person of any of the
covenants or provisions contained in the Bond Trust Deed, the other Programme
Documents or the Conditions or determine that any Issuer Event of Default,
Potential Issuer Event of Default, Covered Bond Guarantor Event of Default or
Potential Covered Bond Guarantor Event of Default will not be treated as such
for the purposes of the Bond Trust Deed, PROVIDED ALWAYS THAT the Bond Trustee
must not exercise any powers conferred on it in contravention of any express
direction given by Extraordinary Resolution or by a request under Condition
9(a) or 9(b) but so that no such direction or request will affect any waiver,
authorisation or determination previously given or made. Any such waiver,
authorisation or determination may be given or made on such terms and subject
to such conditions (if any) as the Bond Trustee may determine, will be binding
on the Covered Bondholders, the related Couponholders and, if, but only if,
the Bond Trustee requires, must be notified by the Issuer or the Covered Bond
Guarantor (acting at the direction of the Trust Manager) (as the case may be)
to the Covered Bondholders in accordance with Condition 13 as soon as
practicable thereafter.
Subject to as provided below, the Bond Trustee will be bound to waive or
authorise, or direct the Security Trustee to waive or authorise, any breach or
proposed breach by the Issuer or the Covered Bond Guarantor or any other
person of any of the covenants or provisions contained in the Bond Trust Deed,
the other Programme Documents or the Conditions or determine that any Issuer
Event of Default, Potential Issuer Event of Default, Covered Bond Guarantor
Event of Default or Potential Covered Bond Guarantor Event of Default will not
be treated as such for the purposes of the Bond Trust Deed if it is: (i) in
the case of such waiver or authorisation, (a) so directed by an Extraordinary
Resolution of the Covered Bondholders of the relevant one or more Series (with
the Covered Bonds of all such Series taken together as a single Series in the
circumstances provided in the Bond Trust Deed and, if applicable, converted
into Australian Dollars at the relevant Covered Bond Swap Rate); or (b)
requested to do so in writing by the holders of not less than 25 per cent. of
the Principal Amount Outstanding of the Covered Bonds of the relevant one or
more Series (with the Covered Bonds of all such Series taken together as a
single Series in the circumstances provided in the Bond Trust Deed and, if
applicable, converted into Australian Dollars at the relevant Covered Bond
Swap Rate); or (ii), in the case of any such determination, (a) so directed by
an Extraordinary Resolution of the Covered Bondholders of all Series then
outstanding with the Covered Bonds of all Series taken together as a single
Series and, if applicable, converted into Australian Dollars at the relevant
Covered Bond Swap Rate) or (b) requested to do so in writing by the holders of
not less than 25 per cent. of the Principal Amount Outstanding of the Covered
Bonds of all Series then outstanding (with the Covered Bonds of all Series
taken together as a single Series and, if applicable, converted into
Australian Dollars as stated above), and at all times then only if it is
indemnified and/or secured and/or pre-funded to its satisfaction against all
Liabilities to which it may thereby render itself liable or which it may incur
by so doing.
The Security Trustee may, without the consent of the Covered Bondholders
and/or Couponholders of any Series and without the consent of the other
Secured Creditors (other than any Secured Creditor who is party to the
relevant document) and without prejudice to their rights in respect of any
subsequent breach, Issuer Event of Default, Potential Issuer Event of Default,
Covered Bond Guarantor Event of Default or Potential Covered Bond Guarantor
Event of Default from time to time and at any time, but only if (for so long
as any Covered Bonds are outstanding) it is instructed by the Bond Trustee in
accordance with the Bond Trust Deed or (if no Covered Bonds are outstanding)
it is instructed by the Majority Secured Creditors, authorise or waive any
breach or proposed breach of any of the covenants or provisions contained in
the Covered Bonds of any Series, the Security Deed or any Programme Document
or determine that any Issuer Event of Default, Potential Issuer Event of
Default, Covered Bond Guarantor Event of Default or Potential Covered Bond
Guarantor Event of Default will not be treated as such for the purposes of the
Security Deed. Any such authorisation or waiver or modification will be
binding on the Covered Bondholders and/or Couponholders and the other Secured
Creditors and, unless the Bond Trustee and the Security Trustee otherwise
agree, will be notified by the Issuer or the Covered Bond Guarantor (or the
Trust Manager on its behalf) (as the case may be) to the Covered Bondholders
in accordance with Condition 13 and each Rating Agency as soon as practicable
thereafter.
Any such modification, waiver, authorisation or determination will be binding
on all the Covered Bondholders of all Series of Covered Bonds for the time
being outstanding, the related Couponholders and the other Secured Creditors,
and unless the Bond Trustee otherwise agrees, any such modification must be
notified by the Issuer, to the Covered Bondholders of all Series of Covered
Bonds in accordance with Condition 13 and to the Rating Agencies as soon as
practicable thereafter.
Where in connection with the exercise by it of any of its trusts, powers,
authorities and discretions (including, without limitation, any modification,
waiver, authorisation or determination), the Bond Trustee and the Security
Trustee are required to have regard to the general interests of the Covered
Bondholders of each Series as a class (but must not have regard to any
interests arising from circumstances particular to individual Covered
Bondholders or Couponholders whatever their number) and, in particular but
without limitation, must not have regard to the consequences of any such
exercise for individual Covered Bondholders, the related Couponholders
(whatever their number) resulting from their being for any purpose domiciled
or resident in, or otherwise connected with, or subject to the jurisdiction
of, any particular territory or any political sub-division thereof and the
Bond Trustee and the Security Trustee will not be entitled to require, nor
will any Covered Bondholder or Couponholder be entitled to claim, from the
Issuer, the Covered Bond Guarantor, the Bond Trustee, the Security Trustee or
any other person any indemnification or payment in respect of any tax
consequences of any such exercise upon individual Covered Bondholders and/or
Couponholders, except to the extent already provided for in Condition 7 and/or
in any undertaking or covenant given in addition to, or in substitution for,
Condition 7 pursuant to the Bond Trust Deed.
Notwithstanding any other provision of any Programme Document but subject to
clause 21.3 of the Bond Trust Deed, the Bond Trustee will be obliged to concur
in and effect any modifications to the Programme Documents that are requested
by the Covered Bond Guarantor or the Trust Manager to: (a) accommodate the
accession of a new Servicer, new Swap Provider, new Trust Manager, new Account
Bank, new Cover Pool Monitor or new Agent to the Programme provided that (i)
each of the Swap Providers have certified to the Bond Trustee and the Security
Trustee that they consent to such modification of those documents to which
they are a party (such consent not to be unreasonably withheld); (ii) two
Authorised Signatories of the Trust Manager have certified to the Bond Trustee
and the Security Trustee in writing that such modifications are required in
order to accommodate the addition of the new Servicer, new Swap Provider, new
Trust Manager, new Account Bank, new Cover Pool Monitor or new Agent to the
Programme; and (iii) two Authorised Signatories of the Trust Manager have
certified to the Security Trustee and the Bond Trustee that all other
conditions precedent to the accession of the new Servicer, new Swap Provider,
new Trust Manager, new Account Bank, or new Cover Pool Monitor or new Agent to
the Programme set out in the Programme Documents have been satisfied at the
time of the accession; (b) accommodate the removal of any one of the Rating
Agencies from the Programme or the addition of any Rating Agency, provided
that (i) at all times, there are at least two rating agencies rating the
Programme and any Covered Bonds then outstanding; and (ii) in respect of the
removal of any one of the Rating Agencies from the Programme only (A) the
Issuer has provided at least 30 calendar days' notice to the Covered
Bondholders of the proposed modification effecting the removal in the manner
provided in Condition 13 and by publication on Bloomberg on the "Company News"
screen relating to the Covered Bonds; and (B) Covered Bondholders holding, in
aggregate, at least 10 per cent. of the Principal Amount Outstanding of the
Covered Bonds of all Series then outstanding (with the Covered Bonds of all
Series taken together as a single Series and, if the nominal amount of the
Covered Bonds is not denominated in Australian Dollars, converted into
Australian Dollars at the relevant Swap Rate) have not notified the Bond
Trustee in writing (or otherwise in accordance with the then current practice
of any relevant Clearing System through which such Covered Bonds may be held)
within the notification period referred to in paragraph (b)(ii)(A) above that
such Covered Bondholders do not consent to the proposed modification effecting
the removal; (c) take into account any new covered bonds ratings criteria of
the Rating Agencies, or any changes or updates to, or any replacement of, the
covered bonds ratings criteria of the Rating Agencies (including, without
limitation, any manner in which a Rating Agency applies or construes any then
existing covered bonds ratings criteria), subject to receipt by the Bond
Trustee and the Security Trustee of a Rating Affirmation Notice from the
Issuer and receipt by the Bond Trustee and the Security Trustee of a
certificate signed by two Authorised Signatories of the Trust Manager each
certifying to the Bond Trustee and the Security Trustee that such
modifications are required in order to take into account any such new covered
bonds ratings criteria of the Rating Agencies, or any such changes or updates
to, or any replacement of, the covered bonds ratings criteria of the Rating
Agencies; (d) allow a Swap Provider to transfer securities as Swap Collateral
under a relevant Swap Agreement Credit Support Document, including to appoint
a custodian to hold such securities in a custody account pursuant to a custody
agreement; (e) enable N Covered Bonds to be issued under the Programme subject
to receipt by the Bond Trustee and the Security Trustee of a certificate
signed by two Authorised Signatories of the Issuer and a certificate of an
Authorised Signatory of the Trust Manager, each certifying to the Bond Trustee
and the Security Trustee that the requested amendments are to be made solely
for the purpose of the issuance of N Covered Bonds and that the requested
amendments are not, in the opinion of the Issuer or the Trust Manager,
materially prejudicial to the interests of any Covered Bondholders or any
Secured Creditor; (f) ensure compliance of the Programme, the Issuer or a Swap
Provider (as applicable) with, or ensure that the Programme, the Issuer or a
Swap Provider (as applicable) may benefit from (including if a Regulatory
Event occurred or was likely to occur), any existing, amended or new
legislation, regulation, directive, prudential standard or prudential guidance
note of any regulatory body (including APRA) in relation to covered bonds or a
Swap subject to receipt by the Bond Trustee and the Security Trustee of a
certificate signed by two Authorised Signatories of the Trust Manager each
certifying to the Bond Trustee and the Security Trustee that such
modifications are required in order to comply with or benefit from such
legislation, regulation, directive, prudential standard or prudential guidance
note. For the purposes of providing a certificate to the Bond Trustee and
the Security Trustee under this paragraph (f) relating to modifications in
connection with a Swap, the Trust Manager may rely on a certification by an
Authorised Signatory of the relevant Swap Provider; (g) permit the acquisition
(which, without limitation, may be initially in equity only) by the Covered
Bond Guarantor from the Seller of Mortgage Loan Rights originated by an entity
other than the Seller and to enable the Covered Bond Guarantor to protect or
perfect its title to such Mortgage Loan Rights, provided that such Mortgage
Loan Rights comply with the Eligibility Criteria at the time of their
acquisition by the Covered Bond Guarantor and the Issuer is reasonably
satisfied following discussions with the Rating Agencies that the ratings then
assigned by the Rating Agencies to any Covered Bonds or the Programme will not
be subject to a downgrade, withdrawal or qualification; or (h) accommodate the
accession of BOQ Specialist Bank Limited as a new Seller to the Programme
provided that (i) the Trust Manager has certified to the Security Trustee and
the Bond Trustee in writing that such modifications are required in order to
accommodate the addition of BOQ Specialist Bank Limited as a new Seller to the
Programme; and (ii) the Trust Manager has certified to the Security Trustee
and the Bond Trustee in writing that all other conditions precedent to the
accession of BOQ Specialist Bank Limited as a new Seller to the Programme set
out in the Programme Documents have been satisfied at the time of the
accession.
In the case of a modification falling within paragraph (b)(ii) of the
immediately preceding paragraph, if Covered Bondholders holding, in aggregate,
at least 10 per cent. of the Principal Amount Outstanding of the Covered Bonds
of all Series then outstanding (with the Covered Bonds of all Series taken
together as a single Series and, if the nominal amount of the Covered Bonds is
not denominated in Australian Dollars, converted into Australian Dollars at
the relevant Swap Rate) have notified the Bond Trustee in writing (or
otherwise in accordance with the then current practice of any relevant
Clearing System through which such Covered Bonds may be held) within the
notification period referred to in paragraph (b)(ii)(A) above that they do not
consent to the proposed modification effecting the removal (an Objected
Modification), then such Objected Modification will not be made unless the
foregoing provisions of this Condition 14 are satisfied with respect to such
Objected Modification. Objections made in writing other than through the
relevant Clearing System must be accompanied by evidence to the Bond Trustee's
satisfaction (having regard to prevailing market practices) of the relevant
Covered Bondholder's holding of the Covered Bonds.
Substitution
The Bond Trust Deed provides that the Bond Trustee may, without the consent or
sanction of the Covered Bondholders or Couponholders agree, to the
substitution in place of the Issuer (or of any previous substitute under this
Condition) as the principal debtor under the Covered Bonds, Coupons and the
Bond Trust Deed of another company, being a subsidiary of the Issuer subject
to (a) the Bond Trustee being satisfied that the interests of the Covered
Bondholders will not be materially prejudiced by the substitution and (b)
certain other conditions set out in the Bond Trust Deed being complied with.
The Bond Trust Deed provides that in connection with any scheme of
amalgamation or reconstruction of the Issuer not involving the bankruptcy or
insolvency of the Issuer and (A) where the Issuer does not survive the
amalgamation or reconstruction or (B) where all or substantially all of the
assets and business of the Issuer will be disposed of to, or succeeded to, by
another entity (whether by operation of law or otherwise), the Bond Trustee
will, if requested by the Issuer, be obliged, without the consent or sanction
of the Covered Bondholders or Couponholders, at any time to agree to the
substitution in the place of the Issuer (or of the previous substitute) as
principal debtor under the Bond Trust Deed (the Substituted Debtor) being the
entity with and into which the Issuer amalgamates or the entity to which all
or substantially all of the business and assets of the Issuer is transferred,
or succeeded to, pursuant to such scheme of amalgamation or reconstruction
(whether by operation of law or otherwise), subject to, inter alia:
(a) the Substituted Debtor entering into a supplemental trust
deed or some other form of undertaking in form and manner satisfactory to the
Bond Trustee agreeing to be bound by the Bond Trust Deed with any
consequential amendments which the Bond Trustee may deem appropriate as fully
as if the Substituted Debtor had been named in the Bond Trust Deed as
principal debtor or guarantor in place of the Issuer;
(b) the Substituted Debtor acquiring or succeeding to pursuant
to such scheme of amalgamation or reconstruction all or substantially all of
the assets and business of the Issuer; and
(c) confirmations being received by the Bond Trustee from each
Rating Agency that the substitution will not adversely affect the current
rating of the Covered Bonds.
Any such supplemental trust deed or undertaking will, if so expressed, operate
to release the Issuer or the previous substitute as stated above from all of
its obligations as principal debtor under the Bond Trust Deed.
Any substitution pursuant to this Condition 14 will be binding on the Covered
Bondholders and the Couponholders and, unless the Bond Trustee agrees
otherwise, will be notified by the Issuer to the Covered Bondholders not later
than 14 days after any such substitution in accordance with Condition 13.
It will be a condition of any substitution pursuant to this Condition 14 that
the Covered Bond Guarantee will remain in place or be modified to apply
mutatis mutandis and continue in full force and effect in relation to any
Substituted Debtor.
For the purposes of this Condition 14:
Potential Issuer Event of Default means any condition, event or act which,
with the lapse of time and/or the issue, making or giving of any notice,
certification, declaration, demand, determination and/or request and/or the
taking of any similar action and/or the fulfilment of any similar condition,
would constitute an Issuer Event of Default;
Potential Covered Bond Guarantor Event of Default means any condition, event
or act which, with the lapse of time and/or the issue, making or giving of any
notice, certification, declaration, demand, determination and/or request
and/or the taking of any similar action and/or the fulfilment of any similar
condition, would constitute a Covered Bond Guarantor Event of Default; and
Series Reserved Matter in relation to Covered Bonds of a Series means: (i)
reduction or cancellation of the amount payable or, where applicable,
modification of the method of calculating the amount payable or modification
of the date of payment or, where applicable, modification of the method of
calculating the date of payment in respect of any principal or interest in
respect of the Covered Bonds; (ii) alteration of the currency in which
payments under the Covered Bonds and Coupons are to be made, other than
pursuant to Condition 5(i); (iii) alteration of the quorum or majority
required to pass an Extraordinary Resolution; (iv) any amendment to the
Covered Bond Guarantee or the Security Deed (other than any amendment that
Bond Trustee determines is not materially prejudicial to the interests of the
Covered Bondholders of any Series or any amendment which is of a formal, minor
or technical nature or is in the opinion of the Bond Trustee made to correct a
manifest error or proven error or to comply with mandatory provisions of law);
(v) except in accordance with Condition 6(h) or the provision relating to
substitution in this Condition 14, the sanctioning of any scheme or proposal
for the exchange or sale of the Covered Bonds for or the conversion of the
Covered Bonds into, or the cancellation of the Covered Bonds in consideration
of, shares, stock, Covered Bonds, bonds, debentures, debenture stock and/or
other obligations and/or securities of the Issuer or any other company formed
or to be formed, or for or into or in consideration of cash, or partly for or
into or in consideration of such shares, stock, bonds, Covered Bonds,
debentures, debenture stock and/or other obligations and/or securities as
stated above and partly for or into or in consideration of cash and for the
appointment of some person with power on behalf of the Covered Bondholders to
execute an instrument of transfer of the Registered Covered Bonds held by them
in favour of the persons with or to whom the Covered Bonds are to be exchanged
or sold respectively; and (vi) alteration of the proviso to paragraph 5 or
paragraph 6 of Schedule 4 to the Bond Trust Deed or the alteration of this
definition.
15. Indemnification of the Bond Trustee and the Security Trustee
and the Bond Trustee and Security Trustee contracting with the Issuer and/or
the Covered Bond Guarantor
If, in connection with the exercise of its powers, trusts, authorities or
discretions the Bond Trustee is of the opinion that the interests of the
Covered Bondholders of any one or more series would be materially prejudiced
thereby, the Bond Trustee will not exercise such power, trust, authority or
discretion without the approval of such Covered Bondholders of the relevant
Series by Extraordinary Resolution or by a direction in writing of such
Covered Bondholders of at least 25 per cent. of the Principal Amount
Outstanding of Covered Bonds of the relevant Series then outstanding or as
otherwise required under the Programme Documents.
The Bond Trust Deed and the Security Deed contain provisions for the
indemnification of the Bond Trustee and the Security Trustee and for their
relief from responsibility, including provisions relieving them from taking
any action unless indemnified and/or secured and/or prefunded to their
satisfaction.
The Bond Trust Deed and the Security Deed also contain provisions pursuant to
which each of the Bond Trustee and Security Trustee, respectively, is
entitled, inter alia: (i) to enter into business transactions with the Issuer,
the Covered Bond Guarantor and/or any of their respective Subsidiaries and
affiliates and to act as trustee for the holders of any other securities
issued or guaranteed by, or relating to, the Issuer, the Covered Bond
Guarantor and/or any of their respective Subsidiaries and affiliates; (ii) to
exercise and enforce its rights, comply with its obligations and perform its
duties under or in relation to any such transactions or, as the case may be,
any such trusteeship without regard to the interests of, or consequences for,
the Covered Bondholders or Couponholders or the other Secured Creditors and
(iii) to retain and not be liable to account for any profit made or any other
amount or benefit received thereby or in connection therewith.
The Bond Trustee will not be responsible for any loss, expense or liability
which may be suffered as a result of any Mortgage Loan Rights, or any deeds or
documents of title thereto, being uninsured or inadequately insured or being
held by clearing organisations or their operators or by intermediaries such as
banks, brokers or other similar persons whether or not on behalf of the Bond
Trustee. The Bond Trustee will not be responsible for: (i) supervising the
performance by the Issuer or any other party to the Programme Documents of
their respective obligations under the Programme Documents and the Bond
Trustee will be entitled to assume, until it has written notice to the
contrary, that all such persons are properly performing their duties; (ii)
considering the basis on which approvals or consents are granted by the Issuer
or any other party to the Programme Documents under the Programme Documents;
(iii) monitoring the Mortgage Loan Rights then forming part of the Assets of
the Trust, including whether the Asset Coverage Test is satisfied or otherwise
or the Legislated Collateralisation Test is satisfied or otherwise or the
Amortisation Test is satisfied or otherwise; or (iv) monitoring whether a
Mortgage Loan is an Eligible Mortgage Loan. The Bond Trustee will not be
liable to any Covered Bondholder or other Secured Creditor for any failure to
make or to cause to be made on its behalf the searches, investigations and
enquiries which would normally be made by a prudent secured creditor in
relation to the Security and have no responsibility in relation to the
legality, validity, sufficiency and enforceability of the Security and the
Programme Documents.
The Security Trustee will not be responsible: (i) for any liability whatsoever
for acting in accordance with any resolution of the Covered Bondholders; (ii)
for the notification of the happening or continuance of a Covered Bond
Guarantor Event of Default to the Secured Creditors; (iii) for any examination
or enquiry into, nor be liable for any defect or failure in, the title of the
Covered Bond Guarantor to any Charged Property; (iv) under any liability
whatsoever for any failure to take action in respect of a breach by the
Covered Bond Guarantor of its duties as trustee of the Trust or in respect of
a Covered Bond Guarantor Event of Default of which it is not actually aware;
(v) for the form or contents of any Programme Document and will not be liable
as a result of or in connection with any inadequacy, invalidity or
unenforceability of any provision of any Programme Documents except insofar
that it applies to the Security Trustee or to any representation and warranty
given by the Security Trustee; and (vi) for supervising or monitoring the
performance by the Issuer or any other party to the Programme Documents of
their respective obligations under the Programme Documents and the Security
Trustee will be entitled to assume, until it has written notice to the
contrary, that all such persons are properly performing their duties.
The Bond Trustee may refrain from taking any action or exercising any right,
power, authority or discretion vested in it relating to the transactions
contemplated in the Programme Documents until it has been indemnified and/or
secured and/or prefunded to its satisfaction against any and all actions,
charges, claims, costs, damages, demands, expenses, liabilities, losses and
proceedings which might be sustained by it as a result and will not be
required to do anything which may cause it to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its
duties or in the exercise of any of its rights, powers, authorities or
discretions if it has reasonable grounds for believing that repayment of such
funds or adequate indemnity, security or prefunding against such liability is
not assured to it.
The Security Trustee may refrain from taking steps (other than the steps in
relation to the enforcement of the Security) under the Security Deed or any of
the other Programme Documents or exercise any of its powers, rights, trusts,
authorities, duties, functions or discretions (including to require anything
to be done, form any opinion or view, make any determination or give any
notice, consent, waiver or approval) under or pursuant to the Security Deed or
any other Programme Document to which the Security Trustee is a party without
first taking instructions from the Bond Trustee (so long as there are any
Covered Bonds outstanding) (provided that the Security Trustee is not required
to seek instructions from the Bond Trustee in relation to the release of
Security (as set out in the Security Deed) or any investments in Authorised
Investments) or (if there are no Covered Bonds outstanding) the Majority
Secured Creditors; and the Security Trustee has been indemnified and/or
secured to its satisfaction as aforesaid and provided always that the Security
Trustee will not be bound to take any enforcement proceedings which may, in
the opinion of the Security Trustee in its absolute discretion, result in the
Security Trustee failing to receive any payment to which it is or would be
entitled.
16. Further Issues
The Issuer will be at liberty from time to time without the consent of the
Covered Bondholders or the Couponholders to create and issue further Covered
Bonds having terms and conditions the same as the Covered Bonds of any Series
or the same in all respects save for the amount and date of the first payment
of interest thereon, issue date and/or purchase price and so that the same
will be consolidated and form a single Series with the outstanding Covered
Bonds of such Series.
17. Non-petition and limited recourse
Only the Security Trustee (acting on the directions of (for so long as there
any Covered Bonds outstanding) the Bond Trustee or (where no Covered Bonds are
outstanding) the Majority Secured Creditors) may pursue the remedies available
under the general law or under the Security Deed to enforce the Security and
no Transaction Party will be entitled to proceed directly against the Covered
Bond Guarantor to enforce the Security. In particular, each Transaction
Party (other than the Security Trustee, and in respect of certain rights, the
Bond Trustee) has agreed with the Covered Bond Guarantor and the Security
Trustee that, except to the extent provided for in the Programme Documents, it
will not: (i) take any steps for the purpose of recovering any Secured
Obligations; or (ii) enforcing any rights arising out of the Programme
Documents against the Covered Bond Guarantor or procuring the winding up of
the Trust, unless the Security Trustee, once bound to take any steps or
proceedings to enforce the Security pursuant to the Security Deed, fails to do
so within a reasonable time and such failure is continuing, in which case such
Secured Creditors will be entitled to take such steps or proceedings as it
deems necessary (other than presentation of a petition for the winding-up of
the Trust).
The Covered Bond Guarantor enters into the Programme Documents only in its
capacity as trustee of the Trust and in no other capacity. A liability arising
under or in connection with the Programme Documents is limited to and can be
enforced against the Covered Bond Guarantor only to the extent to which it can
be satisfied out of the property of the Trust out of which the Covered Bond
Guarantor is actually indemnified for the liability. This limitation of the
Covered Bond Guarantor's liability applies despite any other provision of the
Programme Documents and extends to all liabilities and obligations of the
Covered Bond Guarantor in any way connected with any representation, warranty,
conduct, omission, agreement or transaction related to the Programme
Documents.
The parties other than the Covered Bond Guarantor may not sue the Covered Bond
Guarantor in any capacity other than as trustee of the Trust, including to
seek the appointment of a receiver (except in relation to property of the
Trust), a liquidator, an administrator or any similar person to the Covered
Bond Guarantor or prove in any liquidation, administration or arrangement of
or affecting the Covered Bond Guarantor (except in relation to property of the
Trust).
The provisions of this Condition 17 will not apply to any obligation or
liability of the Covered Bond Guarantor to the extent that it is not satisfied
because under the Programme Documents or by operation of law there is a
reduction in the extent of the Covered Bond Guarantor's indemnification out of
the assets of the Trust, as a result of the Covered Bond Guarantor's fraud,
negligence or wilful default.
It is acknowledged that the parties are each responsible under the Programme
Documents for performing a variety of obligations relating to the Trust. No
act or omission of the Covered Bond Guarantor (including any related failure
to satisfy its obligations or breach of representation or warranty under the
Programme Documents) will be considered fraud, negligence or wilful default of
the Covered Bond Guarantor for the purpose of the preceding paragraph to the
extent to which the act or omission was caused or contributed to by any
failure by any party or any other person to fulfil its obligations relating to
the Trust or by any other act or omission of any party, the Servicer, the
Seller, the Cover Pool Monitor or any other person.
No attorney, agent, receiver or receiver and manager appointed in accordance
with the Programme Documents has authority to act on behalf of the Covered
Bond Guarantor in a way which exposes the Covered Bond Guarantor to any
personal liability and no act or omission of any such person will be
considered fraud, negligence or wilful default of the Covered Bond Guarantor
for the purpose of the preceding paragraph.
The Covered Bond Guarantor is not obliged to do or refrain from doing anything
under the Programme Documents (including incur any liability) unless the
Covered Bond Guarantor's liability is limited in the same manner as set out
above.
Notwithstanding any other provisions of the Programme Documents, each party to
the Programme Documents (other than the Security Trustee) agrees with and
acknowledges to the Security Trustee that the Security Trustee enters into
each Programme Document to which it is a party only in its capacity as trustee
of the Security Trust and in no other capacity and that the Security Trustee
will have no liability under or in connection with the Programme Documents
(whether to the Secured Creditors, the Covered Bond Guarantor or any other
person) other than to the extent to which the liability is able to be
satisfied out of the property of the Security Trust from which the Security
Trustee is actually indemnified for the liability. This limitation will not
apply to a liability of the Security Trustee to the extent that it is not
satisfied because, under the Programme Documents or by operation of law, there
is a reduction in the extent of the Security Trustee's indemnification as a
result of the Security Trustee's fraud, negligence or wilful default. Nothing
in this Condition 17 or any similar provision in any other Programme Document
limits or adversely affects the powers of the Security Trustee, any receiver
or attorney in respect of the Charge or the Charged Property, in relation to
the Trust.
To the extent permitted by law, no recourse under any obligation, covenant, or
agreement of any person contained in the Programme Documents may be had
against any shareholder, officer, agent or director of such person as such, by
the enforcement of any assessment or by any legal proceeding, by virtue of any
statute or otherwise; it being expressly agreed and understood that the
Programme Documents are corporate obligations of each person expressed to be a
party thereto and no personal liability will attach to or be incurred by the
shareholders, officers, agents or directors of such person as such, or any of
them, under or by reason of any of the obligations, covenants or agreements of
such person contained in the Programme Documents, or implied therefrom, and
that any and all personal liability for breaches by such person of any of such
obligations, covenants or agreements, either under any applicable law or by
statute or constitution, of every such shareholder, officer, agent or director
is expressly waived by each person expressed to be a party thereto as a
condition of and consideration for execution of the Programme Documents.
18. Contracts (Rights of Third Parties) Act 1999
No person will have any right to enforce any term or condition of this Covered
Bond under the Contracts (Rights of Third Parties) Act 1999.
19.
Governing Law
The Bond Trust Deed (including the Covered Bond Guarantee), the Principal
Agency Agreement, the Covered Bonds (other than any A$ Registered Covered
Bonds) and the Coupons and any non‑contractual obligations arising out of or
in connection with them are governed by, and will be construed in accordance
with, English law unless specifically stated to the contrary (in this regard,
the covenant to pay made by the Issuer to the Bond Trustee in respect of the
A$ Registered Covered Bonds in the Bond Trust Deed, the provisions relating to
the maintenance of the Register in respect of the A$ Registered Covered Bonds
in the Bond Trust Deed and the provisions relating to the limitation of
liability of the Covered Bond Guarantor in the Bond Trust Deed, the Principal
Agency Agreement and the Covered Bonds are governed by, and will be construed
in accordance with, the laws applying in the State of New South Wales,
Australia). The A$ Registry Agreement and the A$ Registered Covered Bonds
are governed by, and will be construed in accordance with the laws applying in
the State of New South Wales, Australia unless specifically stated to the
contrary.
Use of Proceeds
The net proceeds from each issue of Covered Bonds will be used by the Issuer
to maintain a prudential level of liquidity and to finance the Australian
commercial business operations of the Issuer.
Bank of Queensland Limited
Overview
BOQ is one of Australia's leading regional banks, having served customers for
149 years. It is listed on the ASX and regulated by APRA as an authorised
deposit-taking institution (ADI). BOQ is included in the ASX 100 index.
During BOQ's long history, it has evolved from a Queensland focussed, retail
branch-based bank to a nationally diversified financial services business with
a focus on niche commercial lending segments, highly specialised bankers, and
branches run by small business owners who are deeply anchored in their
communities.
BOQ provides a range of products and services to support the financial needs
of its customers and prides itself on building long-term customer
relationships that are digitally-enabled with a personal touch.
BOQ operates nationwide, through specialist bankers and digital channels. As
at 28 February 2023, BOQ operates through a network of 153 branches throughout
Australia including both owner managed and corporate branches, as well as
transaction centres.
Over time, BOQ has acquired a portfolio of brands that form the basis of its
multi-brand strategy. These different and complementary business lines
provides BOQ with a competitive advantage due to BOQ's specialised knowledge
in these niche segments.
BOQ Retail Brands
BOQ is the retail banking arm of the BOQ Group, which, as at 28 February 2023,
includes 153 branches across Australia offering a range of banking products.
BOQ's 125 Owner Managed Branches ("OMBs") are run by local Owner Mangers who
understand the importance of delivering quality customer service and are
deeply committed to the communities in which they operate. Virgin Money
Australia ("VMA") is a digital-first retail financial services company which
provides a wide range of financial products that are easy to understand and is
a compelling alternative to the 'big banks'. The BOQ Group acquired VMA in
2013 and it operates as a standalone brand within the BOQ Group.
ME is an online retail bank, which provides a wide range of banking products
to customers through mobile bankers, direct channels and brokers. ME was
acquired by the BOQ Group in July 2021 and operates as a distinct brand within
the BOQ Group.
BOQ Business Brands
BOQ Business is a relationship-led business with specialist bankers providing
client solutions across small business, agribusiness, corporate banking,
property finance, healthcare and retirement, and tourism, leisure and
hospitality. BOQ Business also works closely with the Owner-Manager network
to support commercial customers who value a close business banking
relationship.
BOQ Finance is a wholly-owned subsidiary of BOQ specialising in asset finance
and leasing solutions. BOQ Finance is a mid-market financier providing deep
industry and product skills to its partner base. BOQ Finance has been
operating in the Australian and New Zealand markets for more than 45 years.
BOQ Specialist delivers distinctive banking solutions to niche market segments
including medical, dental and veterinary professionals. The BOQ Group
acquired the business (previously Investec Professional Finance) from Investec
Bank (Australia) Limited in 2014. BOQ Specialist operates as a niche brand
within BOQ's Business Bank.
The BOQ Group's business lines are supported by a number of BOQ Group
functions including Retail Banking, BOQ Business, People & Culture,
Finance, Operations, Risk, Public Affairs, Communication and Investor
Relations, Technology, Legal and Governance. These key functions support BOQ
by managing its operations, property, strategy, finance, treasury, technology
architecture, infrastructure and operations, risk, compliance, legal, human
resources and corporate affairs.
BOQ's registered office is located at Level 6, 100 Skyring Terrace, Newstead,
Queensland 4006 and its telephone number is +61 7 3212 3333.
Strategy
Strategic priorities
In February 2020, the BOQ Group announced a refreshed strategy underpinned by
its multi-brand strategy. BOQ has made significant progress in implementing
its strategy via its digital transformation, building scale and diversifying
its business with the acquisition of ME in 2021. Following the acquisition
of ME in 2021, BOQ has refined its strategic priorities.
In 2022, BOQ launched a new Group purpose: "Building social capital through
banking." BOQ's purpose is supported by four strategic pillars.
Using the strategic pillars BQQ is focused on building a stronger, simpler,
low cost digitally enabled bank that is differentiated through exceptional
customer and people experience.
Other developments
On 14 April 2023, BOQ announced that it will be undertaking an Integrated Risk
Program to strengthen its commitment to risk management and will reflect an
anticipated A$60 million cost of this program in its results for the half year
ended 28 February 2023. In addition, following a review of the carrying
amount of goodwill in accordance with the relevant Australian accounting
standards, BOQ has determined that it is appropriate to write-down A$200
million of goodwill. Both adjustments are non-cash items and appear within
the statutory net profit after tax in BOQ's results for the half year ended 28
February 2023, which are incorporated by reference and form part of this
Prospectus.
Directors and Company Secretary of BOQ
As at the date of this Prospectus there are no existing or potential conflicts
of interests between any duties owed to BOQ by its Directors or the Company
Secretary and the private interests or external duties of those Directors or
the Company Secretary. The 2022 Annual Report and 2023 Half Year Report set
out key management personnel disclosures, which are incorporated by reference
and form part of this Prospectus.
The Directors of BOQ, the business address of each of whom should be regarded
for the purposes of this Prospectus as Level 6, 100 Skyring Terrace, Newstead,
Queensland 4006 and their respective principal outside activities, where
significant, are at the date of this Prospectus as follows:
Directors
The Directors of BOQ as at the date of this Prospectus are:
Name, qualifications and independence status Experience, special responsibilities and other Directorships
Patrick Allaway Mr Allaway was appointed as Managing Director & Chief Executive Officer of
BOQ on 27 March 2023 for a period up to December 2024, following his role as
BA/LLB Executive Chairman.
Mr Allaway has extensive senior executive, non-executive and corporate
advisory experience across the financial services, property, media and retail
Managing Director and Chief Executive Officer sectors.
Mr Allaway's executive career was in financial services with Citibank and
Swiss Bank Corporation (now UBS) working in Sydney, New York, Zurich and
London. Mr Allaway was Managing Director SBC Capital Markets & Treasury
with direct responsibility for a global business.
Mr Allaway brings over 30 years of experience in financial services across
financial markets, capital markets and corporate advisory. This included an
advisory role in the media sector, responding to considerable digital
disruption.
Mr Allaway has over 15 years of Non-Executive Director experience and was
formerly a Non-Executive Director of Macquarie Goodman Industrial Trust,
Metcash Limited, Fairfax Media, Woolworths South Africa, David Jones, Country
Road Group and Nine Entertainment Co. Mr Allaway chaired the Audit & Risk
Committees for Metcash, David Jones and Country Road Group.
Mr Allaway is currently a Non-Executive Director of Allianz Australia (leave
of absence) and Dexus Funds Management Limited (leave of absence) and a member
of the Adobe International Advisory Board.
Warwick Negus Mr Negus was appointed a Director of BOQ on 22 September 2016 and as its
Chairman on 27 March 2023.
B Bus, M Com, SF Fin
Mr Negus brings more than 30 years of finance industry experience in Asia,
Chairman Europe and Australia. His most recent executive roles include Chief
Executive Officer of 452 Capital, Chief Executive Officer of Colonial First
State Global Asset Management and Goldman Sachs Managing Director in
Australia, London, and Singapore. He was also a Vice President of Bankers
Trust Australia and a Director of the University of NSW (UNSW) Foundation and
FINSIA.
Mr Negus is Chair of Dexus Funds Management Limited and a Non-Executive
Director of Virgin Australia Holdings Pty Ltd and Terrace Tower Group. He is a
member of the Council of UNSW.
Mr Negus is Chair of the Nomination & Governance and Investment Committees
and a member of People, Culture & Remuneration, Audit, Risk and
Transformation & Technology Committees.
Bruce Carter Mr Carter was appointed a Director of BOQ on 27 February 2014.
B Econ, MBA, FAICD, FICA Mr Carter was a founding Managing Partner of Ferrier Hodgson South Australia,
a corporate advisory and restructuring business and has worked across a number
Non-Executive Independent Director of industries and sectors in the public and private sectors. He has been
involved with a number of state government-appointed restructures and reviews,
including chairing a task force to oversee the government's involvement in
major resource and mining infrastructure projects. Mr Carter had a central
role in a number of key government economic papers, including the Economic
Statement on South Australian Prospects for Growth, the Sustainable Budget
Commission and the Prime Minister's 2012 GST Distribution Review.
Mr Carter has worked with all the major financial institutions in Australia.
Before Ferrier Hodgson, Mr Carter was at Ernst & Young for 14 years,
including four years as Partner in Adelaide. During his time at Ernst &
Young, he worked across the London, Hong Kong, Toronto and New York offices.
Mr Carter is currently Chair of AIG Australia Limited, Australian Submarine
Corporation and Sage Group Holdings Limited and a Non-Executive Director of
Lovisa Holdings Limited. He formerly chaired the Boards of Aventus Capital
Limited and One Rail Australia and was a Non-Executive Director of Crown
Resorts Limited and SkyCity Entertainment Group Limited.
Mr Carter is Chair of the Risk Committee and a member of the Audit,
Transformation & Technology, Investment, People, Culture &
Remuneration and Nomination & Governance Committees.
Karen Penrose Ms Penrose was appointed a Director of BOQ on 26 November 2015.
B.Comm, CPA, FAICD Ms Penrose is an experienced non-executive director and banker. As a banker,
Ms Penrose has 20 years of experience leading businesses within Commonwealth
Non-Executive Independent Director Bank of Australia and HSBC and over ten years in accounting and finance roles.
Ms Penrose has particular expertise in the financial services, health,
property, resources and energy sectors. Ms Penrose is a Non-Executive Director
of Cochlear Limited, Ramsay Health Care Limited and Estia Health Limited.
She is also a Director of Ramsay Générale de Santé and Rugby Australia
Limited. Ms Penrose was formerly a Non-Executive Director of Vicinity Centres
Limited, AWE Limited, Spark Infrastructure Group, Landcom and Future
Generation Global Investment Company Limited. She is a member of Chief
Executive Women.
Ms Penrose is Chair of the Audit Committee and is a member of the People,
Culture & Remuneration, Risk, Transformation & Technology, Investment
and Nomination & Governance Committees.
Mickie Rosen Ms Rosen was appointed a Director of BOQ on 4 March 2021.
BA, Economics, MBA Ms Rosen has three decades of strategy, operating, advisory and board
experience across media, technology and e-commerce. She has built and led
Non-Executive Independent Director global businesses for iconic brands such as Yahoo, Fox and Disney, as well as
early-stage companies including Hulu and Fandango.
Ms Rosen is also a Non-Executive Director of Nine Entertainment Co and of
Ascendant Digital Acquisition Company and FaZe Clan in the United States.
Prior, Ms Rosen served on the board of Pandora Media and was the President of
Tribune Interactive, the digital arm of Tribune Publishing and was
concurrently the President of the Los Angeles Times. Ms Rosen commenced her
career with McKinsey & Company, is based on the West Coast of the United
States and holds an MBA from Harvard Business School.
Ms Rosen currently chairs the Transformation & Technology Committee and is
a member of the Risk, People, Culture & Remuneration, Audit and Nomination
& Governance Committees.
Deborah Kiers Ms Kiers was appointed as a Non-Executive Director of BOQ in August 2021.
B.Sc(Hons), MPA, MAICD Ms Kiers previously acted as a Director of ME Bank since July 2020 and acted
as Chair of the ME Bank Board's People and Culture sub-committee and as a
Non-Executive Independent Director member of the Risk and Compliance Committee.
Ms Kiers brings over 30 years of corporate advisory and consulting experience
to boards, CEOs and executive management teams across a range of industries
including Financial Services, Energy and Resources, Industrials, Property,
Infrastructure and Regulated Utilities, both in Australia and internationally.
As Managing Director of JMW Consultants (Asia Pacific), Ms Kiers' corporate
support included strategic advice, transformation initiatives, M&A
integration, leadership transition and development and building synergies
between purpose, strategy, culture and performance.
Ms Kiers is currently a Non-Executive Director for IFM Investors and holds the
position of Chair of the Responsible Investment and Sustainability Committee
and is a member of the Board Audit and Risk Committee. Ms Kiers is also Chair
of Tiverton Agriculture Impact Fund and Non-Executive Director of Downforce
Technologies Limited.
Ms Kiers is Chair of the People, Culture and Remuneration Committee and a
member of the Audit, Risk, Nomination & Governance, and Transformation
& Technology Committees.
Dr Jenny Fagg Dr Fagg was appointed a Director of BOQ on 13 October 2021.
PhD B Econ Dr Fagg brings to the Board more than 25 years executive experience across
leading financial services institutions in Australia and abroad. Currently, Dr
Non-Executive Independent Director Fagg is the CEO of 2Be Finance. Previously, Dr Fagg served as Chief Risk
Officer for AMP Limited driving a critical transformation agenda for risk
culture and systems following the Hayne Royal Commission. Dr Fagg is
recognised for her turnaround credentials fostered during her time at CIBC
(Canada), as CEO of ANZ National Bank (New Zealand) and as Managing Director
of ANZ Consumer Finance. Dr Fagg has a PhD in Management (Risk) from
University of Sydney and a Bachelor of Economics (Honours in Psychology) from
the University of Queensland.
Dr Fagg is a member of BOQ's Transformation & Technology, Risk, People,
Culture & Remuneration, Audit and Nomination & Governance Committees.
Company Secretary
Fiona Daly, General Counsel and Company Secretary
LLB, LLM, AGIA, ACIS, MAICD
Ms Daly joined BOQ in October 2018 and was appointed joint company secretary
on 30 April 2019 and General Counsel & Company Secretary on 4 February
2023. Ms Daly commenced her career as a corporate lawyer at Phillips Fox (now
DLA Piper) before joining Allens. Prior to working for BOQ, Ms Daly held
senior legal and regulatory roles including as senior legal counsel, global
regulatory affairs manager and joint company secretary at Energy Developments,
an international energy company.
Organisational Structure
BOQ's controlled entities are set out in Note 5.5 to the 2022 consolidated
financial statements, which are incorporated by reference and form part of
this Prospectus.
Shareholding Details
As at 19 April 2023 the following shareholding details applied:
Eight largest ordinary shareholders:
Shareholder No. of ordinary shares %
1 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 93,169,688 14.28
2 J P MORGAN NOMINEES AUSTRALIA PTY LIMITED 55,641,992 8.53
3 CITICORP NOMINEES PTY LIMITED 31,305,919 4.80
4 NATIONAL NOMINEES LIMITED 23,277,042 3.57
5 BNP PARIBAS NOMS PTY LTD 9,741,723 1.49
6 GOLDEN LINEAGE PTY LTD 3,258,631 0.50
7 PACIFIC CUSTODIANS PTY LIMITED 3,014,984 0.46
8 CITICORP NOMINEES PTY LIMITED 2,232,363 0.34
Total 221,642,342 33.97
The BOQ Covered Bond Trust
The Trust
The BOQ Covered Bond Trust (Trust) is a special purpose trust established by
the Establishment Deed dated 24 April 2017, under the laws applying in the
State of New South Wales. Perpetual Corporate Trust Limited is the trustee
of the Trust.
The Covered Bond Guarantor's principal office is at Level 18, 123 Pitt Street,
Sydney NSW 2000, Australia. The telephone number of the Covered Bond
Guarantor's principal office is +61 2 9229 9000.
The Covered Bond Guarantor is dependent on the Trust Manager and the Servicer
(among others) to provide certain management and administrative services to
it, on the terms of the Establishment Deed and the other Programme Documents.
The Trust was established for purposes relating only to the Covered Bonds,
including (without limitation):
(a) the acquisition, management and sale of, amongst other
things, Mortgage Loan Rights;
(b) the borrowing of moneys to fund the acquisition of such
assets;
(c) the hedging of risks associated with such assets and such
funding;
(d) the acquisition, management and sale of Substitution Assets
and Authorised Investments;
(e) the giving of guarantees;
(f) the granting of security; and
(g) any purpose which is ancillary or incidental to any of the
purposes set out in paragraphs (a) to (f) above.
The Trust has not engaged since its establishment, and will not engage whilst
the Covered Bonds, any Intercompany Notes or the Demand Note remain
outstanding, in any material activities other than activities incidental to
the purposes for which it was established, activities contemplated under the
Programme Documents to which it is or will be a party and other matters which
are incidental or ancillary to the foregoing.
The beneficial interest in the Trust will be represented by:
· ten Capital Units; and
· one Income Unit.
The initial holder of the ten Capital Units will be BOQ.
The initial holder of the one Income Unit will be BOQ.
Perpetual Corporate Trust Limited
Perpetual Corporate Trust Limited was appointed trustee of the Trust on 24
April 2017 pursuant to the Establishment Deed establishing the Trust.
Perpetual Corporate Trust Limited was incorporated in New South Wales on 27
October 1960 as T.E.A. Nominees (N.S.W.) Ltd under the Companies Act, 1936 of
New South Wales. The name was changed to Perpetual Corporate Trust Limited on
18 October 2006 and Perpetual Corporate Trust Limited now operates as a
limited liability public company under the Corporations Act. Perpetual
Corporate Trust Limited is registered in New South Wales and its registered
office is at Level 18, 123 Pitt Street, Sydney, Australia.
Perpetual Corporate Trust Limited is a wholly owned subsidiary of Perpetual
Limited, a publicly listed company on the Australian Securities Exchange.
The principal activities of Perpetual Corporate Trust Limited are the
provision of trustee and other commercial services. Perpetual Corporate Trust
Limited has obtained an Australian Financial Services Licence under Part 7.6
of the Corporations Act (AFSL No. 392673). Perpetual Corporate Trust Limited
and its related companies provide a range of services including custodial and
administrative arrangements to the funds management, superannuation, property,
infrastructure and capital markets. Perpetual Corporate Trust Limited and its
related companies are leading trustee companies in Australia with in excess of
A$500 billion under administration.
The name and function of each of the Directors of Perpetual Corporate Trust
Limited are listed below. Unless otherwise stated, the business address of
each Director is Level 18, 123 Pitt Street Sydney NSW 2000 Australia.
· Mark Smith, Director;
· Christopher Green, Director; and
· Richard McCarthy, Director.
As at the date of this Prospectus, there are no existing or potential conflicts of interest between any duties owed to Perpetual Corporate Trust Limited by its Directors and the private interests or external duties of those Directors. As a subsidiary of Perpetual Limited, perceived and actual conflicts of interest for Perpetual Corporate Trust Limited and its Directors are assessed and managed in accordance with the Perpetual Limited Conflicts Management Framework.
Covered Bond Guarantor's Liability
The Covered Bond Guarantor enters into the Programme Documents only in its
capacity as trustee of the Trust and in no other capacity. A liability arising
under or in connection with the Programme Documents is limited to and can be
enforced against the Covered Bond Guarantor only to the extent to which it can
be satisfied out of Assets of the Trust out of which the Covered Bond
Guarantor is actually indemnified for the liability. Subject to the paragraphs
below, this limitation of the Covered Bond Guarantor's liability applies
despite any other provision of the Programme Documents and extends to all
liabilities and obligations of the Covered Bond Guarantor in any way connected
with any representation, warranty, conduct, omission, agreement or transaction
related to a Programme Document.
In relation to the Trust, no party to the Programme Documents other than the
Covered Bond Guarantor may sue the Covered Bond Guarantor in any capacity
other than as trustee of the Trust, including seeking the appointment of a
receiver (except in relation to the Assets of the Trust), or a liquidator, an
administrator or any similar person to the Covered Bond Guarantor or prove in
any liquidation, administration or arrangements of or affecting the Covered
Bond Guarantor (except in relation to the Assets of the Trust).
The above will not apply to any obligation or liability of the Covered Bond
Guarantor to the extent that it is not satisfied because under the Programme
Documents or by operation of law there is a reduction in the extent of the
Covered Bond Guarantor's indemnification out of the Assets of the Trust, as a
result of the Covered Bond Guarantor's fraud, negligence or wilful default.
It is acknowledged that the Transaction Parties are each responsible under the
Programme Documents for performing a variety of obligations relating to the
Trust. No act or omission of the Covered Bond Guarantor (including any related
failure to satisfy its obligations or breach of representation or warranty
under any Programme Document) will be considered fraud, negligence or wilful
default of the Covered Bond Guarantor to the extent to which the act or
omission was caused or contributed to by any failure by any Transaction Party
(other than the Covered Bond Guarantor) or any other person to fulfil its
obligations relating to the Trust or by any other act or omission of any
Transaction Party (other than the Covered Bond Guarantor) or any other person.
No attorney, agent, receiver or receiver and manager appointed in accordance
with the Programme Documents has authority to act on behalf of the Covered
Bond Guarantor in a way which exposes the Covered Bond Guarantor to any
personal liability and no act or omission of any such person will be
considered fraud, negligence or wilful default of the Covered Bond Guarantor.
The Covered Bond Guarantor is not obliged to do or refrain from doing anything
under the Programme Documents (including incur any liability) unless the
Covered Bond Guarantor's liability is limited in the same manner as set out in
this section.
Security Trustee's Liability
Notwithstanding any other provision of the Programme Documents, the Security
Trustee enters into the Programme Documents only in its capacity as trustee of
the Security Trust and in no other capacity and the Security Trustee has no
liability under or in connection with the Programme Documents (whether to the
Secured Creditors, the Covered Bond Guarantor or any other person) other than
to the extent to which the liability is able to be satisfied out of the
property of the Security Trust from which the Security Trustee is actually
indemnified for the liability. This limitation will not apply to a liability
of the Security Trustee to the extent that it is not satisfied because, under
the Programme Documents or by operation of law, there is a reduction in the
extent of the Security Trustee's indemnification out of the Security Trust as
a result of the Security Trustee's fraud, negligence or wilful default.
Fraud, Negligence and Wilful Default of the Covered Bond Guarantor or the
Security Trustee
A reference to the "fraud", "negligence" or "wilful default" of the Covered
Bond Guarantor or the Security Trustee means the fraud, negligence or wilful
default of the Covered Bond Guarantor or the Security Trustee, as the case may
be, and of its officers, employees, agents and any other person where the
Covered Bond Guarantor or the Security Trustee, as the case may be, is liable
for the acts or omissions of such other person under the terms of the relevant
Programme Document.
A reference to "wilful default" in relation to the Covered Bond Guarantor or
the Security Trustee means any intentional failure to comply, or intentional
breach, by the defaulting party of any of its obligations under the Programme
Documents, other than a failure or breach which:
· is in accordance with a lawful court order or direction
or otherwise required by law; or
· is in accordance with a proper instruction or direction
from any person (other than the defaulting party) permitted to give such
instruction or direction to the defaulting party under the Programme
Documents; or
· arose as a result of a breach by any person (other than
the defaulting party) of any of its obligations under the Programme Documents
and performance of the action (or non-performance of which gave rise to such
breach) is a precondition to the defaulting party performing its obligations
under the Programme Documents.
Bank of Queensland Limited Residential Mortgage Loan Origination, Mortgage
Loan Features, Servicing and Enforcement
The Mortgage Loans assigned to the Covered Bond Guarantor pursuant to the
Mortgage Sale Agreement will consist of Mortgage Loans originated by the
Seller. The origination process, types of Mortgage Loans, and their servicing
and enforcement, are summarised below. However, the origination guidelines and
types of Mortgage Loans may change in the future. See also the sections
"Risk Factors - Risk Factors related to the Covered Bond Guarantor - The
Seller's credit and origination policies may be revised from time to time,
which may affect the ability of the Covered Bond Guarantor to make payments
under the Covered Bond Guarantee" and "Risk Factors - Risk Factors related to
the Covered Bond Guarantor - Covered Bondholders receive a limited description
of the Mortgage Loan Rights" in this Prospectus.
Origination Process
The Mortgage Loans to be assigned to the Covered Bond Guarantor by the Seller
comprise a portfolio of variable and fixed rate mortgage loans which were
originated by the Seller through loan applications from new and existing
customers. All of the Seller's mortgage loan applications are sourced from the
Seller's branch network, approved and accredited mortgage brokers, approved
referral sources and business banking relationship managers.
Approval and Underwriting Process
When a mortgage loan application is received, it is processed in accordance
with the Seller's approval policies. These policies are monitored and are
subject to continuous review by the Seller. In certain situations, discounted
interest rates are provided to retain existing borrowers or to attract certain
customer segments. All borrowers must satisfy the appropriate approval
criteria of the Seller described in this section.
Authorised roles within the Seller are provided with the authority and
accountability designed to assist customers with the lending application and
process. Staff occupying these roles are trained to have the necessary skills
and knowledge designed to meet the full financial needs of customers with
particular regard to lending products, sales and services, risk management and
associated issues. Authorised roles include, but are not limited to, lending
managers.
Applications scored as 'refer' and those that are not credit scored
(incorporated entities/trusts) are assessed by an appropriately authorised
staff member in a credit decisioning team. The Retail Credit Risk Department
is a centralised function which is independent from the origination of
mortgage loans and the Senior Manager Retail Risk Assessment report to the
Chief Credit Officer.
There are two separate Retail Credit Assessment Teams each managed by a Senior
Manager as below:
(a) Complex Self-employed Team: decisions and validates the
income of self-employed transactions involving non individual entities
(Companies and Trusts). This team is within the Risk function and reports
directly to the Chief Credit Officer.
(b) Retail Credit Decisioning Team: decisions PAYG and simple
self-employed (sole traders and partnerships) transactions. This team
reports directly into the General Manager Home Ownership under the Operations
function.
Credit Risk Assessment Managers must be assessed prior to a delegated credit
approval authority being approved. The credit risk assessment manager's
performance and approval authority is regularly monitored and reviewed by the
Seller. This is intended to ensure that mortgage loans are approved by a
credit risk assessment manager with the proper authority level and that the
quality of the underwriting process by each individual lending officer is
maintained.
Mortgage loans processed by the Seller may be either approved outright by
being "auto-decisioned" by a credit scorecard system or, in certain
circumstances, "auto-decisioned" and then referred for approval to a credit
risk assessment manager or referred from the outset for approval to a credit
risk assessment manager holding a delegated credit approval authority. A
mortgage loan will be approved or declined by a credit risk assessment manager
holding the appropriate level of delegation and mortgage loans which have
higher risk characteristics or do not meet the Seller's normal lending
criteria are assessed by a credit risk assessment manager with higher
delegation.
There are different tiers of credit approval authority levels between
individual Risk Managers and across the two Risk Teams.
Verification of application details
The verification process involves borrowers providing proof of identity,
evidence of income and evidence of savings (where applicable). For an employed
applicant, it includes confirming employment and income levels using evidence
such as payslips, salary credits to transaction accounts or employer written
confirmation. For a self-employed person or an incorporated entity as an
applicant, the Seller obtains annual financial statements and tax assessments.
Where applicants are refinancing debts from another financial institution, a
check of recent statements of the existing mortgage loan(s) is made to
determine the regularity of debt payments. The credit history of any existing
borrowings from the Seller is also checked.
Assessing ability to repay
Based upon the application, once verified, an assessment is made of the
applicant's ability to repay the mortgage loan. This is primarily based on the
net servicing position along with any risk factors identified in verifying the
applicant's income, savings or credit history. The credit decision is made
using one of the following processes.
(a) Credit scorecard: In the majority of cases, a credit
scorecard system automatically and consistently applies the Seller's credit
assessment rules without relying on the credit experience of the inputting
officer. The credit scorecard returns a decision to approve, refer or decline
an application. An application is referred by the system if certain risk
factors, such as loan size or a negative net servicing position, are present
which require the application to be assessed by an experienced credit risk
assessment manager. The credit score determined by this system is based on
historical performance data of the Seller's mortgage loan portfolio and bureau
information.
In addition, in certain circumstances, such as to comply with the Seller's
internal approval policies, an application approved by the credit scorecard
system can also be referred for approval to a credit risk assessment manager.
(b) Credit approval authorities: Mortgage loan applications
which are not credit scored, which are referred by the credit scorecard system
or which have been approved by the credit scorecard system but identified for
referral, are assessed by a credit risk assessment manager. Credit risk
assessment managers are allocated delegated approval authorities based on
their role, level of experience and past performance. Mortgage loans which
have certain risk characteristics, such as loan size or a negative net
servicing position, are assessed by more experienced credit risk assessment
managers. The Seller monitors the quality of lending decisions and conducts
regular hindsight reviews of approvals.
In addition to the processes described above, all mortgage loan applications
are also subject to a credit history search of the applicant's credit file
which is provided by Equifax (formerly known as Veda Advantage Ltd and
previously as Baycorp Advantage Ltd).
Borrowers in respect of mortgage loans may be natural persons, corporations or
trusts. Mortgage loans to corporations and trusts may be secured, if deemed
necessary, by guarantees from directors. Guarantees may also be obtained in
other circumstances.
Valuation of mortgaged property
For applications which are approved during the credit decision process, the
maximum allowable loan-to-value ratio, being the ratio of the mortgage loan
amount to the value of the mortgaged property, is calculated and an offer for
finance is made conditional upon a satisfactory valuation of the mortgaged
property and any other outstanding conditions being satisfied. The amount of
the mortgage loan that will be approved for a successful applicant is based on
an assessment of the applicant's ability to service the proposed mortgage loan
and the loan-to-value ratio.
For the purposes of calculating the loan-to-value ratio, the value of a
mortgaged property is determined at origination by (i) a full valuation
undertaken by a registered valuer approved by the Seller (who is an accredited
panel valuer); (ii) reference to an acceptable source document such as a
contract for the purchase of the mortgaged property; (iii) an automated
valuation model (AVM) to support contract purchase price or to confirm
property value for a variation request; (iv) a Desktop valuation (undertaken
by an accredited panel valuer) in certain circumstances or; (v) in rare
circumstances a "long form" can be utilised for scenarios where an
"in-one-line" valuation is required. The risk criteria includes limits on the
mortgage loan amount and the value and geographical location of the security
property.
The maximum loan-to-value ratio that is permitted for any mortgage loan is
determined according to the Seller's credit policy and is dependent on the
size of the proposed mortgage loan, the nature and location of the proposed
mortgaged property and other relevant factors. Where more than one mortgaged
property is offered as security for a mortgage loan, the sum of the valuations
for each mortgaged property is assessed against the mortgage loan amount
sought and any existing mortgage loans.
The Seller's formal mortgage loan offer with the mortgage loan security
documentation is printed at the point of sale by the mortgage loan
originator. After acceptance and execution, the documentation, together with
a signed acknowledgement that all non-documentary conditions of approval have
been met, is returned by the business unit to the lending services team
authorising settlement and funding of the mortgage loan can proceed.
One of the conditions of settlement is that the borrower establish and
maintain full replacement general home owner's insurance on the mortgaged
property. However, there is no ongoing monitoring of the level of home
owner's insurance maintained by borrowers.
The Seller's Product Types
Set out below is a summary of the Seller's mortgage loan product types. The
products described below apply to both owner occupied and investment mortgage
loans.
The Seller offers a variety of mortgage loan product types with various
features and options that are summarised in this section. Market competition
and economics may require that the Seller offer new product types or add
features to a mortgage loan which are not described in this section.
Home loan products available for sale:
The following loan products are available for new lending:
Clear Path Home Loan (BOQ), Reward Me Variable Rate Home Loan (VMA)
These are the primary variable rate loans for each brand. The variable rate
product is not linked to any other variable rates in the market. However, the
rate may fluctuate with market conditions. This product provides maximum
flexibility with repayment and redraw options as well as the full range of
mortgage loan features including mortgage offset. Borrowers may switch to
another product offered by the brand, including a fixed interest rate, at any
time.
Economy Home Loan (BOQ)
This is a low cost "no frills" mortgage loan for those borrowers looking for
the flexibility of a variable rate mortgage loan without the extra features.
Mortgage offset is not available.
Fixed Rate Home Loan (BOQ), Reward Me Fixed Rate Home Loan (VMA)
These are the fixed rate loan products offered by each brand. Fixed rate
mortgage loan terms can range from two to five years (BOQ) or two to five
years (VMA); providing certainty in terms of interest rates and repayments.
For BOQ, these mortgage loans convert to the Clear Path Home Loan at the end
of the agreed fixed rate period unless the borrower elects to fix the interest
rate for a further period. For VMA the loans will convert to the Reward Me
Variable Rate Home Loan.
Home loan products no longer available for sale:
The following loan products are not available for new lending but existing
loans may be included in the cover pool:
Intro Rate Home Loan (BOQ)
This product provides a discounted rate of interest for the first two years
and then switches to the Clear Path Home loan. The discount applied to the
first two years and any subsequent ongoing discount may change from time to
time dependent on market conditions. This product provides maximum flexibility
with repayment and redraw options as well as the full range of mortgage loan
features including mortgage offset.
Standard Variable Rate Home Loan (BOQ)
These types of mortgage loans are the traditional standard variable mortgage
product. The standard variable rate product is not linked to any other
variable rates in the market. However, it may fluctuate with market
conditions. Borrowers may switch to a fixed interest rate at any time. Some of
the mortgage loans will be subject to fixed rates for differing periods.
Home Loan Privileges Package (HLPP) (BOQ)
This is a complete home loan and banking package with benefits and savings
that last for the full term of the mortgage loan. Customers have the option of
taking either a variable rate or fixed rate option, with discounted interest
rate benefits applying to the variable option. The discount is tiered
according to the customer's total borrowings with the eligibility restricted
to borrowers with total borrowings greater than A$150,000. In all other
aspects, the mortgage loan products operate exactly the same as the standard
products including with respect to repayment options. In all cases, fee
savings apply to their mortgage loans, transaction accounts and credit cards.
Special Features of the Mortgage Loans
Each Mortgage Loan may have some or all of the features described in this
section. In addition, during the term of any Mortgage Loan, the Servicer may
agree to change any of the terms of that Mortgage Loan from time to time at
the request of the Borrower.
Discounts
The Seller may offer customers either at origination of the mortgage loan or
at any time after being established an interest rate that is discounted by a
fixed percentage to the product's reference rate. This discount may be
advertised and broadly available or not advertised and offered only to select
customers. Discounts are subject to the borrower and loan meeting certain
criteria that may include loan size, credit risk profile, or customer value.
Substitution of Security
A borrower may apply to the Servicer to achieve the following:
(a) substitute a different mortgaged property in place of the
existing mortgaged property securing a mortgage loan; or
(b) release a mortgaged property from a mortgage.
If the Servicer's credit criteria are satisfied and another property is
substituted for the existing security for the mortgage loan, the mortgage
which secures the existing mortgage loan may be discharged without the
borrower being required to repay the mortgage loan. The Servicer must obtain
the consent of any relevant mortgage insurer to the substitution of security
or a release of a mortgage where this is required by the terms of a mortgage
insurance policy. See the section "Overview of the Principal Documents -
Servicing Deed" in this Prospectus.
Redraws and Further Advances
Borrowers can elect to redraw prepaid principal on their mortgage loans which
are variable rate loans. The redraw facility is subject to approval by the
Seller and the outstanding principal balance of the mortgage loan after the
redraw must not exceed the scheduled balance of that mortgage loan. Redraws
can occur in either of the following ways:
(a) electronically via internet banking, where the amount
available for redraw is controlled by the banking system (i.e. redraw is not
permitted if the funds are not available); or
(b) manually - all these redraws are centrally administered and
approved.
Any redraws made by a Borrower in respect of a Mortgage Loan will be a Further
Advance for the purposes of the Trust. See the section "Overview of the
Principal Documents - Mortgage Sale Agreement - Further Advances" in this
Prospectus.
Repayment Holiday
A borrower is allowed a repayment holiday where the borrower has taken a
principal and interest loan and has prepaid principal, creating a difference
between the outstanding principal balance of the loan and the scheduled
amortised principal balance of the mortgage loan. The borrower is not required
to make any payments, including payments of interest, until the outstanding
principal balance of the mortgage loan plus unpaid interest equals the
scheduled amortised principal balance. The failure by the borrower to make
payments during a repayment holiday will not cause the related mortgage loan
to be considered delinquent. This feature is generally only offered as part of
a hardship payment deferral and assessed on a case by case basis.
Early Repayment
A borrower may incur break fees if an early repayment or partial prepayment of
principal occurs on a fixed rate mortgage loan. However, at present fixed rate
mortgage loans allow for partial prepayment by the borrower of up to A$10,000
(BOQ and VMA) in any 12 month period without any break fees being applicable.
Combination or "Split" Mortgage Loans
A borrower may elect to split a mortgage loan into separate funding portions
which may, among other things, be subject to different types of interest
rates. Each part of the mortgage loan is effectively a separate mortgage loan
contract, even though all the separate mortgage loans are secured by the same
mortgage.
Interest Offset
The Seller offers borrowers certain interest offset products under which the
interest accrued on the borrower's transaction account is offset against
interest on the borrower's mortgage loan. The Seller does not actually pay
interest to the borrower on the mortgage loan offset account, but simply
reduces the amount of interest which is payable by the borrower under its
mortgage loan. The borrower continues to make their scheduled mortgage
payments with the result that the portion allocated to principal is increased
by the amount of interest offset. For transaction accounts, the interest
offset is only available for certain types of mortgage loans.
If, following a Perfection of Title Event, the Covered Bond Guarantor obtains
legal title to a Mortgage Loan, the Seller will no longer be able to offer an
interest offset arrangement for that Mortgage Loan.
Interest Only Periods
A borrower may also request to make payments of interest only on his or her
mortgage loan. If the Servicer agrees to such a request in respect of a
mortgage loan it does so conditional upon higher principal repayments or a
bulk reduction of principal applying upon expiry of the interest only period
so that the mortgage loan is repaid within its original term. The interest
only period can be extended beyond the initial period provided the total
interest only period for the life of the mortgage loan does not exceed 5 years
(for owner occupier loans), and does not exceed 10 years (for investment
loans).
Additional Features
The Seller and Servicer, as applicable, may from time to time offer additional
features in relation to a Mortgage Loan which are not described in the
preceding section or may cease to offer features that have been previously
offered and may add, remove or vary any fees or other conditions applicable to
such features.
Collection and Enforcement Procedures
Pursuant to the terms of the mortgage loans, borrowers must make the minimum
repayment due under the terms and conditions of the mortgage loans, on or
before each monthly instalment due date. A borrower may elect to make his or
her repayments weekly or fortnightly so long as the equivalent of the minimum
monthly repayment is received on or before the monthly instalment due date.
Borrowers often select repayment dates to coincide with receipt of their
salary or other income. In addition to payment to a branch by cash or cheque,
mortgage loan repayments may be made by direct debit to a nominated bank
account or direct credit from the borrower's salary by their employer.
A mortgage loan is generally subject to action in relation to arrears of
payment whenever the monthly repayment is not paid by the monthly instalment
due date. However, under the terms of the mortgage loans, borrowers may prepay
amounts which are additional to their required monthly repayments. If a
borrower subsequently fails to make some or all of a required monthly
repayment, the servicing system will draw against any additional payments
until the available funds have been utilised. The Servicer's collections
system identifies all mortgage loan accounts which are in arrears and produces
lists of those mortgage loans. The collection system allocates overdue loans
to the Servicer's designated collection officers who take action in relation
to the arrears.
Actions taken by the Servicer in relation to delinquent accounts will vary
depending on a number of elements, including the following and, if applicable,
with the input of a mortgage insurer:
(a) arrears history;
(b) equity in the property;
(c) arrangements made with the borrower to meet overdue
payments; and
(d) whether any complaint has been raised by the borrower.
BOQ adopts the approach of identifying both vulnerable and at risk customers
to ensure that customers who are experiencing a higher level of financial
difficulty outside of their control are appropriately managed. There is also
further follow up and a larger focus on educating customers around what has
occurred, what needs to occur and what may occur should positive action not
take place on the account.
If satisfactory arrangements cannot be made to rectify a delinquent mortgage
loan, legal notices are generally issued and recovery action is initiated by
the Servicer. This includes, if the Servicer obtains possession of the
mortgaged property, ensuring that the mortgaged property supporting the
mortgage loan still has adequate general home owner's insurance and that the
upkeep of the mortgaged property is maintained. Recovery action is arranged by
experienced collections and recoveries staff in conjunction with internal or
external legal advisers. A number of sources of recovery are pursued including
the following:
(i) voluntary sale by the mortgagor;
(ii) guarantees;
(iii) mortgagee sale;
(iv) claims on mortgage insurance; and
(v) action against the mortgagor/borrower personally.
The Servicer reports all actions that it takes on overdue mortgage loans to
the relevant mortgage insurer where required in accordance with the terms of
the mortgage insurance policies.
Collection and Enforcement Process
When a mortgage loan becomes delinquent a combination of contact methods will
be used to follow up with the borrower seeking full and immediate clearance of
all arrears. The type of contact methods may include SMS, reminder letters,
emails, field calls and phone calls. The timing of the follow up contact
depends on the risk profile of the account, but generally collections activity
commences at day four in arrears.
BOQ adopts the approach of identifying both vulnerable and at risk customers
to ensure that customers who are experiencing a higher level of financial
difficulty outside of their control are appropriately managed. There is also
further follow up and a larger focus on educating customers around what has
occurred, what needs to occur and what may occur should positive action not
take place on the account.
If an arrangement has not been entered into to rectify the arrears, a Default
Notice is issued advising the borrower that if the default is not rectified
within a period of 31 days (allow an additional seven business days for
postage), whole of the balance amount owed will become immediately due and
payable and BOQ is entitled to commence enforcement proceedings without
further notice. Generally, a Default Notice will be sent when the loan is the
equivalent of two payments past due. Upon the expiry of the Default Notice,
and if a payment arrangement has not been entered into and attempts to contact
(including a field call), the file is reviewed for the issuance of a Statement
of Claim for possession of the property in the relevant Australian court.
Once a borrower is served with a Statement of Claim, the borrower is generally
given up to 28 days to file a defence to the Statement of Claim (subject to
the relevant jurisdiction). Should a defence to the Statement of Claim not
be filed the Servicer will then, apply to the court to have judgment entered
in its favour for the outstanding debt and possession of the security. The
Servicer will then apply to the court for a 'Warrant of Possession' whereby
the court approves for the Servicer to take possession of the security. The
Servicer awaits the eviction date to be set by the Sheriff and engages a
property presenter to assist with obtaining possession of the security.
Appraisals and valuations are ordered and a reserve price is set for sale by
way of public auction, tender or private treaty. These time frames assume that
the borrower has either taken no action or has not honoured any commitments
made in relation to the delinquency to the satisfaction of the Servicer and
the mortgage insurers.
It should also be noted that the Servicer's ability to exercise its power of
sale on the mortgaged property is dependent upon the statutory restrictions of
the relevant state or territory and the National Credit Code (if applicable)
as to notice requirements. In addition, there may be factors outside the
control of the mortgagee such as whether the mortgagor contests the sale and
the market conditions at the time of sale. These issues may affect the length
of time between the decision of the Servicer to exercise its power of sale and
final completion of the sale. See also the section "Risk Factors - Risk
Factors related to the Covered Bond Guarantor - Enforcement of Mortgage Loans
can involve substantial costs and delays and may not permit full recovery by
the Servicer" in this Prospectus.
The collection and enforcement procedures may change from time to time in
accordance with business judgment and changes to legislation and guidelines
established by the relevant regulatory bodies.
Overview of the Principal Documents
Bond Trust Deed
The Bond Trust Deed entered into between the Issuer, the Trust Manager, the
Covered Bond Guarantor and the Bond Trustee on or about the Programme Date, is
the principal agreement governing the Covered Bonds. The Bond Trust Deed
contains provisions relating to:
(a) the constitution of the Covered Bonds and the terms and
conditions of the Covered Bonds (as more fully set out under "Terms and
Conditions of the Covered Bonds" below);
(b) the covenants of the Issuer and the Covered Bond Guarantor;
(c) the terms of the Covered Bond Guarantee (as described
below);
(d) the enforcement procedures relating to the Covered Bonds and
the Covered Bond Guarantee; and
(e) the appointment, powers and responsibilities of the Bond
Trustee and the circumstances in which the Bond Trustee may resign or retire
or be removed.
The Covered Bond Guarantee
The Covered Bond Guarantor has guaranteed to the Bond Trustee, for the benefit
of Covered Bondholders, the prompt performance by the Issuer of its
obligations to pay Guaranteed Amounts.
Following the occurrence of an Issuer Event of Default and the service by the
Bond Trustee of an Issuer Acceleration Notice on the Issuer (copied to the
Covered Bond Guarantor) and a Notice to Pay on the Covered Bond Guarantor
(copied to the Trust Manager and the Security Trustee), the Covered Bond
Guarantor must, as principal obligor, pay or procure to be paid on each
Scheduled Payment Date (or on such later date provided for in the Bond Trust
Deed) irrevocably and unconditionally to or to the order of the Bond Trustee
(for the benefit of the Covered Bondholders), an amount equal to those
Guaranteed Amounts which have become Due for Payment in accordance with the
terms of the Bond Trust Deed (or which would have become Due for Payment but
for any variation, release or discharge of the Guaranteed Amounts), but which
have not been paid by the Issuer to the relevant Covered Bondholder and/or
Couponholders on the relevant date for payment provided that no Notice to Pay
will be so served on the Covered Bond Guarantor until an Issuer Acceleration
Notice has been served by the Bond Trustee on the Issuer.
Following the occurrence of a Covered Bond Guarantor Event of Default and the
service by the Bond Trustee of a Covered Bond Guarantee Acceleration Notice on
the Issuer and the Covered Bond Guarantor (copied to the Trust Manager and the
Security Trustee), in respect of the Covered Bonds of each Series which have
become immediately due and repayable (or which would have become Due for
Payment but for any variation, release or discharge of the Guaranteed
Amounts), the Covered Bond Guarantor must, as principal obligor, pay or
procure to be paid to or to the order of the Bond Trustee (for the benefit of
itself and the Covered Bondholders), in the manner described in the Bond Trust
Deed, the Guaranteed Amounts.
Notwithstanding any provision of any Programme Document (including without
limitation the Bond Trust Deed) to the contrary, the Covered Bond Guarantor
will only be required to make a payment, or procure a payment to be made,
under the Covered Bond Guarantee to the extent that the Covered Bond Guarantor
is required to make such payment in accordance with the Guarantee Priority of
Payments.
Subject to the grace periods specified in Condition 9(b), failure by the
Covered Bond Guarantor to pay the Guaranteed Amounts when Due for Payment will
constitute a Covered Bond Guarantor Event of Default.
Covered Bond Guarantor not obliged to pay additional amounts
All payments of Guaranteed Amounts by or on behalf of the Covered Bond
Guarantor must be made without withholding or deduction for, or on account of,
any present or future taxes, duties, assessment or governmental charges of
whatever nature imposed or levied by or on behalf of Australia or any
political sub-division thereof or by any authority therein or thereof having
power to tax, unless such withholding or deduction is required by law or
regulation or administrative practice of any jurisdiction. If any such
withholding or deduction is required, the Covered Bond Guarantor will pay the
Guaranteed Amounts net of such withholding or deduction and will account to
the appropriate Tax Authority for the amount required to be withheld or
deducted. The Covered Bond Guarantor will not be obliged to pay any
additional amount to the Bond Trustee or any holder of Covered Bonds and/or
Coupons in respect of the amount of such withholding or deduction.
See further "Taxation".
Covered Bond Guarantor as principal debtor and not merely as surety
The Covered Bond Guarantor has agreed that its obligations under the Bond
Trust Deed (including in respect of the Covered Bond Guarantee) will be as if
it were principal debtor and not merely as surety or guarantor and will be
direct, absolute and (to the extent that such obligations extend to the
Covered Bond Guarantee, following service of an Issuer Acceleration Notice and
Notice to Pay or a Covered Bond Guarantee Acceleration Notice) unconditional
obligations of the Covered Bond Guarantor, secured as provided in the Security
Deed and limited in recourse against the Covered Bond Guarantor, irrespective
of, and unaffected by, any invalidity, irregularity, illegality or
unenforceability of, or defect in, any provisions of the Bond Trust Deed or
any other Programme Document, or the absence of any action to enforce the same
or the waiver, modification or consent by the Bond Trustee, any of the Covered
Bondholders or Couponholders in respect of any provisions of the same or the
obtaining of any judgment or decree against the Issuer or any action to
enforce the same or any other circumstances which might otherwise constitute a
legal or equitable discharge or defence of a guarantor.
Excess Proceeds
Following the occurrence of an Issuer Event of Default and the delivery of an
Issuer Acceleration Notice and Notice to Pay, any Excess Proceeds will be paid
by the Bond Trustee on behalf of the Covered Bondholders of the relevant
Series to the Covered Bond Guarantor, as soon as practicable, and will be held
by the Covered Bond Guarantor in the GIC Account and the Excess Proceeds will
thereafter form part of the Charged Property and will be used by the Covered
Bond Guarantor in the same manner as all other moneys from time to time
standing to the credit of the GIC Account pursuant to the Security Deed and
the Establishment Deed. Any Excess Proceeds received by the Bond Trustee and
held by it or under its control will discharge pro tanto the obligations of
the Issuer in respect of the Covered Bonds and Coupons (as applicable and to
the extent of the amount so received and subject to restitution of the same if
such Excess Proceeds will be required to be repaid by the Covered Bond
Guarantor) (but will be deemed not to have so discharged the Issuer's
obligations for the purposes of subrogation rights of the Covered Bond
Guarantor contemplated by the Bond Trust Deed). However, the obligations of
the Covered Bond Guarantor under the Covered Bond Guarantee are (following
service of an Issuer Acceleration Notice and Notice to Pay or if earlier,
service of a Covered Bond Guarantee Acceleration Notice) unconditional and
irrevocable and the receipt by, or on behalf of, the Bond Trustee of any
Excess Proceeds will not reduce or discharge any such obligations.
By subscribing for Covered Bonds, each Covered Bondholder will be deemed to
have irrevocably directed the Bond Trustee to pay the Excess Proceeds to the
Covered Bond Guarantor in the manner as described above.
For the avoidance of doubt, any payments by the Covered Bond Guarantor to the
Covered Bondholders out of the Excess Proceeds, will reduce the Guaranteed
Amounts pro tanto.
The Bond Trust Deed (other than certain provisions of the Bond Trust Deed
under which the Issuer covenants to the Bond Trustee to repay principal and to
pay interest in respect of the Covered Bonds (but only in respect of such
provisions, to the extent that they relate to any A$ Registered Covered
Bonds), certain provisions of the Bond Trust Deed constituting the A$ Covered
Bonds and certain provisions of the Bond Trust Deed limiting recourse to the
Covered Bond Guarantor and the Security Trustee) and any non-contractual
obligations arising out of or in connection with it are governed by, and are
construed in accordance with, English law. Those provisions of the Bond
Trust Deed noted above which are not governed by English law, are governed by,
and are construed in accordance with, the laws applying in the State of New
South Wales, Australia.
Intercompany Note Subscription Agreement
Under the Intercompany Note Subscription Agreement, the Intercompany Note
Subscriber has agreed to subscribe for intercompany notes to be issued by the
Covered Bond Guarantor (each an Intercompany Note) in an aggregate amount
equal to the Total Intercompany Note Commitment, when requested to do so by
the Covered Bond Guarantor. Each Intercompany Note may be issued either in the
relevant Specified Currency of the related Series or Tranche of Covered Bonds
and in an amount equal to the Principal Amount Outstanding as at the Issue
Date of that Series or Tranche of Covered Bonds or in Australian Dollars in an
amount equal to the Australian Dollar Equivalent of the Principal Amount
Outstanding of the related Series or Tranche of Covered Bonds as at the Issue
Date.
The proceeds of the issue of an Intercompany Note may only be used by the
Covered Bond Guarantor (if not denominated in Australian Dollars, upon
exchange into Australian Dollars under the applicable Covered Bond Swap):
(a) in relation to the issue of a Series or Tranche of Covered
Bonds, to fund (in whole or part) the Consideration for Mortgage Loan Rights
to be purchased from the Seller in accordance with the terms of the Mortgage
Sale Agreement;
(b) if Mortgage Loan Rights are purchased from the Seller in
advance of an issue of a Series or Tranche of Covered Bonds using the proceeds
from an issue of, or Increase in, the Demand Note, to repay the Demand Note in
an amount equal to the Series or Tranche of Covered Bonds issued which relate
to the Intercompany Notes; and/or
(c) to invest in Substitution Assets (in an amount not exceeding
the prescribed limit) to the extent required to meet the Asset Coverage Test,
and thereafter the Covered Bond Guarantor may use such proceeds (if not
denominated in Australian Dollars, upon exchange into Australian Dollars under
the applicable Covered Bond Swap) (subject to complying with the Asset
Coverage Test):
(i) if an existing Series or Tranche or part of an existing
Series or Tranche of Covered Bonds is being refinanced by the issue of a
further Series or Tranche of Covered Bonds to which the Intercompany Note
being issued relates, to repay the Intercompany Note(s) corresponding to the
Covered Bonds being so refinanced (after exchange into the currency of the
Intercompany Note(s) being repaid, if necessary);
(ii) to make a repayment of the Demand Note in respect of the
Senior Demand Note Component, provided that the Trust Manager has determined
the principal amount outstanding of the Demand Note by calculating the Asset
Coverage Test as at the Intercompany Note Issue Date having taken into account
such repayment and the Trust Manager has confirmed that the Asset Coverage
Test will continue to be met after giving effect to such repayment; and/or
(iii) to make a deposit of all or part of the proceeds into the
GIC Account (including to fund the Reserve Fund up to an amount which ensures
that the balance of the Reserve Fund does not exceed the Reserve Fund Required
Amount).
The Issuer will not be relying on repayment of Intercompany Notes in order to
meet its repayment obligations under the corresponding Covered Bonds. The
Trust Manager must direct the Covered Bond Guarantor, and upon receiving such
instructions, the Covered Bond Guarantor will pay amounts due in respect of
each Intercompany Note in accordance with the Intercompany Note Subscription
Agreement and the applicable Priority of Payments. Prior to the service of a
Notice to Pay on the Covered Bond Guarantor, amounts due in respect of an
Intercompany Note will be paid by the Covered Bond Guarantor (acting on the
directions of the Trust Manager) to, or as directed by, the Intercompany
Noteholder, on each Intercompany Note Interest Payment Date, subject to paying
all higher ranking amounts in the Pre-Issuer Event of Default Income Priority
of Payments or, as applicable, the Pre-Issuer Event of Default Principal
Priority of Payments. Any failure by the Covered Bond Guarantor (acting on
the directions of the Trust Manager) to pay any amounts due on an Intercompany
Note will not affect the liability of the Issuer to pay the amount due on the
corresponding Covered Bonds.
Any amounts owing by the Intercompany Note Subscriber (as issuer of a
particular Series or Tranche of Covered Bonds (as the case may be)) to the
Covered Bond Guarantor in respect of amounts paid by the Covered Bond
Guarantor under the Covered Bond Guarantee in relation to the particular
Series or Tranche of Covered Bonds or the purchase of the particular Series or
Tranche of Covered Bonds by the Covered Bond Guarantor, as applicable, will be
set-off automatically (and without any action being required by the Covered
Bond Guarantor, the Trust Manager, the Intercompany Note Subscriber or the
Security Trustee) against the principal amount outstanding of the Intercompany
Note corresponding to the particular Series or Tranche of Covered Bonds
together with any accrued but unpaid interest in relation to the Intercompany
Note. The amount set-off will be the amount of the relevant payment made by
the Covered Bond Guarantor under the Covered Bond Guarantee in relation to the
relevant Covered Bonds or the Principal Amount Outstanding of any Covered
Bonds purchased or otherwise acquired and cancelled in accordance with
Condition 6(h) or Condition 6(i), as applicable, which amount will be applied
to reduce the principal amount outstanding of the Intercompany Note
corresponding to the Relevant Covered Bonds, any accrued but unpaid interest
in relation to the Intercompany Note (in each case converted into Australian
Dollars at the applicable Covered Bond Swap Rate where the Intercompany Note
is not denominated in Australian Dollars) and any amounts due and payable in
relation to the Demand Note, in the following order of priority:
(a) first, to reduce and discharge interest (including accrued
interest) due and unpaid on the principal amount outstanding in relation to
such Intercompany Note;
(b) second, to reduce and discharge the principal amount
outstanding in relation to such Intercompany Note;
(c) third, to reduce and discharge any other amounts due and
payable by the Covered Bond Guarantor to the Intercompany Note Subscriber
under the Intercompany Note Subscription Agreement; and
(d) fourth, to reduce and discharge amounts due and payable by
the Covered Bond Guarantor to the Demand Note Subscriber under the Demand Note
Subscription Agreement.
This set-off will apply notwithstanding the Priorities of Payments.
The Intercompany Note Subscription Agreement is governed by, and construed in
accordance with, the laws applying in the State of New South Wales, Australia.
Demand Note Subscription Agreement
Under the Demand Note Subscription Agreement, the Demand Note Subscriber has
agreed to subscribe for a demand note to be issued by the Covered Bond
Guarantor (the Demand Note) and thereafter to subscribe for increases in the
principal amount outstanding of the Demand Note previously issued (each, an
Increase) in an aggregate amount up to the Total Demand Note Commitment when
requested to do so by the Covered Bond Guarantor. The Demand Note will be
denominated in Australian Dollars. Interest on the Demand Note accrues from
day to day and is to be calculated on actual days elapsed and a 365-day year.
Such interest is payable in arrears on each Distribution Date and accrues at a
rate to be determined by the Demand Note Subscriber and the Trust Manager.
The balance of the Demand Note will fluctuate over time, as described below.
The proceeds of the issue of the Demand Note or an Increase in relation to the
Demand Note may only be used by, or on behalf of, the Covered Bond Guarantor:
(a) as whole or partial consideration for the acquisition of
Mortgage Loan Rights from the Seller on a Closing Date;
(b) to prevent or rectify a failure to meet the Asset Coverage
Test;
(c) to rectify an Interest Rate Shortfall;
(d) to fund (in whole or in part) the repayment by the Covered
Bond Guarantor of any outstanding Intercompany Notes issued by the Covered
Bond Guarantor;
(e) to make a deposit to the Reserve Fund; or
(f) for any other purpose whatsoever as may be agreed from time
to time between the Covered Bond Guarantor (acting at the direction of the
Trust Manager) and the Demand Note Subscriber.
Unless otherwise agreed by the Demand Note Subscriber, the Demand Note
Subscriber will not subscribe for the issue of, or an Increase in, the Demand
Note following an Issuer Event of Default.
Senior Demand Note Component and Junior Demand Note Component
The Demand Note notionally comprises of two separate tranches, a Senior Demand
Note Component and a Junior Demand Note Component (each as defined below).
If the Issuer has determined that a Regulatory Event has occurred or is likely
to occur and the Issuer has so notified the Covered Bond Guarantor and the
Trust Manager, then:
(a) The Senior Demand Note Component will be the amount by which
the then principal amount outstanding of the Demand Note is greater than the
principal amount outstanding of the Demand Note which is required to satisfy
the Asset Coverage Test. If there is no such excess then the Senior Demand
Note Component is equal to zero. In effect, the Senior Demand Note Component
represents the voluntary over-collateralisation in the Trust over and above
the over-collateralisation that is required to satisfy the Asset Coverage
Test.
(b) The Junior Demand Note Component will be equal to the
principal amount outstanding of the Demand Note less the Senior Demand Note
Component. In effect, the Junior Demand Note Component represents the
over-collateralisation that the Trust is required to hold to satisfy the Asset
Coverage Test.
There is no Senior Demand Note Component unless the Issuer has made the
determination described above and notified the Covered Bond Guarantor and
Trust Manager accordingly.
Repayment of the Demand Note
The Covered Bond Guarantor must repay or otherwise satisfy the principal
amount of the Demand Note in accordance with the applicable Priority of
Payments and the terms of the Demand Note Subscription Agreement and the
Establishment Deed.
Amounts due and payable by the Covered Bond Guarantor in respect of the Demand
Note will be repaid or otherwise satisfied:
· if, and only if, the Issuer has determined and notified
the Covered Bond Guarantor and the Trust Manager of the occurrence or likely
occurrence of a Regulatory Event, in respect of the Senior Demand Note
Component, only either:
· by way of set-off by application of the proceeds of the
issue of Intercompany Notes as described in "-Intercompany Note Subscription
Agreement - The proceeds of the issue of Intercompany Notes" above which will
be set-off as described below; or
· by an in specie distribution of Mortgage Loan Rights to
the Demand Noteholder except if there is an In Specie Failure in which case a
payment pursuant to the applicable Priority of Payments is permissible; and
· otherwise, if the Issuer has not determined and notified
the Covered Bond Guarantor and the Trust Manager of the occurrence or likely
occurrence of a Regulatory Event or, if it has, in respect of the Junior
Demand Note Component, by application of such amounts as are available under
the Priorities of Payments. In addition, in respect of the Junior Demand
Note Component, the Trust Manager may (at its discretion) direct the Covered
Bond Guarantor to distribute any Mortgage Loan Rights forming part of the
Trust in full in specie to satisfy any outstanding payment obligations to the
Demand Noteholder.
Any in specie distribution will be without recourse to the Covered Bond
Guarantor, the Trust Manager and the Security Trustee and without
representation or warranty by the Covered Bond Guarantor, the Trust Manager or
the Security Trustee. For the purposes of an in specie distribution the
value of the relevant Mortgage Loan Rights to be distributed by the Covered
Bond Guarantor or the Security Trustee will be determined by the Trust Manager
(in the case of a distribution in accordance with the Pre-Issuer Event of
Default Principal Priority of Payments or the Guarantee Priority of Payments)
or the Security Trustee (in the case of a distribution in accordance with the
Post-Enforcement Priority of Payments), by reference to the Current Principal
Balance plus any accrued interest or arrears of interest in respect of the
corresponding Mortgage Loans calculated as at the date of the in specie
distribution and the Mortgage Loan Rights must be selected by the Trust
Manager (in the case of a distribution in accordance with the Pre-Issuer Event
of Default Principal Priority of Payments or the Guarantee Priority of
Payments) or the Security Trustee (in the case of a distribution in accordance
with the Post-Enforcement Priority of Payments) on a basis that is
representative of the Mortgage Loan Rights then forming part of the Assets of
the Trust.
The principal amount outstanding of the Demand Note (or relevant part of it)
will be repaid or otherwise satisfied by the Covered Bond Guarantor on the
Distribution Date falling immediately after a demand is made by the Demand
Noteholder to the Covered Bond Guarantor unless on such day: (i) the Asset
Coverage Test, as calculated by the Trust Manager, will not be satisfied after
giving effect to such repayment and any other amounts to be paid pursuant to
the applicable Priority of Payments on the next Distribution Date, in which
case, only that portion of the amount of the Demand Note which could be repaid
whilst remaining in compliance with the Asset Coverage Test will be due and
payable on such day; or (ii) an Asset Coverage Test Breach Notice has been
given on or prior to such day and has not been revoked.
If a Covered Bond Guarantee Acceleration Notice has been served, the principal
amount of the Demand Note will be due and payable by the Covered Bond
Guarantor in accordance with and subject to the Post-Enforcement Priority of
Payments.
If the Covered Bonds of each Series and Tranche have been repaid in full and
the Issuer has confirmed that no additional Covered Bonds will be issued under
the Programme Documents, the principal amount of the Demand Note will be due
and payable by the Covered Bond Guarantor in accordance with and subject to
the applicable Priority of Payments.
The principal amount of the Demand Note relating to an Interest Rate Shortfall
Demand Note Funding will be due and payable by the Covered Bond Guarantor in
accordance with and subject to the applicable Priority of Payments.
Repayment of amounts due and payable by the Covered Bond Guarantor in respect
of the Demand Note will:
· if, and only if, the Issuer has determined and notified
the Covered Bond Guarantor and the Trust Manager of the occurrence or likely
occurrence of a Regulatory Event, in respect of the Senior Demand Note
Component, rank senior to the amounts due and payable by the Covered Bond
Guarantor to the Covered Bondholders and Couponholders under the Covered Bond
Guarantee and to the Intercompany Noteholder under the Intercompany Notes, as
applicable, under the Pre-Issuer Event of Default Priorities of Payment, the
Guarantee Priority of Payments and the Post-Enforcement Priority of Payments
unless there is an In Specie Failure, in which case such amounts will be
subordinated; and
· otherwise, if the Issuer has not determined and notified
the Covered Bond Guarantor and the Trust Manager of the occurrence or like
occurrence of a Regulatory Event or, if it has, in respect of the Junior
Demand Note Component only, be subordinated to the amounts due and payable by
the Covered Bond Guarantor to the Covered Bondholders and Couponholders under
the Covered Bond Guarantee and to the Intercompany Noteholder under the
Intercompany Notes, as applicable, under the Pre-Issuer Event of Default
Priorities of Payments, the Guarantee Priority of Payments and the
Post-Enforcement Priority of Payments.
Any amounts owing by the Intercompany Note Subscriber (as Issuer of a
particular Series or Tranche of Covered Bonds (as the case may be)) to the
Covered Bond Guarantor in respect of amounts paid by the Covered Bond
Guarantor under the Covered Bond Guarantee in relation the particular Series
or Tranche of Covered Bonds or the purchase of the particular Series or
Tranche of Covered Bonds by the Covered Bond Guarantor, as applicable, which
are not set-off in accordance with the order of priority contained in the
Intercompany Note Subscription Agreement (set out in "Intercompany Note
Subscription Agreement" above) will be set-off automatically (and without any
action being required by the Covered Bond Guarantor, the Trust Manager, the
Intercompany Note Subscriber, the Demand Note Subscriber or the Security
Trustee) against any amounts payable by the Covered Bond Guarantor in respect
of the Demand Note or under the Demand Note Subscription Agreement in the
following order of priority:
(a) first, to reduce and discharge interest (including accrued
interest) due and unpaid on the principal amount outstanding of the Demand
Note;
(b) second, to reduce and discharge the principal amount
outstanding of the Demand Note; and
(c) third, to reduce and discharge any other amounts due and
payable by the Covered Bond Guarantor to the Demand Note Subscriber under the
Demand Note Subscription Agreement.
This set-off will apply notwithstanding the Priorities of Payments.
The Demand Note Subscription Agreement is governed by, and construed in
accordance with, the laws applying in the State of New South Wales, Australia.
Mortgage Sale Agreement
Sale by the Seller of Mortgage Loan Rights
Mortgage Loan Rights have been, and will be, sold to the Covered Bond
Guarantor from time to time on a fully serviced basis pursuant to the terms of
the Mortgage Sale Agreement entered into on or about the Programme Date
between BOQ (in its capacity as Seller, Issuer, Servicer and beneficiary of
the BOQ Trust), the Covered Bond Guarantor (in its capacity as trustee of the
Trust and as trustee of the BOQ Trust), the Trust Manager and the Security
Trustee.
The types of Mortgage Loans forming part of the Assets of the Trust will vary
over time provided that, at the time the relevant Mortgage Loan is sold to the
Covered Bond Guarantor, the Mortgage Loan is an Eligible Mortgage Loan (as
described below) on the relevant Cut-Off Date. Accordingly, Mortgage Loan
Rights sold by the Seller to the Covered Bond Guarantor on a Closing Date may
have characteristics that differ from Mortgage Loan Rights already forming
part of the Assets of the Trust as at that date.
Prior to the occurrence of an Issuer Event of Default or a Covered Bond
Guarantor Event of Default, the Covered Bond Guarantor will acquire Mortgage
Loan Rights from the Seller in the circumstances described below:
(a) prior to the issue of any Covered Bonds in accordance with
the Programme, the Covered Bond Guarantor may issue the Demand Note or request
an Increase in the Demand Note from the Demand Note Subscriber, the proceeds
of which may be applied by the Covered Bond Guarantor to acquire Mortgage Loan
Rights from the Seller on the relevant Closing Date;
(b) in relation to the issue of Covered Bonds from time to time
in accordance with the Programme, the Intercompany Note Subscriber will
subscribe for an Intercompany Note issued by the Covered Bond Guarantor, the
proceeds of which, together with (if applicable) any proceeds from the issue
of, or an Increase in, the Demand Note and any Available Principal Amount
available for that purpose, may be applied in whole or in part by the Covered
Bond Guarantor to acquire Mortgage Loan Rights from the Seller on the relevant
Issue Date;
(c) if at any time prior to the service of an Asset Coverage
Test Breach Notice (which has not been deemed to have been revoked) and prior
to the occurrence of an Issuer Event of Default and service of an Issuer
Acceleration Notice or the occurrence of a Covered Bond Guarantor Event of
Default and service of a Covered Bond Guarantee Acceleration Notice, part of
the Available Principal Amount is available to be applied under paragraph
(g)(i) of the Pre-Issuer Event of Default Principal Priority of Payments and
the Trust Manager notifies the Seller and requests the Seller to offer to sell
Mortgage Loan Rights to the Covered Bond Guarantor, the Seller will use all
reasonable endeavours to offer to sell such Mortgage Loan Rights to the
Covered Bond Guarantor and such Mortgage Loan Rights will be purchased by the
Covered Bond Guarantor using that part of the Available Principal Amount;
(d) the Trust Manager is required to ensure that the Adjusted
Aggregate Mortgage Loan Amount is maintained at all times in compliance with
the Asset Coverage Test (as determined by the Trust Manager on each
Determination Date but by reference to the Adjusted Aggregate Mortgage Loan
Amount as at the last day of the immediately preceding Collection Period). If
on any Determination Date the Adjusted Aggregate Mortgage Loan Amount (as at
the last day of the immediately preceding Collection Period) is less than the
Australian Dollar Equivalent of the aggregate Principal Amount Outstanding (as
at the last day of the immediately preceding Collection Period) of the Covered
Bonds, the Seller will use all reasonable endeavours to offer to sell
sufficient Mortgage Loan Rights to the Covered Bond Guarantor so the Asset
Coverage Test is satisfied on the immediately following Determination Date;
and
(e) if there is an Interest Rate Shortfall, and the Trust
Manager notifies the Servicer and the Seller, having regard to the obligations
of the Covered Bond Guarantor and the amount of that Interest Rate Shortfall,
that further Mortgage Loan Rights should be offered by the Seller to the
Covered Bond Guarantor pursuant to the Mortgage Sale Agreement to rectify the
Interest Rate Shortfall, the Seller will use all reasonable endeavours to
offer to sell in accordance with the Mortgage Sale Agreement sufficient
Mortgage Loan Rights to the Covered Bond Guarantor to ensure that there will
not be an Interest Rate Shortfall on the next Determination Date.
The Seller will not be obliged to sell Mortgage Loan Rights to the Covered
Bond Guarantor and the Covered Bond Guarantor will not be obliged to acquire
such Mortgage Loan Rights as described in paragraphs (c), (d) and (e) above
if, in the reasonable opinion of the Seller, the sale would materially
adversely affect the business or financial condition of the Seller.
In exchange for the sale of the Mortgage Loan Rights to the Covered Bond
Guarantor, the Seller will receive a payment of the Consideration for the
Mortgage Loan Rights in accordance with the applicable Priority of Payments.
The Seller and the Covered Bond Guarantor may agree that all or part of the
Consideration for any new Mortgage Loan Rights will be set-off against any
amount payable on the relevant Closing Date by BOQ as Intercompany Note
Subscriber and/or Demand Note Subscriber in accordance with the Intercompany
Note Subscription Agreement and/or Demand Note Subscription Agreement. The
Seller will be required to repurchase Mortgage Loan Rights sold to the Covered
Bond Guarantor in the circumstances described under "Repurchase by the Seller
following breach of Representations and Warranties" below.
Eligible Mortgage Loans
The Seller gives certain representations and warranties in respect of each
Mortgage Loan, which include that the Mortgage Loan is an Eligible Mortgage
Loan as at the relevant Cut-Off Date. An Eligible Mortgage Loan is a Mortgage
Loan that satisfies the following conditions:
(a) it is repayable in Australian Dollars;
(b) it has a stated term remaining to maturity as at the Cut-Off
Date not exceeding 30 years;
(c) it is freely capable of being dealt with by the Seller;
(d) it is secured by a mortgage over property in Australia which
is either:
(i) a first ranking mortgage; or
(ii) a second ranking mortgage where there are two mortgages
over the property and the registered first ranking mortgage is also being or
has been acquired by the Covered Bond Guarantor;
(e) that as at the Cut-Off Date no payment due from the Borrower
under the Mortgage Loan is in arrears by more than 30 days;
(f) the Mortgage Loan is secured by a Mortgage over Land which
is residential property;
(g) the Mortgage Loan is not a construction loan;
(h) the Mortgage Loan is not secured by a Mortgage over Land
which is vacant; and
(i) the Current Principal Balance does not exceed A$2,000,000.
On each Cut-Off Date, the Representations and Warranties (described below in
"Representations and Warranties") will be given by the Seller in respect of
the Mortgage Loan Rights sold by the Seller to the Covered Bond Guarantor on
that Closing Date.
Transfer of Title to the Mortgage Loan Rights to the Covered Bond Guarantor
Mortgage Loan Rights will be sold by the Seller to the Covered Bond Guarantor
by way of statutory assignment. Notice of the sale will not be initially
provided to the Borrowers. Mortgages will be sold by the Seller to the Covered
Bond Guarantor by way of equitable assignment.
Each of the following events is a Perfection of Title Event:
(a) the occurrence of an Issuer Event of Default that is
subsisting and the service on the Issuer and the Covered Bond Guarantor of an
Issuer Acceleration Notice and the service on the Covered Bond Guarantor of a
Notice to Pay, unless the Seller has notified the Covered Bond Guarantor that
it will accept the offer set out in a Selected Mortgage Loan Rights Offer
Notice within the prescribed time in relation to the Mortgage Loan Rights
specified in the Selected Mortgage Loan Rights Offer Notice; or
(b) at the request of the Covered Bond Guarantor (acting on the
directions of the Trust Manager) following the acceptance of an offer to sell
the Selected Mortgage Loan Rights (in accordance with the Programme Documents)
to any person who is not the Seller; or
(c) the Seller and/or the Covered Bond Guarantor being required
to perfect legal title to the Mortgage Loan Rights by law or by an order of a
court of competent jurisdiction; or
(d) the Security under the Security Deed or any material part of
the Security being in the opinion of the Security Trustee (acting on the
directions of (if any Covered Bonds are outstanding) the Bond Trustee or (if
no Covered Bonds are outstanding) the Majority Secured Creditors in jeopardy
and the Security Trustee being directed by the Bond Trustee (if any Covered
Bonds are outstanding and subject to the provisions of the Bond Trust Deed)
or, if there are no Covered Bonds outstanding, the Majority Secured Creditors,
to take that action to reduce that jeopardy; or
(e) the termination of BOQ's role as Servicer under the
Servicing Deed unless: (i) at the relevant date of termination any Substitute
Servicer is a member of the BOQ Group; or (ii) the Security Trustee otherwise
consents (such consent to be given if a Rating Affirmation Notice has been
issued by the Issuer to the Covered Bond Guarantor and the Security Trustee in
respect of the termination of BOQ's role as Servicer); or
(f) the Seller requesting at its absolute discretion the
perfection of a sale of Mortgage Loan Rights by giving notice in writing to
the Covered Bond Guarantor and the Security Trustee; or
(g) the occurrence of an Insolvency Event in relation to the
Seller; or
(h) the Seller's:
(i) unsecured, unsubordinated, long-term senior debt
obligations have been downgraded below BBB- by Fitch; or
(ii) counterparty risk assessment from Moody's is below Baa3(cr)
or, if the Seller does not have a counterparty risk assessment from Moody's,
its unsecured, unsubordinated, long-term senior debt obligations have been
downgraded below Baa3 by Moody's;
or, in each case, such other rating in respect of the Seller as is agreed
between the Trust Manager and the Seller and in respect of which the Issuer
has issued a Rating Affirmation Notice in respect of each Rating Agency.
Following the occurrence of a Perfection of Title Event that is subsisting,
the Covered Bond Guarantor may only take any action:
(a) in the case of the Perfection of Title Event referred to in
paragraph (a) above, in respect of all Mortgage Loans forming part of the
Assets of the Trust other than any Selected Mortgage Loan Rights specified in
a Selected Mortgage Loan Rights Offer Notice given by the Covered Bond
Guarantor to the Seller which has been accepted by the Seller within the
prescribed time;
(b) in the case of the Perfection of Title Event referred to in
paragraph (b) above, in respect of the relevant Selected Mortgage Loan Rights
only;
(c) in the case of the Perfection of Title Event referred to in
paragraph (c) above, in respect of affected Mortgage Loan Rights only; and
(d) in the case of any other Perfection of Title Event, in
respect of all Mortgage Loan Rights forming part of the Assets of the Trust,
in each case, the Affected Mortgage Loan Rights.
If a Perfection of Title Event of which the Covered Bond Guarantor is actually
aware is subsisting, the Covered Bond Guarantor must, as soon as reasonably
practicable, by notice in writing to the Seller, Servicer, Trust Manager,
Security Trustee and each Rating Agency, declare that a Perfection of Title
Event has occurred unless the Issuer issues a Rating Affirmation Notice prior
to such declaration.
The Seller agrees (to the extent that any of the following is vested in it) to
hold all right, title, interest and benefit (both present and future) in and
under: (i) the Mortgage Loan Rights following the acquisition of such Mortgage
Loan Rights by the Covered Bond Guarantor; and (ii) any sums that are or may
become due in respect thereof, on trust for the Covered Bond Guarantor
(excluding from such trust any Mortgage Loans cease to be Assets of the
Trust).
Prior to the first Closing Date, the Seller must deliver powers of attorney in
registrable form in each Australian jurisdiction appointing the Covered Bond
Guarantor as its attorney to, amongst other things: (1) execute, deliver and
lodge any Mortgage Transfer relating to any Mortgage Loans forming part of the
Assets of the Trust and any other documents referred to in a Mortgage Transfer
which are ancillary to them or contemplated by them with any land titles
office in any relevant Australian jurisdiction; (2) give effect to the
transactions contemplated by any Mortgage Transfer; (3) exercise any rights of
the Seller to vary by notice to the Borrower the rate or amount of any
interest or fees payable by the Borrower under the related Mortgage Loan;
and/or (4) do anything incidental to or conducive to the effective and
expeditious exercise of its rights under the powers of attorney (the Seller
Powers of Attorney). The Seller Powers of Attorney will not be exercisable by
the Covered Bond Guarantor until the occurrence of a Perfection of Title
Event.
If, and only if, the Covered Bond Guarantor makes a declaration of a
Perfection of Title Event as discussed above, the Covered Bond Guarantor and
the Trust Manager must as soon as practicable: (i) take all necessary steps to
perfect in the name of the Covered Bond Guarantor the Covered Bond Guarantor's
legal title to the Mortgages in respect of the Affected Mortgage Loan Rights
then forming part of the Assets of the Trust (including lodgement of Mortgage
Transfers (where necessary, executed under a Seller Power of Attorney) with
the land titles office of the appropriate jurisdiction to achieve registration
of the Mortgages in respect of the Affected Mortgage Loan Rights then forming
part of the Assets of the Trust); (ii) notifying the Borrowers of the sale of
Mortgage Loans and Mortgages in respect of the Affected Mortgage Loan Rights
then forming part of the Assets of the Trust including informing them (where
appropriate) that they should make payment to the Trust Account specified to
them by the Covered Bond Guarantor; and (iii) taking possession of all
Mortgage Documents (subject to the Privacy Act and the Seller's duty of
confidentiality to its customers under general law or otherwise). Prior to any
such declaration, the Seller will retain legal title to the Mortgage Loan
Rights and custody of the Mortgage Documents.
The Seller indemnifies the Covered Bond Guarantor from and against any
Liabilities incurred by the Covered Bond Guarantor in perfecting the Covered
Bond Guarantor's legal title to the Mortgages then forming part of the Assets
of the Trust in accordance with the Mortgage Sale Agreement.
Representations and Warranties
The Covered Bond Guarantor has not made or has caused to be made on its behalf
any enquiries, searches or investigations in respect of the Mortgage Loan
Rights to be sold to the Covered Bond Guarantor. Instead, each will rely
entirely on the Representations and Warranties made by the Seller and
contained in the Mortgage Sale Agreement. As at the relevant Cut-Off Date,
the Seller makes the following Representations and Warranties in relation to
each Mortgage Loan sold or to be sold to the Covered Bond Guarantor:
(a) at the time that the Seller entered into the Mortgage
relating to the Mortgage Loan, each Mortgage, Loan Agreement and Collateral
Security complied in all material respects with applicable laws (including
applicable Consumer Credit Code laws and the National Consumer Credit
Protection Laws, as applicable) and, as at the Cut-Off Date, the Seller is not
aware of any failure by it to comply with the National Consumer Credit
Protection Laws (if applicable) in relation to the Mortgage Loan;
(b) at the time that the Seller entered into the Mortgage Loan,
it did so in good faith;
(c) at the time that the Seller entered into the Mortgage Loan,
the Mortgage Loan was originated in the ordinary course of the Seller's
business and since that time the Seller has dealt with the Mortgage Loan in
accordance with the Servicing Guidelines and the Servicing Standards;
(d) at the time that the Seller entered into the Mortgage Loan,
all necessary steps were taken in respect of each Mortgage created in
connection with the Mortgage Loan so that each Mortgage complied with the
legal requirements applicable at that time to ensure that each Mortgage was a
first-ranking mortgage (subject to any statutory charges, any prior charges of
a body corporate, service company or equivalent, whether registered or
otherwise, and any other prior Security Interests which do not prevent the
Mortgage from being considered to be a first-ranking mortgage in accordance
with the Servicing Standards) secured over Land in the jurisdiction in which
the relevant Land is located subject to stamping and registration of each
relevant Mortgage in due course;
(e) where there is a second or other mortgage in existence over
Land the subject of a Mortgage in relation to the Mortgage Loan and the Seller
is not the mortgagee of that second or other mortgage, the Seller has ensured
(by way of a Priority Agreement with the subsequent mortgagee or otherwise)
that the Mortgage will rank ahead in priority to the second or other mortgage
on enforcement for an amount not less than the principal amount (plus accrued
but unpaid interest) outstanding on the Mortgage Loan plus such extra amount
determined in accordance with the Servicing Guidelines;
(f) at the time that the Mortgage Loan was approved, the Seller
had not received any notice of the insolvency or the bankruptcy of the
corresponding Borrowers or that the corresponding Borrowers did not have the
legal capacity to enter into the corresponding Mortgage;
(g) the Seller is the sole legal and beneficial owner of the
Mortgage Loan and the related Mortgages and First Layer of Collateral
Securities (other than the Insurance Policies) and to its knowledge, subject
to paragraph (d) above) no prior ranking Security Interest exists in relation
to its right, title and interest in that Mortgage Loan and the related
Mortgages and First Layer of Collateral Securities;
(h) each of the Mortgage Documents (other than the Insurance
Policies in respect of Land) relating to the Mortgage Loan which is required
to be stamped with stamp duty has been duly stamped;
(i) the Mortgage Loan has not been satisfied, cancelled,
discharged or rescinded and the property relating to each relevant Mortgage
has not been released from the security of that Mortgage;
(j) the Seller holds, in accordance with the Servicing
Standards, all documents which, pursuant to the Servicing Standards, it should
hold to enforce the provisions of, and the security created by, the
corresponding Mortgage and the First Layer of Collateral Securities;
(k) other than the relevant Mortgage Documents, there are no
documents entered into between the Seller and the Borrower or any other
relevant party in relation to the Mortgage Loan which would qualify or vary
the terms of the Mortgage Loan except as permitted by the Servicing Standards
(including any variations of a Mortgage Loan which may be made by notice to
the Borrower from the Seller) and recorded in a written instrument forming
part of the mortgage documentation applicable to the Mortgage Loan and any
documentation relating to any corresponding Interest Off-Set Account;
(l) other than in respect of priorities granted by statute,
the Seller has not received notice from any person that it claims to have a
Security Interest ranking in priority to or equal with the Security Interest
held by the Seller and constituted by any corresponding Mortgage;
(m) the Seller holds all consents, licences, approvals,
authorisations and exemptions from any Governmental Agency required as at the
Cut-Off Date for, or in connection with, performance and enforceability in
respect of the Mortgage Loan which, in accordance with the Servicing
Standards, it should hold in relation to the Mortgage Loan as at the Cut-Off
Date;
(n) the Mortgage Loan is an Eligible Mortgage Loan as at the
Cut-Off Date;
(o) except in respect of a Mortgage Loan subject to a fixed rate
of interest (or a rate of interest which can be converted into a fixed rate of
interest or a fixed margin relative to a benchmark) and except as may be
provided by applicable laws (including the Consumer Credit Code and the
National Consumer Credit Protection Laws, as applicable), any Binding
Provision or any Governmental Authority or as may be provided in the
corresponding Mortgage Documents, the interest rate payable on a Mortgage Loan
is not subject to any limitation and no consent, additional memoranda or other
writing is required from the relevant Borrower to give effect to a change in
the interest rate payable on the Mortgage Loan and, subject to the foregoing,
any change in the interest rate may be set at the sole discretion of the
Servicer and is effective no later than when notice is given to the Borrower
in accordance with the terms of the relevant Mortgage Loan;
(p) the Seller is lawfully entitled to sell and assign its
interests in the corresponding Mortgage Loan Rights and to transfer valid and
beneficial title to the Covered Bond Guarantor free from all Security
Interests (other than as described in paragraph (d) above);
(q) it is not aware of anything in relation to the sale of the
Mortgage Loan Rights to the Covered Bond Guarantor which might cause a court
to hold that the sale constitutes an under-value transfer, a fraudulent
conveyance or a voidable preference under any law relating to insolvency;
(r) the sale, transfer and assignment of the Seller's interest
in the Mortgage Loan Rights will not constitute a breach of its obligations or
a default under any Security Interest binding on the Seller or its property;
(s) the terms of the Loan Agreement relating to the Mortgage
Loan require payments in respect of that Mortgage Loan to be made to the
Seller free of set-off, unless prohibited by law; and
(t) the Borrower in respect of the Mortgage Loan has made at
least one Mortgage Loan Scheduled Payment.
BOQ Trust
The Mortgage in respect of a Mortgage Loan forming part of the Assets of the
Trust may constitute an "all moneys mortgage" in that such Mortgage purports
to secure the repayment of indebtedness which a Borrower owes, or may owe, to
the Seller, as applicable, from time to time that is not assigned to the
Covered Bond Guarantor (such as business loans) as well as securing the
repayment of the Mortgage Loan (each, an Other Loan). Pursuant to a trust to
be established upon entry into the Mortgage Sale Agreement (the BOQ Trust),
the Covered Bond Guarantor (as trustee of the BOQ Trust) will hold all of its
right, title and interest in:
(a) the Other Loans;
(b) the balance of the Mortgages, the Mortgage Documents, the
First Layer of Collateral Securities and the Mortgage Receivables (after
taking into account so much of any Mortgage Loan, the First Layer of
Collateral Securities, the Mortgage Receivables and the Mortgage Documents
(including the proceeds of enforcement in relation to such Mortgage Loan)) as
is necessary to enable the full and final repayment of all amounts owing in
respect of the Mortgage Loan; and
(c) the Second Layer of Collateral Securities,
which are assigned to the Covered Bond Guarantor by the Seller for the benefit
of the Seller.
Where:
(a) a Mortgage Loan forms part of the Assets of the Trust; and
(b) an Other Loan forms part of the BOQ Trust; and
(c) a Collateral Security which is part of the First Layer of
Collateral Securities or a Mortgage which secures the Mortgage Loan also
secures the Other Loan,
then:
(i) where the Seller in relation to the Mortgage Loan is the
Servicer, the Servicer is entitled to enforce that Collateral Security or
Mortgage (as the case may be) upon a default occurring in respect of the Other
Loan provided that the enforcement proceeds are paid to the Covered Bond
Guarantor. Upon receipt of such proceeds the Covered Bond Guarantor must:
(A) treat as Collections the amount of such proceeds as is equal
to all amounts outstanding under the relevant Mortgage Loan; and
(B) pay the excess (if any) of such proceeds to the Seller (as
beneficiary of the BOQ Trust) in respect of amounts outstanding under the
Other Loan; or
(ii) where the Seller in relation to a Mortgage Loan is not the
Servicer, the Servicer must enforce that Collateral Security or Mortgage (as
the case may be) upon receipt of a direction to do so from the Seller (as
beneficiary of the BOQ Trust) which states that the relevant Other Loan is in
default. Upon receipt of the enforcement proceeds in respect of that
Collateral Security or Mortgage (as the case may be) the Servicer must pay to
the Covered Bond Guarantor all such proceeds and the Covered Bond Guarantor
must:
(A) treat as Collections the amount of such proceeds as is equal
to all amounts outstanding under the relevant Mortgage Loan; and
(B) pay the excess (if any) of such proceeds to the Seller (as
beneficiary of the BOQ Trust) in respect of amounts outstanding under the
Other Loan.
If a Mortgage Loan has been repaid in full or is treated as having been repaid
in full in accordance with the Mortgage Sale Agreement and the Mortgage Loan
is not discharged, then, from the date of repayment or treated repayment in
full of the Mortgage Loan, automatically by virtue of the Mortgage Sale
Agreement and without the necessity for any further act or instrument or other
thing to be done or brought into existence:
(a) if Perfection of Title has not occurred in respect of that
Mortgage Loan, the Covered Bond Guarantor's entire right, title and interest
in that Mortgage Loan and in the Mortgage Loan Rights in relation to that
Mortgage Loan then forming part of the Assets of the Trust and any Other Loan
in respect of that Mortgage Loan will be extinguished in favour of the Seller
with respect to those Mortgage Loan Rights and that Other Loan with immediate
effect; or
(b) if Perfection of Title has occurred in respect of that
Mortgage Loan, the Covered Bond Guarantor will hold the benefit of its right,
title and interest in and to:
(i) that Mortgage Loan;
(ii) any Mortgages and the First Layer of Collateral Securities,
held in respect of that Mortgage Loan;
(iii) any Mortgage Documents held in relation to that Mortgage
Loan; and
(iv) the Mortgage Receivables held in relation to that Mortgage
Loan,
as trustee of the BOQ Trust.
If the Mortgages, First Layer of Collateral Securities, Mortgage Documents,
Mortgage Receivables or Other Loans referred to above apply to more than one
Mortgage Loan forming part of the Assets of the Trust, the holding of the
Covered Bond Guarantor's interest in such as trustee of the BOQ Trust occurs
only upon repayment in full of all such Mortgage Loans secured by such
Mortgages, First Layer of Collateral Securities, Mortgage Documents, Mortgage
Receivables and Other Loans.
Repurchase by the Seller following breach of Representations and Warranties
If the Trust Manager, the Seller or the Covered Bond Guarantor become actually
aware that a Representation or Warranty was materially breached or materially
incorrect when given in respect of a Mortgage Loan forming part of the Assets
of the Trust it must give notice, in the case of the Trust Manager and the
Seller, to the other parties to the Mortgage Sale Agreement and in the case of
the Covered Bond Guarantor, to the Trust Manager and the Seller, within five
Local Business Days of the relevant party becoming so aware. If that breach is
not remedied to the Covered Bond Guarantor's satisfaction within five AU
Business Days of the Seller or the Trust Manager giving or receiving such
notice, then the Seller must pay to the Covered Bond Guarantor the Current
Principal Balance of the relevant Mortgage Loan plus the arrears of interest
and any accrued interest (in each case, as at the date of delivery of the
notice referred to above) and on receipt of such payment by the Covered Bond
Guarantor, the relevant Mortgage Loan will be treated as having been repaid in
full.
Further drawings under the Mortgage Loans
The Seller will be solely responsible for funding the advance to the relevant
Borrowers of all further drawings, if any, in respect of Mortgage Loans
forming part of the Assets of the Trust (including, but not limited to, Trust
Further Advances).
Further Advances
A Mortgage Loan forming part of the Assets of the Trust will be subject to a
Further Advance when the Seller agrees to an advance of further money to the
relevant Borrower following the making of the initial advance of monies in
respect of such Mortgage Loan which is secured by the same Mortgage as the
initial advance and is recorded on the same account as the initial advance.
The Seller has an absolute right to agree to or refuse to grant a Further
Advance and the Seller will be solely responsible for funding any such Further
Advance to a Borrower.
If the Seller makes an advance to a Borrower and:
(a) the Seller opens a separate account in its records in
relation to the advance, the advance is considered for the purposes of the
Mortgage Sale Agreement to be an Other Loan and upon creation, the Covered
Bond Guarantor will automatically by virtue of the Mortgage Sale Agreement,
and without the necessity for any further act or thing to be done or brought
into existence, hold the benefit of its right, title and interest in such
Other Loan for the Seller as trustee of the BOQ Trust and the Covered Bond
Guarantor will hold any Mortgage and any First Layer of Collateral Securities
in respect of such Other Loan and any Second Layer of Collateral Securities in
respect of such Other Loan in accordance with the Mortgage Sale Agreement;
(b) the Seller records the advance as a debit to the account in
its records for an existing Mortgage Loan forming part of the Assets of the
Trust notwithstanding whether the advance leads to the Scheduled Balance in
respect of that Mortgage Loan (prior to the approval of the advance) being
exceeded by more than one Mortgage Loan Scheduled Payment or not, the advance
is treated as a Further Advance for the purposes of the Mortgage Sale
Agreement and the rights to repayment of such will be a Mortgage Loan Right
forming part of the Assets of the Trust unless the Seller elects, in its
absolute discretion to pay to the Covered Bond Guarantor an amount equal to
the Current Principal Balance (before the advance was made) plus the arrears
of interest and any accrued interest in respect of the relevant Mortgage Loan
(which amount must be deposited into the GIC Account) and on such payment the
Mortgage Loan is, for the purposes of the Mortgage Sale Agreement only,
treated as having been repaid in full.
If the Seller makes a Further Advance and the Seller has not elected to remove
the Mortgage Loan in respect of which such Further Advance was made (and the
related Mortgage Loan Rights) from the Assets of the Trust (a Trust Further
Advance) and, in accordance with the Servicing Deed, notifies the Trust
Manager of the amount of that Trust Further Advance:
(a) if the Seller is the Servicer, the Seller may apply an
amount of Principal Collections held by it prior to deposit in the GIC
Account; or
(b) if the Seller is not the Servicer or if the Seller notifies
the Trust Manager that it cannot, or chooses not to, apply Principal
Collections as described in paragraph (a), the Trust Manager must direct the
Covered Bond Guarantor to pay the Seller that amount from Principal
Collections held by the Covered Bond Guarantor in the GIC Account,
in each case, in reimbursement of such Trust Further Advance, provided that
Principal Collections may only be applied in accordance with paragraphs (a)
and (b) above if there are sufficient Principal Collections to be able to make
the reimbursement and the Trust Manager has confirmed to the Covered Bond
Guarantor that it is satisfied on a reasonable basis that the estimated
Principal Collections for the Collection Period in which the day of
application falls exceeds the aggregate of the amount of that reimbursement
and any other reimbursement made to the Seller during that Collection Period.
If the Covered Bond Guarantor receives a direction from the Trust Manager in
accordance with paragraph (b) above, the Covered Bond Guarantor must pay the
Seller the amount so directed and will be entitled to assume that the Trust
Manager has complied with its obligations described in this paragraph in
giving that direction.
Defaulted Mortgage Loans
If a Mortgage Loan becomes a Defaulted Mortgage Loan, then that Mortgage Loan
will be attributed a zero value in the calculation of the Asset Coverage Test,
the Amortisation Test and the Legislated Collateralisation Test on the
relevant Determination Date.
Seller's general right to repurchase
The Seller may, at any time prior to the occurrence of an Issuer Event of
Default, by serving a Seller Mortgage Loan Repurchase Notice on the Covered
Bond Guarantor (copied to the Trust Manager and the Security Trustee), offer
to repurchase Mortgage Loan Rights from the Covered Bond Guarantor by way of
transfer or surrender in favour of the Seller for an amount equal to the
Current Principal Balance plus arrears of interest and any accrued interest in
respect of the Mortgage Loans relating to such Mortgage Loan Rights. The
Covered Bond Guarantor will be under no obligation whatsoever to accept such
an offer and any such decision will be made by the Trust Manager. In no
circumstances will the Trust Manager direct the Covered Bond Guarantor to (and
the Covered Bond Guarantor will not) accept any such offer unless the Trust
Manager confirms to the Covered Bond Guarantor that, after giving effect to
the sale of the Mortgage Loan Rights, the Asset Coverage Test will be
satisfied.
Timing of repurchase and payment
Subject as provided in "General right to repurchase" above, the Covered Bond
Guarantor (acting on the directions of the Trust Manager) may accept an offer
by the Seller to repurchase Mortgage Loan Rights in writing (including by
email) to the Seller. If the Covered Bond Guarantor so accepts an offer made
by the Seller, the Seller must pay to the Covered Bond Guarantor an amount
equal to the Current Principal Balance plus the arrears of interest and any
accrued interest in respect of the Mortgage Loans the subject of the Seller
Mortgage Loan Repurchase Notice and on receipt of such amount by the Covered
Bond Guarantor the Mortgage Loans will be treated as having been repaid in
full. Such payment must be allocated by the Covered Bond Guarantor to the GIC
Account of the Trust.
A repurchase, by way of transfer or surrender, of the right, title and
interest in any Mortgage Loan Rights in the circumstances described under
"General right to repurchase" will take place on a date agreed by the Seller
and the Covered Bond Guarantor (acting on the directions of the Trust
Manager).
Seller's right of repurchase in respect of Selected Mortgage Loan Rights
Under the terms of the Mortgage Sale Agreement, the Seller will have a right
of repurchase in respect of any sale, in whole or in part, of Selected
Mortgage Loan Rights. The Covered Bond Guarantor may be required to sell
Selected Mortgage Loan Rights in the circumstances described in "Establishment
Deed - Sale of Selected Mortgage Loan Rights following service of an Asset
Coverage Test Breach Notice" and "Establishment Deed - Sale of Selected
Mortgage Loan Rights following service of a Notice to Pay" below.
In connection with the sale of Selected Mortgage Loan Rights, the Covered Bond
Guarantor will, by serving a Selected Mortgage Loan Rights Offer Notice on the
Seller, offer to sell, or surrender in favour of, the Seller those Selected
Mortgage Loan Rights (or to sell the Selected Mortgage Loan Rights to such
other Purchaser nominated by the Seller) for the best price reasonably
available, but in any event: (a) following the service of an Asset Coverage
Test Breach Notice (but prior to the service of a Notice to Pay), for an
amount not less than the Current Principal Balance of the Mortgage Loans
relating to the Selected Mortgage Loan Rights plus the arrears of interest and
any accrued interest; and (b) following the occurrence of an Issuer Event of
Default and service of a Notice to Pay on the Covered Bond Guarantor, for an
amount not less than the Adjusted Required Redemption Amount for the relevant
Series of Pass-Through Covered Bonds. If the Seller accepts the Covered Bond
Guarantor's offer to sell the relevant Selected Mortgage Loan Rights in
accordance with the foregoing, the Seller must, within 10 AU Business Days of
service of the Selected Mortgage Loan Rights Offer Notice on the Seller,
countersign and return to the Covered Bond Guarantor the relevant Selected
Mortgage Loan Rights Offer Notice. The Seller's right to accept the offer (and
therefore exercise its right of repurchase) will be conditional upon the
Covered Bond Guarantor, the Trust Manager and Security Trustee (each acting
reasonably) being satisfied that no Insolvency Event has occurred in respect
of the Seller. Upon receipt by the Covered Bond Guarantor of a countersigned
Selected Mortgage Loan Rights Offer Notice, the Mortgage Loans identified in
the Selected Mortgage Loan Rights Offer Notice will be treated as having been
repaid in full, or surrendered in favour of the Seller, by the payment by the
Seller to the Covered Bond Guarantor of an amount equal to the repurchase
price referred to above and specified in the relevant Selected Mortgage Loan
Rights Offer Notice. Such payment must be allocated by the Covered Bond
Guarantor to the GIC Account.
Completion of such repurchase or surrender (by payment of the repurchase price
by the Seller (or other Purchaser nominated by the Seller)) will take place on
such date as the Covered Bond Guarantor (acting on the directions of the Trust
Manager) and the Seller may agree (provided that such date shall not be later
than the date which is 10 AU Business Days after receipt by the Covered Bond
Guarantor of the Selected Mortgage Loan Rights Offer Notice countersigned by
the Seller.
If the Seller rejects the Covered Bond Guarantor's offer or fails to accept it
in accordance with the foregoing, the Covered Bond Guarantor will offer to
sell the Selected Mortgage Loan Rights to other Purchasers (as described under
"Establishment Deed - Method of Sale of Selected Mortgage Loan Rights" below).
For the purposes of the above:
Adjusted Required Redemption Amount means in relation to a Series of Covered
Bonds:
(i) the Australian Dollar Equivalent of the Required
Redemption Amount; plus or minus
(ii) the Australian Dollar Equivalent of any swap termination
amounts payable under the Covered Bond Swaps corresponding to the Series to or
by the Covered Bond Guarantor less (where applicable) amounts standing to the
credit of (i) the GIC Account and (ii) the principal balance of any
Substitution Assets and Authorised Investments (excluding all amounts to be
applied on the next following Distribution Date to repay higher ranking
amounts in the relevant Priority of Payments and those amounts that are
required to repay any Series of Covered Bonds which mature prior to or on the
same date as the relevant Series of Covered Bonds); plus or minus
(iii) the Australian Dollar Equivalent of any swap termination
amounts payable to or by the Covered Bond Guarantor under the Interest Rate
Swap.
The Mortgage Sale Agreement is governed by, and construed in accordance with,
the laws applying in the State of New South Wales, Australia.
Servicing Deed
Pursuant to the terms of the Servicing Deed dated on or about the Programme
Date between the Covered Bond Guarantor (in its capacity as trustee of the
Trust and as trustee of the BOQ Trust), BOQ (in its capacity as Servicer and
Seller), the Trust Manager and the Security Trustee, the Servicer has agreed
to administer and service on behalf of the Covered Bond Guarantor the Mortgage
Loan Rights sold by the Seller to the Covered Bond Guarantor.
The Servicer must ensure that the servicing of the Mortgage Loan Rights which
from time to time form part of the Assets of the Trust (including the exercise
of the express powers set out in the Servicing Deed) is:
(a) at all times, conducted in the best interests of the Covered
Bond Guarantor;
(b) in compliance with the express limitations of the Servicing
Deed (unless the prior written consent of the Trust Manager and the Covered
Bond Guarantor is obtained); and
(c) to the extent the Servicing Deed does not provide otherwise,
in accordance with the Servicing Standards.
The function of servicing the Mortgage Loans Rights forming part of the Assets
of the Trust is vested in the Servicer to be exercised on behalf, and in the
best interests, of the Covered Bond Guarantor, however the parties to the
Servicing Deed acknowledge and agree that the Servicer is an independent
contractor and not the agent of the Covered Bond Guarantor in the exercise and
performance of its duties under the Servicing Deed.
The Servicer's actions in servicing the Mortgage Loan Rights are binding on
the Covered Bond Guarantor, whether or not such actions or any omissions are
in compliance with the Servicing Deed. The Servicer may appoint an agent or
delegate for the purposes of carrying out and performing its duties and
obligations under the Servicing Deed provided that it meets the conditions as
set out in the Servicing Deed in relation to such appointment. The Servicer at
all times remains liable for its agents and delegates insofar as the act or
omissions of any such person constitute a breach by the Servicer of its
obligations under the Servicing Deed and in respect of payment of fees to any
such person.
Undertakings of the Servicer
Pursuant to the terms of the Servicing Deed, the Servicer must, in servicing
the Mortgage Loan Rights forming part of the Assets of the Trust, exercise its
powers and discretions under the Servicing Deed, the Servicing Guidelines and
the relevant Mortgage Documents to which it is a party in accordance with the
standards and practices suitable for a prudent lender in the business of
making retail home loans and in the best interests of the Covered Bond
Guarantor following such collection procedures it follows with respect to
comparable mortgage loans owned and serviced by it.
Under the Servicing Deed, the Servicer undertakes to, among other things:
(a) promptly ensure that any Mortgage Document in relation to a
Mortgage Loan following any amendment, consolidation, supplementation,
novation or substitution of a Mortgage, is duly stamped (if liable to stamp
duty) and duly registered (where registration is required) with the relevant
land titles office to constitute, in the case of a Mortgage, a subsisting
first-ranking registered mortgage over the relevant property;
(b) promptly notify the Covered Bond Guarantor, the Trust
Manager and the Security Trustee of any material breach of the Servicing
Guidelines by the Servicer in relation to the servicing of the Mortgage Loan
Rights then forming part of the Assets of the Trust;
(c) notwithstanding any other provision of the Servicing Deed,
comply with its obligations under the Mortgage Insurance Policy in respect of
each Mortgage Loan then forming part of the Assets of the Trust;
(d) upon receiving notice that a Borrower desires to repay a
Mortgage Loan in full, prepare and make available documentation and make such
calculations as are necessary to enable repayment of a Mortgage Loan and
discharge of the corresponding Mortgage and any other Collateral Securities
(provided that the Servicer is not required to discharge a Mortgage or any
Collateral Security if it also secures another Mortgage Loan which is an Asset
of the Trust);
(e) if a Perfection of Title Event occurs promptly deliver or
procure delivery to the Covered Bond Guarantor of all Mortgage Documents not
otherwise provided to the Covered Bond Guarantor or the Trust Manager in
accordance with the Mortgage Sale Agreement;
(f) if the Seller makes any Further Advance or otherwise
provides further financial accommodation to a Borrower, ensure that any
further stamp duty which becomes payable on the relevant Mortgage Documents as
a result of such Further Advance or provision of financial accommodation is
duly paid promptly in accordance with any applicable laws;
(g) duly and punctually perform its material obligations under
the Servicing Deed and each of the Mortgage Documents and Programme Documents
to which it is a party;
(h) assist and co-operate with the Covered Bond Guarantor and
the Trust Manager in the Covered Bond Guarantor obtaining legal title to any
Mortgage Loan Rights (to the extent not already held by it) forming part of
the Assets of the Trust following a Perfection of Title Event;
(i) where any material amount of a Mortgage Loan has been
written off as uncollectible in accordance with the Servicing Guidelines and
the Servicing Deed, ensure that the documentation relevant to that Mortgage
Loan is examined to determine whether the Representations and Warranties in
respect of that Mortgage Loan were correct at the relevant Cut-Off Date and
notify the Covered Bond Guarantor if they were incorrect;
(j) give the Covered Bond Guarantor or make available to the
Covered Bond Guarantor by posting such Financial Reports to the Servicer's
website, the audited Financial Reports of the Servicer for each Financial Year
of the Servicer within 120 days of the end of that year;
(k) keep proper and adequate books of account (which may be kept
electronically) for the Mortgage Loan Rights;
(l) subject to the provisions of the Privacy Act and the
Servicer's duty of confidentiality to its clients under general law or
otherwise, promptly make available to the Covered Bond Guarantor, the Trust
Manager, the Auditor and the Security Trustee any books, reports or other oral
or written information and supporting evidence of which the Servicer is aware
that they reasonably request with respect to the Assets of the Trust from time
to time or with respect to the performance by the Servicer of its obligations
under the Programme Documents;
(m) notify the Trust Manager and the Covered Bond Guarantor
promptly if it becomes actually aware that any material representation or
warranty made or taken to be made by or on behalf of the Seller or the
Servicer in connection with a Programme Document is incorrect when made or
taken to be made;
(n) within five AU Business Days of a request from the Covered
Bond Guarantor, the Trust Manager or the Security Trustee, provide the Covered
Bond Guarantor, the Trust Manager or the Security Trustee (as the case may be)
with a certificate from the Servicer signed by two Authorised Signatories of
the Servicer on its behalf which states whether to the best of the Servicer's
knowledge and belief a Servicer Default or, if the Servicer is the Seller, a
Perfection of Title Event has occurred (provided that such a request may only
be made once in each six calendar month period, unless the Covered Bond
Guarantor, the Trust Manager or the Security Trustee (as the case may be) when
making the request sets out reasonable grounds for believing that a Servicer
Default or a Perfection of Title Event is subsisting);
(o) notify the Covered Bond Guarantor, the Trust Manager and the
Security Trustee promptly after the Servicer becomes actually aware of any
Servicer Default or the occurrence of any Perfection of Title Event and at the
same time or as soon as possible thereafter provide full details thereof;
(p) comply with the requirements of any relevant laws in
carrying out its obligations under the Programme Documents including the
Consumer Credit Code and the National Consumer Credit Protection Laws;
(q) obtain and maintain all authorisations, filings and
registrations necessary to properly service the Mortgage Loans;
(r) not merge or consolidate into another entity, unless the
surviving entity assumes its rights and obligations as Servicer and (for so
long as the Servicer is the Seller) the Seller under the Programme Documents
and each Rating Agency is notified;
(s) subject to the provisions of the Australian Banking Act, not
present any application or pass any resolution for the liquidation of the
Servicer, or, subject to paragraph (r), enter into any scheme of arrangement,
merger or consolidation with any other person or enter into any other scheme
under which the Servicer ceases to exist, the assets or liabilities of the
Servicer are vested in or assumed by any other person or either of those
events occur;
(t) duly and punctually file all returns in respect of Tax
which are required to be filed and pay, or procure payment when due, all Taxes
and other outgoings payable by it as and when the same respectively become due
and payable other than outgoings which are being contested in good faith and
promptly pay or cause to be paid those contested outgoings after the final
determination or settlement of such contest;
(u) not, without the prior consent of the Covered Bond Guarantor
and the Security Trustee, apply, transfer or set off the whole or any part of
any amount payable or owed to the Servicer or to which the Servicer is
entitled under any Programme Document towards satisfaction of any obligation
which is owed by the Servicer to the Covered Bond Guarantor or the Trust
Manager under any other Programme Document, other than as contemplated under
any other Programme Document;
(v) other than as a Secured Creditor, not claim any Security
Interest, lien or other possessory right in any of the Assets of the Trust;
(w) following receipt of actual notice of a claim by a third party
with respect to a challenge to the sale and/or assignment to the Covered Bond
Guarantor of any Mortgage Loan Rights forming part of the Assets of the Trust,
promptly give notice in writing of such action or claim to the Covered Bond
Guarantor, the Security Trustee and the Trust;
(x) not transfer, assign, exchange or otherwise grant a Security
Interest over the whole or any part of its right, title and interest in and to
any Mortgage Loan Rights forming part of the Assets of the Trust;
(y) use reasonable efforts to cause all information provided by
it to each Rating Agency in relation to the Trust to be complete and accurate
in all material respects;
(z) upon being directed to do so by the Covered Bond Guarantor
or the Trust Manager following the occurrence of a Perfection of Title Event,
promptly take all action required or permitted by law to assist the Covered
Bond Guarantor and the Trust Manager to perfect the Covered Bond Guarantor's
legal title to the Mortgage Loan Rights forming part of the Assets of the
Trust in accordance with the requirements of the Servicing Deed and the other
Programme Documents;
(aa) comply with all other undertakings given by the Servicer in the
Servicing Deed and the other Programme Documents;
(bb) make reasonable efforts to collect all moneys due under the
terms and provisions of the Mortgage Loan Rights forming part of the Assets of
the Trust and, to the extent such efforts will be consistent with the
Servicing Deed and the other Programme Documents, follow such normal
collection procedures as it deems necessary and advisable;
(cc) if a Mortgage Loan forming part of the Assets of the Trust is a
Defaulted Mortgage Loan, take such action on such basis as the Covered Bond
Guarantor and the Servicer may agree (in accordance and in conjunction with
the Servicer's normal enforcement procedures) to enforce such Mortgage Loan
and any related Mortgage Loan Rights (but only to the extent that the Servicer
determines that enforcement proceedings should be taken) so as to maximise the
return to the Covered Bond Guarantor, taking into account, inter alia, the
timing of any enforcement proceedings provided that the Servicer will not be
required to institute or continue litigation with respect to collection of any
payment if there are reasonable grounds for believing:
(i) the provisions of such Mortgage Loan and any related
Mortgage Loan Rights under which such payment is required are unenforceable;
or
(ii) the payment is uncollectible; or
(iii) the likely proceeds from such litigation, in light of the
expenses in relation to the litigation, do not warrant such litigation;
(dd) take such steps as are necessary to maintain the Covered Bond
Guarantor's title to the Mortgage Loan Rights of the Trust;
(ee) not grant any extension of the time to maturity of a Mortgage
Loan forming part of the Assets of the Trust beyond 30 years from the
Settlement Date for the Mortgage Loan or allow any reduced monthly payment
that would result in such an extension; and
(ff) if any amendment is made to the Servicing Guidelines to, upon
request, deliver a copy of such amendment to the Covered Bond Guarantor, the
Trust Manager, the Security Trustee and the Rating Agencies.
Powers of the Servicer
The Servicer has a number of express powers, which include but are not limited
to the power:
(a) to release or substitute any Mortgage or First Layer of
Collateral Security relating to a Mortgage Loan which is an Asset of the Trust
provided that this is in accordance with the Servicing Guidelines or it is
required by a Binding Provision or an order, decision, finding, judgment or
determination of a Competent Authority or, in the Servicer's opinion, such
action would be taken or required to be taken by a Competent Authority;
(b) subject to certain restrictions set out in the Servicing
Deed (including the restriction identified in paragraph (ff) above), to vary,
extend or relax the time to maturity, the terms of repayment or any other term
of a Mortgage Loan and its related Mortgage and First Layer of Collateral
Securities forming part of the Assets of the Trust;
(c) to release a Borrower from any amount owing under a Mortgage
Loan forming part of the Assets of the Trust or any related Mortgage or First
Layer Collateral Securities where the Servicer has written-off or determined
to write-off that amount as uncollectible in accordance with the Servicing
Standards or where it is required to do so by a Binding Provision or an order,
decision, finding, judgment or determination of a Competent Authority or, in
the Servicer's opinion, such action would be taken or required to be taken by
a Competent Authority;
(d) subject to paragraphs (b) and (c) above, to waive any breach
under, or compromise, compound or settle any claim in respect of, or release
any party from an obligation or claim under, the Mortgage Loans or any related
Mortgage or First Layer of Collateral Securities;
(e) subject to restrictions contained in the Servicing Deed, to
enter into certain Priority Agreements, to consent to the creation or
existence of any Security Interest in relation to any Land the subject of a
Mortgage forming part of the Assets of the Trust;
(f) to institute litigation to recover amounts owing under a
Mortgage Loan; and
(g) to take other enforcement action in relation to a Mortgage
Loan as it determines should be taken.
The Servicing Deed provides that if the Servicer: (i) releases a Mortgage or
First Layer of Collateral Security forming part of the Assets of the Trust;
(ii) reduces the amount outstanding under, or varies the terms (including
without limitation in relation to repayment) of, any Mortgage Loan, related
Mortgage or First Layer of Collateral Security forming part of the Assets of
the Trust; or (iii) grants other relief to a Borrower or the provider of a
First Layer Collateral Security forming part of the Assets of the Trust, after
having formed the opinion that such action would be taken or required by a
Governmental Authority, or pursuant to an order, finding, determination or
judgment of a Governmental Authority and it is determined that such order,
finding, determination or judgment, in either case, was made as a result of
the Seller or Servicer:
(a) breaching any Binding Provision, applicable regulation,
statute or official directive at the time the Mortgage, the First Layer
Collateral Security or the Mortgage Loan was granted or the Further Advance
was made in respect of such Mortgage Loan (other than a Binding Provision,
regulation, statute or official directive which provides for relief on
equitable or like grounds where the Seller or Servicer was acting in
accordance with the standards and practices suitable for a prudent lender in
the business of making retail home loans); or
(b) not acting in accordance with the standards and practices
suitable for a prudent lender in the business of making retail home loans,
then the Servicer must notify the Covered Bond Guarantor and the Trust Manager
of its opinion or the making of such an order, decision, finding, judgment or
determination (as applicable). In addition, the Seller or Servicer (as the
case may be) must pay damages to the Covered Bond Guarantor by 10.00am on the
Distribution Date next occurring after such notification is given by the
Servicer.
The amount of such damages will be the amount agreed between the Covered Bond
Guarantor (following consultation with the Trust Manager and acting on expert
advice taken pursuant to the terms of the Establishment Deed, if necessary)
and the Seller or the Servicer, as the case may be (or, failing agreement, by
the Seller's or the Servicer's external auditors) as being sufficient to
compensate the Covered Bond Guarantor for any losses suffered as a result of
any release, reduction, variation or relief (as the case may be).
The amount of any damages cannot exceed the Current Principal Balance plus any
accrued but unpaid interest in respect of the relevant Mortgage Loan (as
recorded on the Mortgage Loan System) (calculated, in both cases, at the time
of agreement between the Covered Bond Guarantor and the Seller or the Servicer
or by the Seller's or the Servicer's external auditors, as the case may be).
Limitations on Servicer's liability
The Servicer will not incur any liability to any person in respect of any
failure to act where such act will be hindered, prevented or forbidden by any
present or future law. The Servicer will not be responsible to any person
for any loss, damage, claim or demand incurred as a result of:
(a) the wilful default, fraud or negligence of the Security
Trustee or the Covered Bond Guarantor (except, in the case of the Covered Bond
Guarantor, where the Covered Bond Guarantor is the Servicer);
(b) the failure by the Servicer to check any document,
certificate, schedule, form, list or other document prepared or delivered to
it by the Covered Bond Guarantor or the Trust Manager or any agent or
consultant appointed by either of them and reasonably believed by the Servicer
to be genuine; or
(c) any action taken by the Servicer in accordance with any
written direction or instruction from the Covered Bond Guarantor or the Trust
Manager,
except to the extent to which the loss, damage, claim or demand is caused by
any fraud, negligence or wilful default by the Servicer.
The Servicer has agreed to be liable to the Covered Bond Guarantor or any
other Secured Creditor in respect of any loss incurred by the Covered Bond
Guarantor (subject to the below) as a result of any breach by the Servicer of
any term of the Servicing Deed, any fraud, negligence or wilful default by the
Servicer or any breach or default by any other person appointed by the
Servicer to perform its obligations under the Servicing Deed. The maximum
amount which the Servicer will be liable to pay in respect of such breach,
fraud, negligence or wilful default by the Servicer is the Current Principal
Balance of the Mortgage Loan in respect of which such breach, fraud,
negligence or wilful default occurred. The Servicer's liability does not
include any damages in respect of consequential loss. The Covered Bond
Guarantor may only claim damages from the Servicer in accordance with the
foregoing by written notice setting out the grounds for the claim together
with details of the calculation of the loss incurred by the Covered Bond
Guarantor as a result thereof. The Servicer must pay any amounts due in
respect of its liability to the Covered Bond Guarantor within seven AU
Business Days of receipt by it of such written notice (which will represent
prima facie evidence of such amounts).
Interest Rate Shortfall Test
The Servicer will, if the Interest Rate Swap is not in effect in accordance
with its terms, determine on each Determination Date, having regard to:
(a) the fixed interest rate and the variable interest rate and
any other discretionary rate or margin in respect of the Mortgage Loans which
are Assets of the Trust which the Servicer proposes to set under the Servicing
Deed for the Collection Period commencing on the Determination Date; and
(b) the other resources available to the Covered Bond Guarantor,
including the Covered Bond Swap Agreements (if any) and the Reserve Fund (as
advised by the Trust Manager),
whether the Covered Bond Guarantor would receive an amount of income during
the Collection Period commencing on the Determination Date which, when
aggregated with the funds otherwise available to the Covered Bond Guarantor on
the Distribution Date immediately following the Collection Period, is less
than the amount which is the aggregate of: (i) the amount of interest which
would be payable (or provisioned to be paid) by the Covered Bond Guarantor
under the Intercompany Note Subscription Agreement (or, if a Notice to Pay has
been served on the Covered Bond Guarantor, the Covered Bond Guarantee), and
the Demand Note Subscription Agreement on the Distribution Date immediately
following the Collection Period and the relevant amounts payable (or
provisioned to be paid) to the Covered Bond Swap Providers under the Covered
Bond Swap Agreements (but excluding any Excluded Swap Termination Amount and
any Subordinated Additional Spread) on the Distribution Date immediately
following the Collection Period that commences on the Determination Date; and
(ii) the other expenses payable (or provisioned to be paid) by the Covered
Bond Guarantor on the Distribution Date immediately following the Collection
Period ranking in priority to the amounts described in (i) in accordance with
the relevant Priority of Payments applicable prior to a Covered Bond Guarantor
Event of Default (the Interest Rate Shortfall Test). Any interest rate
shortfall will be referred to as an Interest Rate Shortfall.
If the Servicer determines on any Determination Date that there is an Interest
Rate Shortfall, it will give written notice to the Covered Bond Guarantor and
the Seller (copied to the Trust Manager and the Security Trustee), within five
AU Business Days of the relevant Determination Date, of the amount of the
Interest Rate Shortfall and the fixed interest rate and the variable interest
rate and the other discretionary rates or margins which would, in the
Servicer's opinion, need to be set in order for no Interest Rate Shortfall to
arise on the next succeeding Determination Date, having regard to the date(s)
on which the changes to the fixed interest rate and the variable interest rate
and the other discretionary rates or margins would take effect, following
which: (i) (subject to the Servicing Deed), the Servicer must, to the extent
permitted by the terms of the relevant Loan Agreements and all applicable
laws, set the fixed interest rate and the variable interest rate (as the case
may be) and/or other discretionary rates or margins applicable to Mortgage
Loans which are Assets of the Trust at such levels; and/or (ii) the Trust
Manager may notify the Servicer and the Seller that, having regard to the
obligations of the Covered Bond Guarantor and the amount of the Interest Rate
Shortfall, further Mortgage Loan Rights should be offered by the Seller to the
Covered Bond Guarantor pursuant to the Mortgage Sale Agreement to rectify the
Interest Rate Shortfall, in which case, the Seller will use all reasonable
efforts to offer to sell in accordance with the Mortgage Sale Agreement
sufficient Mortgage Loan Rights to ensure that there will not be an Interest
Rate Shortfall on the next Determination Date.
Yield Shortfall Test
The Servicer will, if at any time following an Issuer Event of Default (and
for so long as such Issuer Event of Default continues unremedied) or the
service of an Asset Coverage Test Breach Notice (which has not been deemed to
be revoked), the Interest Rate Swap is not in effect in accordance with its
terms, determine on each Determination Date, having regard to the aggregate
of:
(a) the fixed interest rate and the variable interest rate (as
the case may be) and any other discretionary rate or margin, in respect of the
Mortgage Loans forming part of the Assets of the Trust which the Servicer
proposes to set under the Servicing Deed for the Collection Period; and
(b) the resources available to the Covered Bond Guarantor under
the Covered Bond Swap Agreements (if any),
whether the Covered Bond Guarantor would receive an aggregate amount of
interest from the Mortgage Loans which are Assets of the Trust and the amounts
under the Swap Agreements during the Collection Period which would give a
weighted average annual yield on the Mortgage Loans which are Assets of the
Trust an amount that is sufficient to enable the Covered Bond Guarantor to
make payments and provisions under paragraphs (a) to (h) (inclusive but
excluding paragraph (c)) of the Guarantee Priority of Payments in full on the
next Distribution Date to occur following the end of the Collection Period in
which such Determination Date falls (the Yield Shortfall Test). Any yield
shortfall will be referred to as a Yield Shortfall.
If the Servicer determines that the Yield Shortfall Test will not be
satisfied, it will give written notice to the Covered Bond Guarantor, the
Trust Manager and the Security Trustee, within five AU Business Days of the
relevant Determination Date, of the amount of the Yield Shortfall and the
fixed interest rate and the variable interest rate and the other discretionary
rates or margins which would, in the Servicer's opinion, need to be set in
order for no Yield Shortfall to arise, and the Yield Shortfall Test to be
satisfied, having regard to the date(s) on which the changes to the fixed
interest rate and the variable interest rate and the other discretionary rates
or margins would take effect, and at all times acting in accordance with the
standards of a prudent lender in the business of making retail home loans. If
the Covered Bond Guarantor or the Security Trustee notifies the Servicer that,
having regard to the obligations of the Covered Bond Guarantor, the fixed
interest rate and the variable interest rate and/or the other discretionary
rates or margins should be increased, the Servicer must take all steps which
are necessary and are in accordance with the standards and practices of a
prudent lender in the business of making retail home loans to increase the
fixed interest rate and the variable interest rate and/or any other
discretionary rates or margins, including giving any notice which is required
in accordance with the Mortgage Documents.
Remuneration
The Covered Bond Guarantor (acting on the directions of the Trust Manager)
will, in accordance with the applicable Priority of Payments, pay an
administration fee to the Servicer for the performance of its obligations
under the Programme Documents, which will be agreed in writing between the
Covered Bond Guarantor (acting on the directions of the Trust Manager), the
Security Trustee and the Servicer from time to time. The Covered Bond
Guarantor (acting on the directions of the Trust Manager) will on each
Distribution Date, subject to the applicable Priority of Payments as further
consideration for the Services supplied to it by the Servicer under the
Servicing Deed reimburse the Servicer for all out-of-pocket costs, expenses
and charges properly incurred by the Servicer in the performance of the
Services, including any such costs, expenses or charges not reimbursed to the
Servicer on any previous Distribution Date.
Collections
The Servicer acts as collecting agent for the Covered Bond Guarantor in
respect of all payments in respect of the Mortgage Loan Rights forming part of
the Assets of the Trust (including, without limitation, a Mortgage Loan
Scheduled Payment). If the Servicer receives, during a Collection Period, any
money whatsoever arising from the Mortgage Loans Rights forming part of the
Assets of the Trust which money belongs to the Covered Bond Guarantor (for
itself or as trustee of the BOQ Trust) and such money is to be paid to the GIC
Account pursuant to the Servicing Deed, the Servicer will hold such money on
trust for the Covered Bond Guarantor and will ensure that all such moneys are
capable of being readily identified at any time. All such amounts described
above received by the Servicer during a Collection Period must be credited to
the GIC Account either no later than one Local Business Day before the
Distribution Date immediately following the end of that Collection Period (for
so long as the Servicer has a short-term deposit rating of at least P-1 from
Moody's and either a short-term credit rating of at least F1 from Fitch or a
long term credit rating of at least A from Fitch) or, in any other case,
within two AU Business Days of receipt.
The Servicer must, if it credits money received during a Collection Period to
the GIC Account in accordance with the Servicing Deed, on the Distribution
Date immediately following the end of that Collection Period, credit an
additional amount to the GIC Account calculated as interest on the amount of
that money for the period during which it was held by the Servicer. Any such
interest is to be calculated on the Determination Date immediately following
the end of the Collection Period by the Servicer in its absolute discretion on
the daily balance of the amount of money for the period during which it was
(or will be) held by the Servicer and at a rate of interest, for each
Collection Period (or part thereof) during which the money is (or will be)
held, equal to the applicable 30 day Bank Bill Rate on the first day of the
Collection Period, or if that day is not a AU Business Day, on the immediately
preceding AU Business Day.
Removal or resignation of the Servicer
A servicer default (Servicer Default) occurs if:
(a) the Servicer fails to remit any amounts due or any other
amounts received in respect of the Mortgage Loan Rights then forming part of
the Assets of the Trust to the Covered Bond Guarantor within the time periods
specified in the Servicing Deed or the other Programme Document and such
failure is not remedied within 10 AU Business Days (or such longer period as
the Covered Bond Guarantor and the Trust Manager may agree to) of notice of
such failure being given to the Servicer by the Trust Manager or the Covered
Bond Guarantor;
(b) the Servicer fails to prepare and transmit to the Trust
Manager the information necessary to enable the Trust Manager to prepare a
Reporting Statement by its due date and such failure is not remedied within 20
AU Business Days (or such longer period as the Covered Bond Guarantor and the
Trust Manager may agree to) of notice being given to the Servicer by the Trust
Manager or the Covered Bond Guarantor and such failure, as determined by the
Security Trustee, acting on the directions of the Bond Trustee (subject to the
provisions of the Bond Trust Deed) if there are Covered Bonds outstanding, is
materially prejudicial to the Covered Bondholders or acting on the directions
of the Majority Secured Creditors (if there are no Covered Bonds outstanding),
is materially prejudicial to the Secured Creditors;
(c) an Insolvency Event occurs in relation to the Servicer;
(d) the Servicer has breached its obligations (other than those
referred to in paragraphs (a) and (b) above), as Servicer under a Programme
Document to which it is expressed to be a party and such breach in the opinion
of the Security Trustee, acting on the directions of the Bond Trustee (subject
to the provisions of the Bond Trust Deed) if there are Covered Bonds
outstanding, is materially prejudicial to the Covered Bondholders or acting on
the directions of the Majority Secured Creditors (if there are no Covered
Bonds outstanding), is materially prejudicial to the Secured Creditors and:
(i) that breach is not remedied to the Security Trustee's
satisfaction within 20 AU Business Days after receipt by the Servicer of a
notice in writing from the Trust Manager, the Covered Bond Guarantor or the
Security Trustee requiring it to do so; or
(ii) the Servicer has not paid compensation to the Covered Bond
Guarantor for its loss from such breach in an amount satisfactory to the Trust
Manager (acting reasonably); or
(e) the Servicer's:
(i) counterparty risk assessment from Moody's is below
Baa3(cr) or, if the Servicer does not have a counterparty risk assessment from
Moody's, its unsecured, unsubordinated, long-term senior debt obligations have
been downgraded below Baa3 by Moody's; or
(ii) unsecured, unsubordinated, long-term senior debt
obligations have been downgraded below BBB- by Fitch.
If the Trust Manager has determined that:
(a) the performance by the Servicer of its duties under the
Servicing Deed is no longer permissible under any applicable law and the Trust
Manager is satisfied that there is no reasonable action which the Servicer
could take to make the performance of its duties under the Servicing Deed
permissible under that applicable law; or
(b) a Servicer Default has occurred and is continuing,
then the Trust Manager must by written notice to the Servicer, immediately
terminate the rights and obligations of the Servicer and appoint another
appropriately qualified organisation to act in its place.
The Servicer will, within two AU Business Days after it becomes aware of any
Servicer Default, give notice to the Covered Bond Guarantor, the Trust Manager
and the Rating Agencies (and the Trust Manager must give notice to the
Security Trustee and the Bond Trustee).
The Servicer may retire from its obligations and duties assumed by it pursuant
to the Servicing Deed by three months' notice in writing to the Security
Trustee, the Covered Bond Guarantor and the Trust Manager (or such lesser time
as the Servicer, the Trust Manager and the Covered Bond Guarantor agree). Upon
its retirement the Servicer may, subject to any approval required by law,
appoint in writing another person approved by the Covered Bond Guarantor
(acting reasonably) as Substitute Servicer in its place. If the Servicer does
not propose a replacement by the date which is one month prior to the date of
its proposed retirement, the Covered Bond Guarantor is entitled to appoint a
Substitute Servicer as of the date of the proposed retirement. The Trust
Manager will give or cause to be given prompt notice of the appointment of any
Substitute Servicer in accordance with the Servicing Deed to each Rating
Agency.
The purported appointment of a Substitute Servicer in the event of the
termination or resignation of the Servicer has no effect until the Substitute
Servicer executes an agreement under which it covenants to act as Servicer in
accordance with the Servicing Deed and all other Programme Documents to which
the Servicer is a party and the Issuer issues a Rating Affirmation Notice in
relation to each Rating Agency in respect of the proposed appointment of the
Substitute Servicer. Until the appointment of the Substitute Servicer is
complete the Covered Bond Guarantor must act as Servicer, provided that the
Trust Manager and the Covered Bond Guarantor (acting reasonably) have agreed a
fee in writing to be paid to the Covered Bond Guarantor for the period during
which the Covered Bond Guarantor is required to so act (and is entitled to
receive a fee agreed by the Trust Manager and the Covered Bond Guarantor for
the period during which the Covered Bond Guarantor so acts). While acting as
Servicer, the Covered Bond Guarantor will not be liable for any inability to
perform or deficiency in performing its obligations as a result of, amongst
other things, a breach by the outgoing Servicer of its obligations, the state
of affairs, books and records of the outgoing Servicer and any documents or
files delivered by it (including, the inaccuracy or incompleteness thereof) or
the inability of the Covered Bond Guarantor to obtain access to information,
premises or equipment reasonably necessary for it to perform its obligations.
The Trust Manager must give or cause to be given prompt notice of the
appointment of the Substitute Servicer to each Rating Agency.
Neither the Security Trustee, the Covered Bond Guarantor nor the Trust Manager
or their respective delegates (as the case may be) is liable for any Servicer
Default except to the extent that the Servicer Default is caused by the
Security Trustee's, the Covered Bond Guarantor's or the Trust Manager's or
their respective delegate's (as the case may be) fraud, negligence or wilful
default.
The Covered Bond Guarantor may settle with the Servicer the amount of any sums
payable by the Servicer to the Covered Bond Guarantor or by the Covered Bond
Guarantor to the Servicer and may give to or accept from the Servicer a
discharge in respect of those sums which will be conclusive and binding as
between the Covered Bond Guarantor and the Servicer and as between the
Servicer and each other Secured Creditor. The Servicer and the Trust Manager
have agreed to provide their full co-operation in the event of the appointment
of a Substitute Servicer. The Servicer and the Trust Manager must (subject to
the Privacy Act and the Servicer's duty of confidentiality to its customers
under general law or otherwise) provide the Substitute Servicer with copies of
all paper and electronic files, information and other materials in its
possession (or in the possession or control of its attorney, delegate, agent
or sub-agent) as the Covered Bond Guarantor or the Substitute Servicer may
reasonably request within 90 days of the removal or retirement of the Servicer
in accordance with the Servicing Deed.
The Security Trustee will not assume or have any of the obligations or
liabilities of the Servicer, the Seller or the Covered Bond Guarantor.
The Servicing Deed is governed by, and construed in accordance with, the laws
applying in the State of New South Wales, Australia.
Cover Pool Monitor Agreement
Under the terms of the Cover Pool Monitor Agreement dated on or about the
Programme Date between the Cover Pool Monitor, the Covered Bond Guarantor, BOQ
(in its capacity as Issuer and Seller), the Trust Manager, the Bond Trustee
and the Security Trustee, the Cover Pool Monitor has agreed, subject to the
receipt of certain information to be provided by the Trust Manager to the
Cover Pool Monitor, to report on the arithmetic accuracy of certain
calculations performed by the Trust Manager on the Determination Date
immediately preceding each half-yearly and yearly anniversary of the Programme
Date, for the purposes of determining compliance or non-compliance by the
Covered Bond Guarantor with the Legislated Collateralisation Test and the
Asset Coverage Test or the Amortisation Test, as applicable, on that
Determination Date. In the case of the Asset Coverage Test and the
Amortisation Test, the relevant procedures to be performed by the Cover Pool
Monitor depends on whether the Determination Date falls prior to or after a
Notice to Pay is served on the Covered Bond Guarantor. The Cover Pool
Monitor is only required to perform procedures relating to the Legislated
Collateralisation Test, the Asset Coverage Test and/or the Amortisation Test
if, on the relevant Determination Date, there are any Covered Bonds
outstanding.
The Cover Pool Monitor has also agreed, subject to due receipt of the
information to be provided by the Trust Manager to the Cover Pool Monitor, as
soon as reasonably practicable following each Determination Date immediately
preceding each half-yearly and yearly anniversary of the Programme Date (each,
a Reporting Date) to examine the records of the Assets of the Trust kept by
the Trust Manager in accordance with the terms of the Establishment Deed to:
(a) assess whether the Trust Manager is keeping an accurate
register of the Assets of the Trust; and
(b) check whether:
(i) the Assets of the Trust are assets of a kind specified in
section 31(1) of the Australian Banking Act;
(ii) the Assets of the Trust are not assets prescribed by
regulation for the purposes of section 31(3) of the Australian Banking Act;
and
(iii) the aggregate amount of Substitution Assets or any
particular class of Substitution Assets does not exceed the limits set out in
the Establishment Deed.
The Cover Pool Monitor must carry out the procedures and examinations above
with a view to providing a report in accordance with the Cover Pool Monitor
Agreement.
If:
(a) the counterparty risk assessment of the Issuer falls below
Baa3(cr) from Moody's or, if the Issuer does not have a counterparty risk
assessment from Moody's, the long-term unsecured, unguaranteed and
unsubordinated debt obligation credit rating of the Issuer falls below Baa3 by
Moody's; or
(b) the long-term unsecured, unguaranteed and unsubordinated
debt obligation credit rating of the Issuer falls below BBB- by Fitch,
and, in each case, for as long as they remain below such counterparty risk
assessment and/or credit ratings, as applicable, the Trust Manager must give
written notice of that fact to the Cover Pool Monitor and, following receipt
of that notice, and subject to the execution of an engagement letter of the
Cover Pool Monitor, the Cover Pool Monitor will, subject to receipt of the
relevant information from the Trust Manager, be required to perform such
procedures in relation to the arithmetic accuracy of the relevant tests
referred to above (other than the Legislated Collateralisation Test) as soon
as reasonably practicable (and in any event not later than ten AU Business
Days following receipt of the relevant information from the Trust Manager)
following every Determination Date after any such downgrade.
If any procedure conducted by the Cover Pool Monitor as described above
reveals arithmetic errors in the relevant calculations performed by the Trust
Manager such that:
(c) the Asset Coverage Test or the Amortisation Test was not
satisfied on the relevant Determination Date (where the Trust Manager had
recorded it as being satisfied); or
(d) the reported Adjusted Aggregate Mortgage Loan Amount or the
reported Amortisation Test Aggregate Mortgage Loan Amount, as applicable, was
misstated by the Trust Manager by an amount exceeding 1 per cent. of the
actual Adjusted Aggregate Mortgage Loan Amount or the actual Amortisation Test
Aggregate Mortgage Loan Amount, as applicable, (as at the date of the relevant
Asset Coverage Test or the relevant Amortisation Test),
the Cover Pool Monitor will perform procedures in relation to such tests in
respect of every Determination Date occurring during the period ending six
months after the date of the Asset Coverage Test and/or the Amortisation Test
which included the relevant arithmetic errors.
The Cover Pool Monitor will be entitled, in the absence of manifest error, to
assume that all information provided to it by the Trust Manager for the
purpose of reporting on the arithmetic accuracy is true and correct and is
complete and not misleading, and is not required to conduct an audit, a review
or other similar examination in respect of or otherwise take steps to verify
the accuracy or completeness of any such information. The Cover Pool Monitor
Report, together with the reports prepared in respect of the records of the
Assets of the Trust kept by the Trust Manager, will be delivered to the
Issuer, Seller, Trust Manager, the Covered Bond Guarantor, the Bond Trustee
and the Security Trustee.
The Covered Bond Guarantor will pay to the Cover Pool Monitor for the
performance of its obligations a fee as agreed with the Issuer.
Pursuant to the Cover Pool Monitor Agreement, the Cover Pool Monitor has
undertaken to:
(a) exercise reasonable skill and care in the performance of its
obligations under the Cover Pool Monitor Agreement;
(b) to the extent permitted by law, comply with all material
legal and regulatory requirements applicable to the conduct of its business so
that it can lawfully attend to the performance of its obligations under the
Cover Pool Monitor Agreement; and
(c) at all times:
(i) be registered as an auditor under Part 9.2 of the
Corporations Act; or
(ii) hold an Australian financial services licence (as defined
in the Corporations Act) which licence extends to the provision of financial
services as Cover Pool Monitor; or
(iii) be exempt from holding an Australian financial services
licence (as defined in the Corporations Act) which exemption extends to the
provision of financial services as Cover Pool Monitor.
The Trust Manager may:
(a) at any time, but only with the prior written consent of the
Security Trustee, direct the Covered Bond Guarantor to terminate the
appointment of the Cover Pool Monitor by giving at least 60 days' prior
written notice to the Cover Pool Monitor; or
(b) at any time direct the Covered Bond Guarantor to terminate
the appointment of the Cover Pool Monitor, if the Cover Pool Monitor is unable
to comply with the requirements set out in sections 30(2) and 30(3) of the
Australian Banking Act,
provided that such termination will (for the purposes of (a) above) and may,
at the discretion of the Trust Manager (for the purposes of (b) above), not be
effective unless and until a replacement has been found by the Trust Manager.
The Cover Pool Monitor may, at any time, resign by giving at least 60 days'
prior written notice to the Issuer, the Covered Bond Guarantor, the Trust
Manager, the Bond Trustee, and the Security Trustee.
Upon giving notice of termination or receiving notice of resignation, the
Trust Manager will use its best endeavours to arrange for the Covered Bond
Guarantor to promptly appoint a substitute cover pool monitor pursuant to an
agreement on substantially the same terms as the terms of the Cover Pool
Monitor Agreement, to provide the services set out in the Cover Pool Monitor
Agreement. If a substitute cover pool monitor is not appointed by the date
which is 30 days prior to a date when procedures are to be carried out in
accordance with the terms of the Cover Pool Monitor Agreement, then the Trust
Manager will use all reasonable endeavours to arrange for the Covered Bond
Guarantor to appoint an accountancy firm or trustee company of national
standing in Australia or a firm recognised as having expertise in managing
assets on behalf of investors to carry out the relevant procedures on a
one-off basis. The Trust Manager will promptly notify the Rating Agencies of
the appointment of any substitute cover pool monitor, or any accountancy or
other firm or trustee company to carry out the relevant procedures.
The Cover Pool Monitor will not be liable in respect of any loss, liability,
claim, expense or damage suffered or incurred by the Covered Bond Guarantor,
the Security Trustee and/or any other person as a result of a breach by any of
the other parties to the Cover Pool Monitor Agreement of any provision of the
Cover Pool Monitor Agreement, save to the extent that such loss, liability,
claim, expense or damage is suffered or incurred as a result of any
negligence, fraud, or wilful default of the Cover Pool Monitor or as a result
of a breach by the Cover Pool Monitor of the terms and provisions of the Cover
Pool Monitor Agreement or any other Programme Document to which the Cover Pool
Monitor is a party (in its capacity as such). The liability of the Cover
Pool Monitor is limited by a scheme approved under professional standards,
except where the Cover Pool Monitor is a financial services licensee. If the
Cover Pool Monitor's liability is not limited pursuant to the scheme, the
liability of the Cover Pool Monitor for any loss, liability, claim, expense or
damage suffered or incurred by any of the other parties caused by breach of
any provision of the Cover Pool Monitor Agreement, tort (including
negligence), breach of fiduciary duty or other actionable wrong of any kind
will be limited to ten times the fees paid for the report the subject of the
loss, liability, claim, expense or damage.
None of the Covered Bond Guarantor, the Bond Trustee nor the Security Trustee
are obliged to act as Cover Pool Monitor or to monitor or supervise the
performance of the Cover Pool Monitor in any circumstances.
The Cover Pool Monitor Agreement is, and is construed in accordance with, the
laws applying in the State of New South Wales, Australia.
Establishment Deed
The Establishment Deed, made between the Covered Bond Guarantor, the Security
Trustee, the Trust Manager and BOQ (in its capacity as Issuer, Seller and
Servicer) establishes the BOQ Covered Bond Trust and provides that the Covered
Bond Guarantor will be the trustee of the Trust. Pursuant to the
Establishment Deed, the Trust is established for purposes relating only to
Covered Bonds including (without limitation) the acquisition, management and
sale of, amongst other things, Mortgage Loan Rights; the borrowing of moneys
to fund the acquisition of such assets; the hedging of risks associated with
such assets and such funding; the acquisition, management and sale of
Substitution Assets and Authorised Investments; the giving of guarantees; the
granting of security; and any purpose which is ancillary or incidental to any
of those purposes listed above.
Unitholders
The beneficial interest in the Assets of the Trust is vested in the Income
Unitholder as holder of one Income Unit and the Capital Unitholder as holder
of ten Capital Units. Pursuant to the Establishment Deed, the Income
Unitholder is entitled to distributions of the net income, if any, of the
Trust for each financial year. The Capital Unitholder's interest in the
Trust comprises an interest in its proportion of any Assets of the Trust
remaining after payment of any amount of net income due to the Income
Unitholder in satisfaction of the Income Unitholder's entitlement to the net
income of the Trust.
The right of any Unitholder to recover any amounts in respect of its interests
described above is limited to the Assets of the Trust available for
distribution after payments or distributions have been made to all other
parties under the applicable Priorities of Payments.
Asset Coverage Test
Under the terms of the Establishment Deed, the Trust Manager must ensure that
for so long as Covered Bonds remain outstanding on each Determination Date
prior to the service of a Notice to Pay on the Covered Bond Guarantor and/or a
Covered Bond Guarantee Acceleration Notice on the Covered Bond Guarantor and
the Issuer, the Adjusted Aggregate Mortgage Loan Amount (as at the last day of
the immediately preceding Collection Period) is at least equal to the
Australian Dollar Equivalent of the aggregate Principal Amount Outstanding (as
at the last day of the immediately preceding Collection Period) of the Covered
Bonds as calculated on the relevant Determination Date (the Asset Coverage
Test). The Trust Manager will perform all calculations required on each
Determination Date, and any other date on which the Asset Coverage Test is
required to be calculated, to determine whether the Mortgage Loans forming
part of the Assets of the Trust are in compliance with the Asset Coverage
Test.
If on any Determination Date (the First Determination Date) prior to the
service of a Notice to Pay on the Covered Bond Guarantor and/or a Covered Bond
Guarantee Acceleration Notice on the Covered Bond Guarantor and the Issuer the
Asset Coverage Test as calculated on the First Determination Date is not
satisfied, then the Trust Manager must immediately notify the Covered Bond
Guarantor, the Bond Trustee and the Security Trustee in writing and the Trust
Manager will undertake to use all reasonable endeavours to arrange for the
Covered Bond Guarantor to acquire sufficient additional Mortgage Loan Rights
from the Seller in accordance with the Mortgage Sale Agreement (see "Overview
of the Principal Documents - Mortgage Sale Agreement - Sale by the Seller of
Mortgage Loan Rights"), and must direct the Covered Bond Guarantor to purchase
Substitution Assets or request subscriptions from the Demand Note Subscriber
for an Increase in the Demand Note to ensure that the Asset Coverage Test is
satisfied on any date on or before the immediately following Determination
Date (the Second Determination Date) (by reference to the Adjusted Aggregate
Mortgage Loan Amount, as at the last day of the immediately preceding
Collection Period, and the Australian Dollar Equivalent of the aggregate
Principal Amount Outstanding, as at the last day of the immediately preceding
Collection Period, of all Covered Bonds, in each case as calculated on such
date). If the Asset Coverage Test remains unsatisfied on the Second
Determination Date, the Trust Manager must immediately notify the Covered Bond
Guarantor, the Bond Trustee and the Security Trustee in writing and the Bond
Trustee must serve an Asset Coverage Test Breach Notice on the Covered Bond
Guarantor (subject to the Bond Trustee having actual knowledge or express
notice of the non-satisfaction of the Asset Coverage Test). The Bond Trustee
will be deemed to have revoked an Asset Coverage Test Breach Notice if, on any
Determination Date falling on or prior to the third consecutive Determination
Date, the Asset Coverage Test is subsequently satisfied and neither a Notice
to Pay nor a Covered Bond Guarantee Acceleration Notice has been served. If
the Bond Trustee is deemed to have revoked an Asset Coverage Test Breach
Notice, the Trust Manager must immediately notify (in writing) the Bond
Trustee of such revocation.
Following service of an Asset Coverage Test Breach Notice (which has not been
revoked):
(a) the Covered Bond Guarantor may be required to sell Selected
Mortgage Loan Rights (as further described under "Sale of Selected Mortgage
Loan Rights following service of an Asset Coverage Test Breach Notice" below);
(b) prior to the occurrence of an Issuer Event of Default and
service of an Issuer Acceleration Notice or, if earlier, the occurrence of a
Covered Bond Guarantor Event of Default and service of a Covered Bond
Guarantee Acceleration Notice, the Pre-Issuer Event of Default Priorities of
Payments will be modified as described in "Cashflows - Allocation and
distribution of the Available Income Amount and the Available Principal Amount
following service of an Asset Coverage Test Breach Notice" below; and
(c) the Issuer will not be permitted to issue any further
Covered Bonds.
If an Asset Coverage Test Breach Notice has not been revoked as described
above, then the Asset Coverage Test will be breached and an Issuer Event of
Default will occur on the next following Determination Date after the service
of such Asset Coverage Test Breach Notice and the Trust Manager must
immediately give written notice of that occurrence to the Covered Bond
Guarantor, the Bond Trustee and the Security Trustee.
For the purposes hereof:
Adjusted Aggregate Mortgage Loan Amount means the amount calculated on each
Determination Date as follows:
(A + B + C + D) - Z,
where:
A = the lower of:
(a) the aggregate of the LVR Adjusted Mortgage Loan Balance
Amounts of the Mortgage Loans forming part of the Assets of the Trust as at
the last day of the immediately preceding Collection Period; and
(b) the aggregate of the Asset Percentage Adjusted Mortgage Loan
Balance Amounts of the Mortgage Loans forming part of the Assets of the Trust
as at the last day of the immediately preceding Collection Period,
(in each case, for the avoidance of doubt, excluding any Mortgage Loans being
repurchased by the Seller on the last day of the immediately preceding
Collection Period but including any Mortgage Loans being purchased by the
Covered Bond Guarantor on the last day of the immediately preceding Collection
Period).
The LVR Adjusted Mortgage Loan Balance Amount will be calculated for a
Mortgage Loan, on the relevant Determination Date, as:
(i) for each Mortgage Loan forming part of the Assets of the
Trust, as at the last day of the immediately preceding Collection Period, that
is not then a Defaulted Mortgage Loan, as at the last day of the immediately
preceding Collection Period, the lesser of:
(A) the outstanding Current Principal Balance of the Mortgage Loan
as at the last day of the immediately preceding Collection Period; and
(B) the product of M and L where:
(I) M is 80 per cent.; and
(II) L is the Indexed Valuation for the Mortgaged Property which
secures the Mortgage Loan as at the last day of the immediately preceding
Collection Period (but without double counting across Mortgage Loans); and
(ii) for each Mortgage Loan forming part of the Assets of the
Trust, as at the last day of the immediately preceding Collection Period, that
is, as at the last day of the immediately preceding Collection Period, a
Defaulted Mortgage Loan, zero;
less:
(iii) where a Mortgage Loan or the Collateral Security in respect
of which the Seller was, in the immediately preceding Collection Period, known
by the Covered Bond Guarantor or the Trust Manager to be in breach of the
Representations and Warranties contained in the Mortgage Sale Agreement as at
the date of its sale to the Covered Bond Guarantor and the Seller has not, as
at the last day of the immediately preceding Collection Period, repurchased
the Mortgage Loan and the Collateral Security to the extent required by the
terms of the Mortgage Sale Agreement, an amount equal to the LVR Adjusted
Mortgage Loan Balance Amount (as calculated pursuant to paragraphs (i) and
(ii) above) for each Mortgage Loan to which this paragraph (iii) applies; and
(iv) where the Seller, in any preceding Collection Period, was in
material breach of any other warranty under the Mortgage Sale Agreement and/or
the Servicer was, in any preceding Collection Period, in material breach of a
term of the Servicing Deed, an amount equal to the resulting financial loss
incurred by the Covered Bond Guarantor in the immediately preceding Collection
Period (such financial loss to be calculated by the Trust Manager without
double counting and to be reduced by any amount paid (in cash or in kind) to
the Covered Bond Guarantor by the Seller or by the Servicer (as applicable) to
indemnify the Covered Bond Guarantor for such financial loss).
The Asset Percentage Adjusted Mortgage Loan Balance Amount will be calculated
for a Mortgage Loan, on the relevant Determination Date, as the Asset
Percentage multiplied by:
(i) for each Mortgage Loan forming part of the Assets of the
Trust, as at the last day of the immediately preceding Collection Period, that
is not, as at the last day of the immediately preceding Collection Period, a
Defaulted Mortgage Loan, the lesser of:
(A) the outstanding Current Principal Balance of the Mortgage Loan
as at the last day of the immediately preceding Collection Period; and
(B) the product of M and L, where:
(I) M is 100 per cent.; and
(II) L is the Latest Valuation for the Mortgaged Property which
secures the Mortgage Loan as at the last day of the immediately preceding
Collection Period (but without double counting across Mortgage Loans); and
(ii) for each Mortgage Loan forming part of the Assets of the
Trust, as at the last day of the immediately preceding Collection Period, that
is, as at the last day of the immediately preceding Collection Period, a
Defaulted Mortgage Loan, zero;
less:
(iii) where a Mortgage Loan or the Collateral Security in respect
of which the Seller was, in the immediately preceding Collection Period, known
by the Covered Bond Guarantor or the Trust Manager to be in breach of the
Representations and Warranties contained in the Mortgage Sale Agreement as at
the date of its sale to the Covered Bond Guarantor and the Seller has not, as
at the last day of the immediately preceding Collection Period, repurchased
the Mortgage Loan and the Collateral Security to the extent required by the
terms of the Mortgage Sale Agreement, an amount equal to the Asset Percentage
Adjusted Mortgage Loan Balance Amount (as calculated pursuant to paragraphs
(i) and (ii) on the relevant Determination Date) for each Mortgage Loan to
which this paragraph (iii) applies; and
(iv) where the Seller, in any preceding Collection Period, was in
material breach of any other warranty under the Mortgage Sale Agreement and/or
the Servicer was, in any preceding Collection Period, in material breach of a
term of the Servicing Deed, an amount equal to the resulting financial loss
incurred by the Covered Bond Guarantor in the immediately preceding Collection
Period (such financial loss to be calculated by the Trust Manager without
double counting and to be reduced by any amount paid (in cash or in kind) to
the Covered Bond Guarantor by the Seller or by the Servicer (as applicable) to
indemnify the Covered Bond Guarantor for such financial loss);
B = the aggregate amount of any proceeds of each issue of any Intercompany
Notes and/or any Increase in the Demand Note which have not been applied as
contemplated in the Programme Documents as at the last day of the immediately
preceding Collection Period;
C = the aggregate principal balance of any Substitution Assets and Authorised
Investments as at the last day of the immediately preceding Collection Period;
D = the aggregate amount of Principal Collections standing to the credit of
the GIC Account as at the last day of the immediately preceding Collection
Period (without double counting any amounts already covered in B above) but
excluding any amounts due to be applied on or before the next Distribution
Date in accordance with the applicable Priority of Payments;
Z = the product of:
(i) the weighted average remaining maturity of all Covered
Bonds (expressed in years) outstanding, as at last day of the immediately
preceding Collection Period, calculated by the Trust Manager as at the
relevant Determination Date (provided that if such amount is less than one, it
will be deemed for the purposes of this calculation, to be one);
(ii) the Australian Dollar Equivalent of the then aggregate
Principal Amount Outstanding, as at last day of the immediately preceding
Collection Period, of the Covered Bonds; and
(iii) the then Negative Carry Factor, where the Negative Carry
Factor is:
(A) zero, for so long as the Interest Rate Swaps are in effect in
accordance with their terms; or
(B) if the Interest Rate Swaps are not in effect in accordance
with their terms, the percentage rate per annum equal to the sum of:
(I) 0.50 per cent.; and
(II) the Weighted Average Spread of each Series of Covered Bonds
outstanding, as at last day of the immediately preceding Collection Period,
determined by reference to the Australian Dollar Equivalent of the aggregate
Principal Amount Outstanding, as at last day of the immediately preceding
Collection Period, of the applicable Series of Covered Bonds,
where:
(III) the Spread is (I) in the case of a Series of floating rate
Covered Bonds the Specified Currency of which is Australian Dollars and in
respect of which there is no Covered Bond Swap in place, the margin for the
Series specified in the Applicable Final Terms (or, in the case of Exempt
Covered Bonds, the Applicable Pricing Supplement); and (II) in any other case
the spread used to calculate the floating amounts denominated in Australian
Dollars payable by the Covered Bond Guarantor in accordance with the
applicable Covered Bond Swap; and
(IV) the Weighted Average Spread is the weighted average Spread (as
determined under (III) above) then payable on each Series of Covered Bonds
(determined by reference to the Australian Dollar Equivalent of the aggregate
Principal Amount Outstanding, as at the last day of the immediately preceding
Collection Period, of the applicable Series).
There is no obligation on the Covered Bond Guarantor or the Issuer to ensure
that a AAA rating is maintained by Fitch or an Aaa rating is maintained by
Moody's in respect of the Covered Bonds and the Trust Manager is under no
obligation to change the percentage figure determined by it and notified to
Fitch or Moody's, as applicable, and Covered Bond Guarantor and the Security
Trustee in line with the level of credit enhancement required to ensure a AAA
rating by Fitch or an Aaa rating by Moody's.
Amortisation Test
The Trust Manager must ensure that, for so long as Covered Bonds are
outstanding, on each Determination Date following service of a Notice to Pay
on the Covered Bond Guarantor (but prior to service of a Covered Bond
Guarantee Acceleration Notice on the Covered Bond Guarantor and the Issuer)
the Amortisation Test Aggregate Mortgage Loan Amount will be in an amount at
least equal to the Australian Dollar Equivalent of the aggregate Principal
Amount Outstanding (as at the last day of the immediately preceding Collection
Period) of the Covered Bonds as calculated on the relevant Determination Date
(the Amortisation Test). The Trust Manager will perform all calculations
required on each Determination Date, and any other date on which the
Amortisation Test is required to be calculated, to determine whether the
Mortgage Loans forming part of the Assets of the Trust (as at the last day of
the immediately preceding Collection Period) are in compliance with the
Amortisation Test.
If on any Determination Date following service of a Notice to Pay on the
Covered Bond Guarantor (but prior to the service of a Covered Bond Guarantee
Acceleration Notice on the Covered Bond Guarantor and the Issuer), the
Amortisation Test Aggregate Mortgage Loan Amount is less than the Australian
Dollar Equivalent of the aggregate Principal Amount Outstanding (as at the
last day of the immediately preceding Collection Period) of the Covered Bonds
as calculated on the relevant Determination Date, then the Amortisation Test
will be breached. The Trust Manager must immediately notify the Covered Bond
Guarantor, the Security Trustee and (for so long as Covered Bonds are
outstanding) the Bond Trustee of any breach of the Amortisation Test and the
Bond Trustee must serve a notice on the Issuer and the Covered Bond Guarantor
advising that the Amortisation Test has been breached (such notice, an
Amortisation Test Breach Notice). Immediately upon the service of such
Amortisation Test Breach Notice, a Conversion of all Series of Covered Bonds
to Pass-Through Covered Bonds will occur.
The Amortisation Test Aggregate Mortgage Loan Amount will be calculated by the
Trust Manager on each relevant Determination Date as follows:
A + B + C - Z
where:
A = the lower of:
(i) the aggregate of the Amortisation Test Current Principal
Balance of each Mortgage Loan forming part of the Assets of the Trust as at
the last day of the immediately preceding Collection Period; and
(ii) the aggregate of the Programme Asset Percentage Adjusted
Principal Balance of each Mortgage Loan forming part of the Assets of the
Trust as at the last day of the immediately preceding Collection Period.
The Amortisation Test Current Principal Balance will be calculated for a
Mortgage Loan, on the relevant Determination Date, as the product of L and M,
where:
(a) L is the lesser of:
(i) the outstanding Current Principal Balance of the Mortgage
Loan as calculated on the last day of the immediately preceding Collection
Period; and
(ii) 80 per cent. of the Indexed Valuation for the Mortgaged
Property charged by a Mortgage which secures the Mortgage Loan as at the last
day of the immediately preceding Collection Period (but without double
counting across Mortgage Loans); and
(b) M is:
(i) for each Mortgage Loan that is not a Defaulted Mortgage
Loan as at the last day of the immediately preceding Collection Period, M =
1.0; or
(ii) for each Mortgage Loan that is then a Defaulted Mortgage
Loan as at the last day of the immediately preceding Collection Period, M =
zero.
The Programme Asset Percentage Adjusted Principal Balance will be calculated
for a Mortgage Loan, on the relevant Determination Date, as the Programme
Asset Percentage, multiplied by:
(a) for each Mortgage Loan forming part of the Assets of the
Trust, as at the last day of the immediately preceding Collection Period, that
is not, as at the last day of the immediately preceding Collection Period, a
Defaulted Mortgage Loan, the outstanding Current Principal Balance of the
Mortgage Loan as calculated on the last day of the immediately preceding
Collection Period; and
(b) for each Mortgage Loan forming part of the Assets of the
Trust, as at the last day of the immediately preceding Collection Period, that
is, as at the last day of the immediately preceding Collection Period, a
Defaulted Mortgage Loan, zero;
B = the sum of the amount of any cash standing to the credit of the
GIC Account, as at the last day of the immediately preceding Collection
Period, and the principal amount of any Authorised Investments as at the last
day of the immediately preceding Collection Period, (excluding any Finance
Charge Collections received in the immediately preceding Collection Period and
any principal amounts due to be applied on or before the next Distribution
Date in accordance with the applicable Priority of Payments);
C = the aggregate principal balance of any Substitution Assets as at
the last day of the immediately preceding Collection Period not taken into
account elsewhere in this calculation;
Z = the product of:
(a) the weighted average remaining maturity of all Covered Bonds
outstanding as at the last day of the immediately preceding Collection Period
(expressed in years) (but if less than 1, then deemed to be 1);
(b) the Australian Dollar Equivalent of the aggregate Principal
Amount Outstanding, as at the last day of the immediately preceding Collection
Period, of the Covered Bonds; and
(c) the Negative Carry Factor.
Sale of Selected Mortgage Loan Rights following service of an Asset Coverage
Test Breach Notice
Following the service of an Asset Coverage Test Breach Notice (which has not
been deemed to be revoked) but prior to the service of a Notice to Pay, the
Trust Manager must direct the Covered Bond Guarantor to, and upon receiving
that direction the Covered Bond Guarantor must, use best efforts to sell
Selected Mortgage Loan Rights forming part of the Assets of the Trust as soon
as possible following the service of such Asset Coverage Test Breach Notice in
accordance with the Establishment Deed (as described below), subject to the
rights of repurchase enjoyed by the Seller pursuant to the Mortgage Sale
Agreement (as described in "Overview of the Principal Documents - Mortgage
Sale Agreement - Seller's right of repurchase in respect of Selected Mortgage
Loan Rights"). The proceeds from any such sale will be credited to the GIC
Account and applied as set out in "Cashflows - Allocation and distribution of
the Available Income and the Available Principal Amount following service of
an Asset Coverage Test Breach Notice".
Sale of Selected Mortgage Loan Rights following service of a Notice to Pay
Following an Issuer Event of Default and service of a Notice to Pay on the
Covered Bond Guarantor but prior to the service of a Covered Bond Guarantee
Acceleration Notice on the Covered Bond Guarantor and the Issuer, upon the
date of the Conversion of a Series of Covered Bonds(such date, the First
Refinance Date), the Trust Manager must direct the Covered Bond Guarantor to,
and upon receiving that direction the Covered Bond Guarantor must, use best
efforts to sell Selected Mortgage Loan Rights forming part of the Assets of
the Trust as soon as possible following the First Refinance Date in accordance
with the Establishment Deed (as described below), subject to the rights of
repurchase enjoyed by the Seller pursuant to the Mortgage Sale Agreement (as
described in "Overview of the Principal Documents - Mortgage Sale Agreement -
Seller's right of repurchase in respect of Selected Mortgage Loan Rights").
The proceeds from any such sale will be credited to the GIC Account and
applied as set out in the Guarantee Priority of Payments.
Method of Sale of Selected Mortgage Loan Rights
If the Covered Bond Guarantor is required to use best efforts to sell Selected
Mortgage Loan Rights forming part of the Assets of the Trust to Purchasers
following the service of an Asset Coverage Test Breach Notice or the
occurrence of an Issuer Event of Default and service of a Notice to Pay on the
Covered Bond Guarantor, the Trust Manager must ensure that before offering
Selected Mortgage Loan Rights forming part of the Assets of the Trust for
sale:
(a) the Selected Mortgage Loan Rights are selected on a basis
that is representative of the Mortgage Loan Rights then forming part of the
Assets of the Trust; and
(b) the Mortgage Loans relating to the Selected Mortgage Loan
Rights have an aggregate Current Principal Balance in an amount (the Required
Current Principal Balance Amount) which is as close as possible to the amount
calculated as follows:
(i) following the service of an Asset Coverage Test Breach
Notice (but prior to service of a Notice to Pay on the Covered Bond
Guarantor), such amount that would ensure that, if the Selected Mortgage Loan
Rights were sold at the Current Principal Balance plus the arrears of interest
and accrued interest in respect of the related Mortgage Loans, the Asset
Coverage Test would be satisfied on the next Determination Date taking into
account the payment obligations of the Covered Bond Guarantor on the
Distribution Date following that Determination Date; or
(ii) following the occurrence of an Issuer Event of Default and
service of a Notice to Pay on the Covered Bond Guarantor:
where:
N = the Australian Dollar Equivalent of the Required Redemption
Amount of the Pass-Through Covered Bonds less amounts standing to the credit
of the GIC Account and the principal amount of any Substitution Assets or
Authorised Investments (excluding all amounts to be applied on the next
following Distribution Date to repay higher ranking amounts in the Guarantee
Priority of Payments and those amounts that are required to repay any Series
of Covered Bonds which mature prior to or on the same date as the relevant
Series of Pass-Through Covered Bonds);
A = the aggregate Current Principal Balance of all Mortgage Loans
forming part of the Assets of the Trust; and
B = the Australian Dollar Equivalent of the Required Redemption
Amount in respect of each Series of Covered Bonds then outstanding less the
Australian Dollar Equivalent of the Required Redemption Amount in respect of
each Series of Covered Bonds then outstanding which has been provided for in
cash.
(c) the Trust Manager must direct the Covered Bond Guarantor to
and, upon receiving that direction, the Covered Bond Guarantor will, offer the
Selected Mortgage Loan Rights for sale to Purchasers for the best price
reasonably available but in any event:
(i) subject to paragraph (ii), following the service of an
Asset Coverage Test Breach Notice, for an amount not less than the Current
Principal Balance of the Mortgage Loans relating to the Selected Mortgage Loan
Rights plus the arrears of interest and accrued interest thereon; and
(ii) following an Issuer Event of Default and service of a
Notice to Pay on the Covered Bond Guarantor, for an amount not less than the
Adjusted Required Redemption Amount for the relevant Series of Pass-Through
Covered Bonds.
The Trust Manager may only direct the Covered Bond Guarantor to proceed with
any sale of Selected Mortgage Loan Rights in accordance with the provisions
summarised above and subsequent redemption of any Covered Bonds if such sale
and subsequent redemption does not result in an Amortisation Test
Deterioration.
The Trust Manager must direct the Covered Bond Guarantor to and, upon
receiving that direction, the Covered Bond Guarantor must use best efforts to
sell Selected Mortgage Loan Rights, in accordance with the provisions
summarised above:
(a) on (or directly after) every sixth Distribution Date after
the First Refinance Date; or
(b) on any other date determined by the Trust Manager (in its
absolute discretion),
each such date, a Refinance Date.
The Covered Bond Guarantor (acting at the direction of the Trust Manager) is
also permitted to offer for sale to Purchasers a part of any portfolio of
Selected Mortgage Loan Rights (a Partial Portfolio). The sale price of the
Partial Portfolio will (as a proportion of the Adjusted Required Redemption
Amount) be at least equal to the proportion that the aggregate Current
Principal Balance of the Mortgage Loans in the Partial Portfolio bears to the
aggregate Current Principal Balance of the Mortgage Loans in the relevant
portfolio of Selected Mortgage Loan Rights.
The Covered Bond Guarantor (acting at the direction of the Trust Manager) will
through a tender process appoint a portfolio manager of recognised standing on
a basis intended to incentivise the portfolio manager to achieve the best
price for the sale of the Selected Mortgage Loan Rights (if such terms are
commercially available in the market) to advise it in relation to the sale of
the Selected Mortgage Loan Rights to Purchasers (except where the Seller is
exercising its rights to repurchase Selected Mortgage Loan Rights under the
Mortgage Sale Agreement, as described in "Overview of the Principal Documents
- Mortgage Sale Agreement - Seller's right of repurchase in respect of
Selected Mortgage Loan Rights"). The terms of the agreement giving effect to
the appointment in accordance with such tender must be approved by the
Security Trustee.
In respect of any sale of Selected Mortgage Loan Rights in accordance with the
provisions summarised above, the Trust Manager will instruct such portfolio
manager to use all reasonable endeavours to procure that Selected Mortgage
Loan Rights are sold as quickly as reasonably practicable (in accordance with
the recommendations of the portfolio manager), taking into account the market
conditions at that time and the scheduled repayment dates of the Covered Bonds
and the terms of the Establishment Deed.
The terms of any sale and purchase agreement with respect to the sale of
Selected Mortgage Loan Rights (which will give effect to the recommendations
of the portfolio manager) will be subject to the prior written approval of the
Security Trustee (unless the Seller has exercised its rights to repurchase
Selected Mortgage Loan Rights under the Mortgage Sale Agreement, as described
in "Overview of the Principal Documents - Mortgage Sale Agreement - Seller's
right of repurchase in respect of Selected Mortgage Loan Rights"). The
Security Trustee will not be required to release the Selected Mortgage Loan
Rights from the Security unless the conditions relating to the release of the
Security (as described under "Overview of Principal Documents - Security Deed
- Release of Security" below) are satisfied.
The Trust Manager must direct the Covered Bond Guarantor to and, upon
receiving that direction, the Covered Bond Guarantor must, subject to the
paragraph above, enter into a sale and purchase agreement with the related
Purchasers, which will require, amongst other things, a cash payment from the
relevant Purchasers. Any such sale will not include any representations or
warranties from the Covered Bond Guarantor or the Seller in respect of the
Selected Mortgage Loan Rights unless expressly agreed by the Security Trustee
and otherwise agreed with the Seller.
Limit on Investing in Substitution Assets and Authorised Investments
Provided no Asset Coverage Test Breach Notice is outstanding and prior to the
service of a Notice to Pay on the Covered Bond Guarantor, the Trust Manager
must direct the Covered Bond Guarantor to and, upon receiving that direction,
the Covered Bond Guarantor must, invest the Available Income Amount, the
Available Principal Amount and the proceeds of the issue of Intercompany Notes
and the Demand Note (or the proceeds of any Increase in the Demand Note)
standing to the credit of the GIC Account in Substitution Assets, provided
that:
(a) the aggregate amount so invested in:
(i) any assets which fall within paragraph (a) of the
definition of Substitution Assets does not exceed 15 per cent. of the total
Assets of the Trust at any one time (or such other percentage required to
ensure compliance with any limits in the Australian Banking Act on
substitution assets that may collateralise covered bonds); and
(ii) any particular class of Substitution Assets does not exceed
any limits in the Australian Banking Act on substitution assets of that class
that may collateralise covered bonds; and
(b) such investments are made in accordance with the terms of
the Management Agreement and the Establishment Deed.
Depositing any amounts in any Trust Account will not constitute an investment
in Substitution Assets for these purposes.
Subject to the following paragraph, following the occurrence of an Issuer
Event of Default and service of a Notice to Pay on the Covered Bond Guarantor
or service of an Amortisation Test Breach Notice on the Covered Bond Guarantor
and the Issuer, all Substitution Assets must be sold by the Covered Bond
Guarantor (acting at the direction of the Trust Manager) as quickly as
reasonably practicable, and the proceeds credited to the GIC Account after
which the Covered Bond Guarantor (acting at the direction of the Trust
Manager) will be permitted to invest all available moneys in Authorised
Investments, provided that such sales or investments are made in accordance
with the terms of the Management Agreement and the Establishment Deed.
The Trust Manager may only direct the Covered Bond Guarantor to proceed with a
sale of Substitution Assets in accordance with the immediately preceding
paragraph and subsequent redemption of any Covered Bonds (including any
Pass-Through Covered Bonds) if such sale and subsequent redemption does not
result in an Amortisation Test Deterioration.
Cap on Fixed Rate Mortgage Loans
The Trust Manager may only direct the Covered Bond Guarantor to acquire Fixed
Rate Mortgage Loans from the Seller, and the Servicer may only consent to the
conversion of a Mortgage Loan forming part of the Assets of the Trust from a
variable rate to a fixed rate at any time, provided that:
(a) the acquired Fixed Rate Mortgage Loan or the Mortgage Loan
the subject of the conversion (as the case may be) is covered by a Fixed Rate
Swap; and
(b) such acquisition or conversion (as the case may be) will not
result in more than 25% of the aggregate Current Principal Balance of the
Mortgage Loans which then form part of the Assets of the Trust being subject
to a fixed rate of interest provided that no such restrictions shall apply
where:
(i) the conversion is required by law or the order of a
Governmental Authority; or
(ii) the Issuer advises the Trust Manager, the Covered Bond
Guarantor and the Servicer that such restrictions shall no longer apply and
the Issuer has issued a Rating Affirmation Notice.
Negative Covenants
Except as provided in or permitted by the Programme Documents, the Trust
Manager must not direct the Covered Bond Guarantor to:
(a) create or permit to subsist any Security Interest over the
whole or any part of the Assets of the Trust;
(b) transfer, sell, lend, part with or otherwise dispose of, or
deal with, or grant any option or present or future right to acquire any of
the Assets of the Trust or any interest, estate, right, title or benefit in or
to such Assets or agree or attempt or purport to do so;
(c) have an interest in any bank account;
(d) incur any indebtedness in respect of borrowed money
whatsoever or give any guarantee or indemnity in respect of any such
indebtedness;
(e) consolidate or merge with any other person or convey or
transfer its properties or assets substantially as an entirety to any other
person;
(f) have any employees or premises or subsidiaries;
(g) acquire any assets;
(h) invest in assets of a kind prescribed by the regulations
issued for the purposes of section 31(3) of the Australian Banking Act;
(i) enter into any contracts, agreements or other
undertakings;
(j) compromise, compound or release any debt due to it; and
(k) commence, defend, settle or compromise any litigation or
other claims relating to it or any of its assets.
The Covered Bond Guarantor will:
(a) remain Tax Resident in Australia throughout the period for
which it is acting as trustee of the Trust; and
(b) not perform any of its duties, or exercise any rights in
relation to the Trust outside of Australia.
Other Provisions
The allocation and distribution of the Available Income Amount, the Available
Principal Amount and all other amounts received by the Covered Bond Guarantor
is described under "Cashflows" below.
Retirement and Removal of the Covered Bonds Guarantor
Mandatory Retirement
The Covered Bond Guarantor must retire as trustee of the Trust if:
(a) the Covered Bond Guarantor ceases to carry on business in
all respects or as a professional trustee;
(b) the Covered Bond Guarantor merges or consolidates with
another entity, unless:
(i) that entity assumes the obligations of the Covered Bond
Guarantor under the Programme Documents; and
(ii) each Rating Agency has been notified of, and the Issuer has
delivered a Rating Affirmation Notice to the Covered Bond Guarantor (copied to
the Trust Manager, the Bond Trustee, the Security Trustee and each Rating
Agency) in respect of, the proposed retirement;
(c) an Insolvency Event occurs in respect of the Covered Bond
Guarantor in its personal capacity (but not in its capacity as trustee of any
trust);
(d) an Extraordinary Resolution requiring removal of the Covered
Bond Guarantor as trustee of the Trust is passed at a meeting of Covered
Bondholders of all Series taken together as a single Series with the nominal
amount of Covered Bonds not denominated in Australian Dollars converted into
Australian Dollars at the relevant Covered Bond Swap Rate and such retirement
is approved in writing by each Secured Creditor (such approval not to be
unreasonably withheld or delayed); or
(e) the Covered Bond Guarantor does not comply with a material
obligation under the Programme Documents and does not remedy the
non-compliance within 30 days of being requested to do so by the Trust
Manager.
Where the Covered Bond Guarantor does not retire within 30 days of the
occurrence of any of the events described above, the Trust Manager may by
written notice remove the Covered Bond Guarantor as trustee of the Trust. The
Trust Manager must appoint another trustee to be the trustee of the Trust as
soon as practicable after notification of the Covered Bond Guarantor's
retirement or removal.
Voluntary Retirement
The Covered Bond Guarantor may voluntarily retire as trustee of the Trust if
the Covered Bond Guarantor gives the Trust Manager not less than three months'
(or such other period as the Trust Manager may agree) written notice of its
intention to do so, subject to the Covered Bond Guarantor's procurement of, at
least 30 days before the date on which that removal becomes effective, a
Substitute Covered Bond Guarantor to assume all of its obligations under the
Programme Documents to which it is a party and to execute such documents as
the Trust Manager requires for that person to become bound by those Programme
Documents and such appointment of the Substitute Covered Bond Guarantor is
approved by the Trust Manager.
Any mandatory or voluntary retirement or removal of the Covered Bond Guarantor
is conditional upon the Issuer having delivered a Rating Affirmation Notice to
the Covered Bond Guarantor (copied to the Trust Manager, the Bond Trustee and
the Security Trustee) in respect of such mandatory or voluntary retirement,
removal and appointment by the Trust Manager.
The Establishment Deed is governed by, and construed in accordance with, the
laws applying in the State of New South Wales, Australia.
Management Agreement
The Trust Manager will act as trust manager of the Trust and in doing so will
provide certain Trust Management Services and Calculation Management Services
to the Covered Bond Guarantor and the Security Trustee pursuant to the terms
of the Management Agreement dated on or about the Programme Date between the
Covered Bond Guarantor, BOQ (in its capacity as Issuer, Seller and Servicer),
the Trust Manager and the Security Trustee.
The Trust Management Services will include but will not be limited to:
(a) maintaining the Ledgers on behalf of the Covered Bond
Guarantor;
(b) determining the amount of Principal Collections and the
Finance Charge Collections received and the Available Income Amount and the
Available Principal Amount to be distributed in accordance with the Priorities
of Payments described under "Cashflows", below;
(c) determining the amount of losses incurred on the Mortgage
Loans forming part of the Assets of the Trust during each Collection Period
and the amounts payable by the Covered Bond Guarantor on the immediately
following Distribution Date under the applicable Priority of Payments
described under "Cashflows", below;
(d) distributing the Available Income Amount and the Available
Principal Amount in accordance with the applicable Priorities of Payments
described under "Cashflows", below;
(e) maintaining records of all Authorised Investments and
Substitution Assets, as applicable.
The Calculation Management Services will include but will not be limited to:
(a) determining whether the Asset Coverage Test is satisfied on
each Determination Date prior to an Issuer Event of Default and service of a
Notice to Pay and/or a Covered Bond Guarantee Acceleration Notice in
accordance with the Establishment Deed, as more fully described under "Credit
Structure - Asset Coverage Test" below; and
(b) determining whether the Amortisation Test is satisfied on
each Determination Date following an Issuer Event of Default and service of a
Notice to Pay on the Covered Bond Guarantor (but prior to the service of a
Covered Bond Guarantee Acceleration Notice on the Covered Bond Guarantor and
the Issuer) in accordance with the Establishment Deed, as more fully described
under "Credit Structure - Amortisation Test", below.
If (i) the Trust Manager does not comply with an obligation under the
Programme Documents and the non-compliance would be considered by the Security
Trustee acting on the directions of (for so long as there are any Covered
Bonds outstanding) the Bond Trustee or (where no Covered Bonds are
outstanding) the Majority Secured Creditors to be materially prejudicial to
the interests of the Covered Bondholders or (where no Covered Bonds are
outstanding) the Majority Secured Creditors and the Trust Manager does not
remedy such non-compliance within 30 AU Business Days after becoming aware of
it or (ii) an Insolvency Event occurs in relation to the Trust Manager (each,
a Trust Manager Default), the Covered Bond Guarantor may, upon giving written
notice to the Servicer, the Trust Manager and the Rating Agencies, immediately
terminate the rights and obligations of the Trust Manager and appoint another
entity to act in its place. The Trust Manager may also retire from the
management of the Trust upon giving to the Covered Bond Guarantor at least
three calendar months' notice in writing or such lesser time as the Trust
Manager and the Covered Bond Guarantor agree. Upon that retirement the Trust
Manager, subject to any approval required by law, may appoint in writing any
other corporation approved by the Covered Bond Guarantor as Trust Manager in
its stead. If the Trust Manager does not propose a replacement by the date
which is one month prior to the date of its proposed retirement, the Covered
Bond Guarantor is entitled to appoint a new Trust Manager as of the date of
the proposed retirement. The purported appointment of a Substitute Trust
Manager has no effect until (i) the Covered Bond Guarantor has received
written confirmation from the Rating Agencies that the appointment of such
Substitute Trust Manager will not result in a withdrawal or downgrading of the
credit rating assigned by them to the Covered Bonds; and (ii) the Substitute
Trust Manager executes a document under which it assumes the obligations of
Trust Manager under the Management Agreement and all other Programme Documents
to which the Trust Manager is a party. Until the appointment of the Substitute
Trust Manager is complete, the Covered Bond Guarantor must act as Trust
Manager, provided that the Issuer and the Covered Bond Guarantor (acting
reasonably) have agreed a fee in writing to be paid to the Covered Bond
Guarantor for the period during which the Covered Bond Guarantor is required
to so act (and is entitled to the relevant fees for the period it so acts).
The Management Agreement is governed by, and construed in accordance with, the
laws applying in the State of New South Wales, Australia.
Swap Agreements
In order to hedge certain interest rate, currency or other risks in respect of
amounts received by the Covered Bond Guarantor under the Mortgage Loans and
from certain other Assets forming part of the Trust, amounts payable by the
Covered Bond Guarantor under the Intercompany Note Subscription Agreement to
BOQ and/or amounts payable by the Covered Bond Guarantor under the Covered
Bond Guarantee to Covered Bondholders in respect of the Covered Bonds on
issue, the Covered Bond Guarantor will enter into certain swap transactions
with swap providers as described below.
Each such swap transaction (including, without limitation, the Interest Rate
Swaps and each Covered Bond Swap) (together, the Swaps) will be evidenced by a
confirmation that supplements, forms part of and is subject to, an ISDA 2002
Master Agreement as published by the International Swaps & Derivatives
Association, Inc. (ISDA) and schedule and credit support document thereto
(such credit support document to be in the form of the ISDA 1995 Credit
Support Annex (Bilateral Form - Transfer) published by ISDA), between a swap
provider (a Swap Provider), the Covered Bond Guarantor, the Trust Manager and
the Security Trustee and, in the case of the Interest Rate Swaps, a Standby
Swap Provider (together, a Swap Agreement).
Interest Rate Swap Agreement
Some of the Mortgage Loans forming part of the Assets of the Trust from time
to time pay a variable amount of interest. Other Mortgage Loans pay a fixed
rate of interest for a period of time. The Substitution Assets or Authorised
Investments (as the case may be) and the amounts deposited into the GIC
Account may pay a variable or fixed amount of interest. However, the
Australian Dollar payments to be made by the Covered Bond Guarantor under the
Covered Bond Swaps and the Intercompany Notes and the Demand Note will be
based on the Bank Bill Rate for Australian Dollar deposits and varying
periods. To provide a hedge against the variance between:
(a) the rates of interest payable on the Mortgage Loans forming
part of the Trust and the Substitution Assets or Authorised Investments and
the amounts deposited into the GIC Account; and
(b) the Bank Bill Rate for Australian Dollar deposits and
varying applicable interest or calculation period,
the Covered Bond Guarantor, the Trust Manager, the Security Trustee, the
Interest Rate Swap Provider and the Standby Swap Provider will enter into
Interest Rate Swaps under the Interest Rate Swap Agreement.
The Interest Rate Swap Agreement is governed by, and construed in accordance
with, the laws applying in the State of New South Wales, Australia.
Covered Bond Swap Agreements
Where Covered Bonds are issued in a currency and/or on an interest rate basis
different to the Interest Rate Swaps, the Covered Bond Guarantor will enter
into one or more Covered Bond Swaps, each under a Covered Bond Swap Agreement
with a Covered Bond Swap Provider. Each Covered Bond Swap may be either a
Forward Starting Covered Bond Swap or a Non-Forward Starting Covered Bond
Swap. Where the Covered Bond Guarantor enters into a Forward Starting Covered
Bond Swap, the payments made under the Intercompany Notes will be made in
Australian Dollars, regardless of the currency of the relevant Series or
Tranche, as applicable, of Covered Bonds.
Each Forward Starting Covered Bond Swap will provide a hedge (after service of
a Notice to Pay on the Covered Bond Guarantor) against certain interest rate,
currency and/or other risks in respect of amounts received by the Covered Bond
Guarantor under the Mortgage Loan Rights, Substitution Assets, Authorised
Investments or certain other amounts deposited into the GIC Account and the
Interest Rate Swaps and amounts payable by the Covered Bond Guarantor under
the Covered Bond Guarantee in respect of the Covered Bonds (after the service
of a Notice to Pay on the Covered Bond Guarantor).
Each Non-Forward Starting Covered Bond Swap will provide a hedge against
certain interest rate, currency and/or other risks in respect of amounts
received by the Covered Bond Guarantor under the Mortgage Loan Rights,
Substitution Assets, Authorised Investments or certain other amounts deposited
into the GIC Account and the Interest Rate Swaps and amounts payable by the
Covered Bond Guarantor under the Intercompany Note Subscription Agreement
(prior to the service of a Notice to Pay on the Covered Bond Guarantor) and
under the Covered Bond Guarantee in respect of the Covered Bonds (after
service of a Notice to Pay on the Covered Bond Guarantor).
Where required to hedge such risks, there will be one (or more) Covered Bond
Swap Agreement(s) and Covered Bond Swap(s) in relation to each Series or
Tranche, as applicable, of Covered Bonds.
Under the Forward Starting Covered Bond Swaps, the Covered Bond Swap Provider
will pay to the Covered Bond Guarantor on each Interest Payment Date (or, if a
Notice to Pay is served on an Interest Payment Date, on the second Business
Day following such Interest Payment Date) after service of a Notice to Pay on
the Covered Bond Guarantor, an amount equal to the relevant amounts that are
then payable by the Covered Bond Guarantor under the Covered Bond Guarantee in
respect of interest payable under the relevant Series or Tranche of Covered
Bonds. In return, the Covered Bond Guarantor will pay to the Covered Bond
Swap Provider on each Distribution Date or other payment date (as specified in
the relevant confirmation) after service of a Notice to Pay on the Covered
Bond Guarantor an amount in Australian Dollars calculated by reference to the
Bank Bill Rate for Australian Dollar deposits (for such period as specified in
the relevant confirmation) or such other rate as may be specified in the
relevant Confirmation plus a spread.
Under the Non-Forward Starting Covered Bond Swaps:
(a) if the related Intercompany Note is made in Australian
Dollars (where the related Series of Covered Bonds are denominated in
Australian Dollars), the Covered Bond Guarantor will pay to the Covered Bond
Swap Provider on each payment date (as specified in the relevant confirmation)
an amount in Australian Dollars calculated by reference to the Bank Bill Rate
for Australian Dollar deposits (for such period as specified in the relevant
confirmation) or such other rate as may be specified in the relevant
confirmation plus a spread. In return the Covered Bond Swap Provider will
pay to the Covered Bond Guarantor on each Interest Payment Date an amount in
Australian Dollars calculated by reference to the rate of interest payable on
the related Series or Tranche of Covered Bonds; and
(b) if the related Intercompany Note is made in a currency other
than in Australian Dollars, on the relevant Issue Date, the Covered Bond
Guarantor will pay to the Covered Bond Swap Provider an amount equal to the
amount received by the Covered Bond Guarantor under the related Intercompany
Note (being the aggregate nominal amount of such Series or Tranche, as
applicable, of Covered Bonds) and in return the Covered Bond Swap Provider
will pay to the Covered Bond Guarantor the Australian Dollar Equivalent of the
first mentioned amount. Thereafter, the Covered Bond Swap Provider will pay
to the Covered Bond Guarantor on each Interest Payment Date an amount equal to
the relevant amounts that would be payable by the Covered Bond Guarantor under
either the related Intercompany Note in accordance with the terms of the
Intercompany Note Subscription Agreement or the Covered Bond Guarantee in
respect of interest and principal payable under the relevant Series or Tranche
of Covered Bonds. In return, the Covered Bond Guarantor will pay to the
Covered Bond Swap Provider on each payment date (as specified in the relevant
confirmation) an amount in Australian Dollars calculated by reference to the
Bank Bill Rate for Australian Dollar deposits (for such period as specified in
the relevant confirmation) or such other rate as may be specified in the
relevant confirmation plus a spread and the Australian Dollar Equivalent of
the relevant portion of any principal due to be repaid in respect of the
related Intercompany Note in accordance with the Intercompany Note
Subscription Agreement.
Each Non-Forward Starting Covered Bond Swap and each Forward Starting Covered
Bond Swap will terminate on the Final Maturity Date of the relevant Series or
Tranche of Covered Bonds or, if the Covered Bond Guarantor notifies the
Covered Bond Swap Provider, prior to the Final Maturity Date, of the inability
of the Covered Bond Guarantor to pay in full or in part Guaranteed Amounts
corresponding to the Final Redemption Amount in respect of such Series or
Tranche of Covered Bonds, the final Interest Payment Date on which an amount
representing any or all of the Final Redemption Amount is paid (but in any
event not later than the Extended Due for Payment Date).
Rating Downgrade Event
Under the terms of each Swap Agreement, in the event that the credit rating(s)
or counterparty risk assessment, as applicable, of the relevant Swap Provider
is downgraded by a Rating Agency below the credit rating(s) or counterparty
risk assessment, as applicable, specified in such Swap Agreement (in
accordance with such Rating Agency's criteria) for that Swap Provider, that
Swap Provider will, in accordance with such Swap Agreement, be required to
take certain remedial measures which may include:
(a) providing collateral for its obligations under such Swap
Agreement;
(b) arranging for its obligations under such Swap Agreement to
be transferred to a replacement entity provided that either (i) such entity is
an entity with the credit rating(s) or counterparty risk assessment, as
applicable, required by the relevant Rating Agency or (ii) in some cases, the
relevant Rating Agency has confirmed that such transfer will not adversely
affect the credit ratings of the then outstanding Series of Covered Bonds in
effect immediately prior to the downgrade;
(c) procuring another entity to become co-obligor or guarantor
in respect of its obligations under such Swap Agreement provided that either
(i) such entity is an entity with the credit rating(s) or counterparty risk
assessment required by the relevant Rating Agency or (ii) in some cases, the
relevant Rating Agency has confirmed that obtaining such a co-obligor or
guarantor will not adversely affect the credit ratings of the then outstanding
Series of Covered Bonds in effect immediately prior to the downgrade; or
(d) taking such other action as will result in the credit
ratings of the then outstanding Series of Covered Bonds being maintained at,
or restored to, the level they were at immediately prior to the downgrade.
A failure to take such steps within the time periods specified in the relevant
Swap Agreement will allow the Covered Bond Guarantor to terminate the relevant
Swaps under such Swap Agreement.
Other Termination Events
One or more Swaps under a Swap Agreement may also be terminated early in
certain other circumstances, including:
(a) at the option of the Covered Bond Guarantor or the relevant
Swap Provider, as applicable, if there is a failure by the other party to pay
any amounts due under such Swap Agreement within the specified grace period;
(b) upon the occurrence of an certain insolvency events in
relation to the relevant Swap Provider, or the Covered Bond Guarantor, or the
merger of one of the relevant Swap Provider or the Covered Bond Guarantor
without an assumption of the obligations under such Swap Agreement;
(c) if there is a change of law, a change in application of the
relevant law or a consolidation, amalgamation, merger, transfer of assets,
reorganisation, reincorporation or reconstitution of or by a party which
results in the Covered Bond Guarantor or the relevant Swap Provider (or both)
being obliged to make a withholding or deduction on account of a tax on a
payment to be made by such party to the other party under such Swap Agreement
and the relevant Swap Provider thereby being required under the terms of such
Swap Agreement to gross up payments made to the Covered Bond Guarantor, or to
receive net payments from the Covered Bond Guarantor (who is not required
under the terms of such Swap Agreement to gross up payments made to the
relevant Swap Provider);
(d) if there is a change in law which results in the illegality
of the obligations to be performed by the relevant Swap Provider or the
Covered Bond Guarantor, as applicable, under such Swap Agreement or a force
majeure event which renders performance impossible or impracticable;
(e) in relation to a Covered Bond Swap only, if the
corresponding Series of Covered Bonds are redeemed or cancelled;
(f) if a Covered Bond Guarantee Acceleration Notice is served on
the Covered Bond Guarantor;
(g) upon the making of an amendment (without the prior written
consent of the relevant Swap Provider) to the Priorities of Payment which has
an adverse effect on the amounts paid to the relevant Swap Provider under the
Priorities of Payment; and
(h) upon the making of an amendment (without the prior written
consent of the relevant Swap Provider) to any Programme Document, which has
the effect of requiring the relevant Swap Provider to pay more or receive less
under the such Swap Agreement than would otherwise have been the case
immediately prior to such amendment or such that the relevant Swap Provider
would suffer an adverse consequence as a result of such amendment.
Upon the termination of a Swap, the Covered Bond Guarantor or the relevant
Swap Provider may be liable to make a termination payment to the other party
in accordance with the provisions of relevant Swap Agreement.
Swap Agreement Credit Support Document
The Covered Bond Guarantor and each Swap Provider will also enter into a
credit support document under the relevant Swap Agreement (such credit support
document in the form of the ISDA 1995 Credit Support Annex (Bilateral Form -
Transfer) published by ISDA (each, a Swap Agreement Credit Support
Document). Each Swap Agreement Credit Support Document will provide that,
from time to time, if required to do so following its downgrade and subject to
the conditions specified in such Swap Agreement Credit Support Document, the
relevant Swap Provider will make transfers of collateral to the Covered Bond
Guarantor in support of its obligations under the relevant Swap Agreement (the
Swap Collateral) and the Covered Bond Guarantor will be obliged to return
equivalent collateral in accordance with the terms of such Swap Agreement
Credit Support Document. Each Swap Agreement Credit Support Document will form
a part of the relevant Swap Agreement.
Swap Collateral required to be transferred by the relevant Swap Provider
pursuant to the terms of the Swap Agreement Credit Support Document may be
delivered in the form of cash or certain securities as specified in such Swap
Agreement Credit Support Document. In the case of the Covered Bond Swap
Agreements, cash amounts will be paid into an interest bearing account held
with a Qualified Institution (a Covered Bond Swap Cash Collateral Account) and
any non-cash collateral will be held in a separate securities account (a
Covered Bond Swap Securities Collateral Account), in each case, opened in
accordance with the relevant Covered Bond Swap Agreement.
In the case of the Interest Rate Swap Agreement, cash amounts payable by Bank
of Queensland, as Swap Provider, will be paid into an account designated as a
Swap Collateral Cash Account in respect of the relevant Swap Agreement Credit
Support Annex opened and held with the Account Bank. Securities will be
transferred into a custody account opened and held with a custodian (a Swap
Collateral Securities Account). In the case of the Standby Swap Provider, cash
amounts will be paid into an interest bearing account held with a Qualified
Institution (a SSP Cash Collateral Account) and any non-cash collateral will
be held in a separate securities account (a SSP Securities Collateral
Account), in each case, opened in accordance with the Interest Rate Swap
Agreement. References to the above accounts and to payments and/or transfers
from such accounts are deemed to be a reference to payments and/or transfers
from such accounts as and when opened by the Covered Bond Guarantor.
If a Covered Bond Swap Cash Collateral Account, a Swap Collateral Cash
Account, a SSP Cash Collateral Account, a Covered Bond Swap Securities
Collateral Account, a Swap Collateral Securities Account or a SSP Securities
Collateral Account is opened, cash and securities (and all income in respect
thereof) transferred as collateral will only be available to be applied in
returning collateral (and income thereon) or in satisfaction of amounts owing
by the relevant Swap Provider in accordance with the terms of the relevant
Swap Agreement Credit Support Document.
Any Swap Collateral Excluded Amounts will be paid to the relevant Swap
Provider directly and not via the Priorities of Payments.
Limited Recourse
All obligations of the Covered Bond Guarantor to the relevant Swap Provider
under the Swap Agreements are limited in recourse as described in the
Establishment Deed.
Governing Law
Each Swap Agreement (including the Swap Agreement Credit Support Document
under such Swap Agreement) will be governed by, and construed in accordance
with, the laws applying in the State of New South Wales, Australia.
Account Bank Agreement
Pursuant to the terms of the Account Bank Agreement dated on or about the
Programme Date between the Account Bank, the Covered Bond Guarantor, the
Issuer, the Trust Manager and the Security Trustee, the Trust Manager will
assist the Covered Bond Guarantor in establishing the Trust Accounts with the
Account Bank, which will be operated by the Account Bank in accordance with
the Account Bank Agreement, the relevant Account Bank Mandate and the Account
Bank's standard terms and conditions applicable to accounts and electronic
banking (as supplemented/or amended from time to time).
The Covered Bond Guarantor (acting at the direction of the Trust Manager) or
the Security Trustee may, upon written notice to the Account Bank, terminate
the appointment of the Account Bank if:
(a) a deduction or withholding for or on account of any Tax is
imposed, or it appears likely that such a deduction or withholding will be
imposed, in respect of the interest payable on any Trust Account, as
applicable; or
(b) the Account Bank fails to make payment on the due date of
any payment due and payable by it under the Account Bank Agreement and such
default is not waived by the Covered Bond Guarantor (acting at the direction
of the Trust Manager) (with the prior written consent of the Security Trustee)
or the Security Trustee, as applicable, and such default continues unremedied
for a period of five AU Business Days; or
(c) the Account Bank fails to perform any of its other material
obligations under the Account Bank Agreement, the Security Deed or any other
Programme Document to which it is a party and which is, in the opinion of the
Security Trustee, materially prejudicial to the holders of Covered Bonds (and
such failure is not waived by the Covered Bond Guarantor (acting at the
direction of the Trust Manager) with the prior written consent of the Security
Trustee and such failure remains unremedied for a period of 10 AU Business
Days after the Trust Manager or the Security Trustee has given notice of such
failure to the Account Bank,
and the Covered Bond Guarantor (acting at the direction of the Trust Manager)
or the Security Trustee must, upon written notice to the Account Bank,
terminate the appointment of the Account Bank if:
(i) the Account Bank ceases to be a Qualified Institution and
the Account Bank does not, within 30 days of the occurrence of such event,
obtain a guarantee of its obligations under the Account Bank Agreement from a
Qualified Institution; or
(ii) an Insolvency Event occurs in respect of the Account Bank.
The Account Bank Agreement is governed by, and is construed in accordance
with, the laws applying in the State of New South Wales, Australia.
Security Deed
Pursuant to the terms of the Security Deed dated on or about the Programme
Date between BOQ (in its capacity as Issuer, Seller, Servicer and Interest
Rate Swap Provider), the Covered Bond Guarantor, the Trust Manager and the
Security Trustee, as security for payment of the Secured Obligations, the
Covered Bond Guarantor charges all of its present and future rights, title and
interest in, and all of its present and future rights in relation to, the
Charged Property (Charged Property), in favour of the Security Trustee.
The Security referred to above, is a floating charge. To the extent the
Security is a floating charge, it will become a fixed charge automatically and
immediately in respect of all Charged Property subject to the floating charge:
(a) without the need for any notice to or act by the Security
Trustee, following the service of a Covered Bond Guarantee Acceleration Notice
on the Covered Bond Guarantor and the Issuer; and
(b) in respect of any such Charged Property specified in any
notice which may be given by the Security Trustee to the Covered Bond
Guarantor and the Trust Manager at any time if, in the opinion of the Security
Trustee, that Charged Property is at risk of being seized, taken or becoming
subject to any Security Interest other than any Security Interest expressly
permitted under the Programme Documents.
Release of Security
In the event of any sale or transfer of Mortgage Loan Rights (including
Selected Mortgage Loan Rights) by or on behalf of the Covered Bond Guarantor
(including by way of in specie distributions by the Covered Bond Guarantor),
or surrender or extinguishment of the Covered Bond Guarantor's interest in
Mortgage Loan Rights (including Selected Mortgage Loan Rights) pursuant to and
in accordance with the Programme Documents, such Mortgage Loan Rights will no
longer form part of the Assets of the Trust and the Security Trustee will, if
so directed in writing by the Trust Manager (at the sole cost and expense of
the Covered Bond Guarantor), take all reasonable steps necessary to ensure the
release or discharge of those Mortgage Loan Rights from the Security Interests
created by and pursuant to the Security Deed on or prior to the date of such
sale, provided that the Trust Manager has provided to the Security Trustee a
certificate that such sale of Mortgage Loan Rights has been made in accordance
with the terms of the Programme Documents and, in the case of Selected
Mortgage Loan Rights only, that the Selected Mortgage Loan Rights have been
selected on a basis that is representative of the Mortgage Loan Rights then
forming part of the Assets of the Trust.
Retirement and removal of Security Trustee
The Security Trustee may retire as trustee of the Security Trust at any time
upon giving three calendar months' prior written notice to the Trust Manager.
The Security Trustee must retire if:
(a) it ceases to carry on business as a professional security
trustee;
(b) an Insolvency Event occurs in respect of the Security
Trustee in its personal capacity (but not in its capacity as trustee of any
other trust); or
(c) the removal of the Security Trustee is approved by an
Extraordinary Resolution at (i) a meeting of the Covered Bondholders of all
Series taken together as a single Series or (ii) (if there are no Covered
Bonds outstanding) a meeting of the Majority Secured Creditors.
If the Security Trustee does not retire within 30 days following any of the
events described above, the Trust Manager may remove the Security Trustee from
office as trustee of the Security Trust and will use its best endeavours to
ensure that a successor security trustee is appointed as soon as possible.
The retirement or removal of the Security Trustee takes effect when a
successor security trustee is appointed, the successor security trustee
obtains title to (or the benefit of) the Security Deed and any other Programme
Documents to which the Security Trustee is party, and the parties to such
documents have the same rights amongst themselves as if they would have had if
the successor security trustee had been party to them at the dates of such
Programme Documents.
If no successor security trustee is appointed within 90 days of notice of the
retirement or removal of the Security Trustee, the Security Trustee may itself
appoint a successor security trustee or apply to the court for a successor
security trustee to be appointed.
Any mandatory or voluntary retirement or removal of the Security Trustee is
conditional upon the Issuer having delivered a Rating Affirmation Notice to
the Covered Bond Guarantor (copied to the Trust Manager, the Issuer, the
Rating Agencies and the Security Trustee) in respect of such mandatory or
voluntary retirement, removal and appointment by the Trust Manager.
Enforcement
If a Covered Bond Guarantee Acceleration Notice is served on the Covered Bond
Guarantor and the Issuer, the Security Trustee will be entitled to appoint a
Receiver, and/or enforce the Security constituted by the Security Deed
(including selling the Mortgage Loan Rights forming part of the Assets of the
Trust), and/or take such steps as it will deem necessary, subject in each case
to being indemnified and/or prefunded and/or secured to its satisfaction.
All proceeds received by the Security Trustee from the enforcement or
realisation of the Security will be applied in accordance with the
Post-Enforcement Priority of Payments described under "Cashflows" below, other
than any Swap Collateral Excluded Amounts which will be paid to the relevant
Swap Provider directly and not via the Post-Enforcement Priority of Payments.
The Security Deed is governed by, and construed in accordance with, the laws
applying in the State of New South Wales, Australia.
Credit Structure
The Covered Bonds will be direct, unsecured, unsubordinated and unconditional
obligations of the Issuer. The Covered Bond Guarantor has no obligation to
pay the Guaranteed Amounts under the Covered Bond Guarantee until the
occurrence of an Issuer Event of Default, service by the Bond Trustee on the
Issuer of an Issuer Acceleration Notice (copied to the Covered Bond Guarantor)
and a Notice to Pay on the Covered Bond Guarantor (copied to the Trust Manager
and the Security Trustee) or, if earlier, following the occurrence of a
Covered Bond Guarantor Event of Default and service by the Bond Trustee on the
Covered Bond Guarantor (copied to the Trust Manager and the Security Trustee)
and the Issuer of a Covered Bond Guarantee Acceleration Notice. The Issuer
will not be relying on any payments by the Covered Bond Guarantor in order to
pay interest or repay principal under the Covered Bonds.
There are a number of features of the Programme which enhance the likelihood
of timely and, as applicable, ultimate payments to Covered Bondholders, as
follows:
(a) the Covered Bond Guarantee provides credit support to the
Issuer;
(b) the Asset Coverage Test is intended to test, prior to the
service of a Notice to Pay on the Covered Bond Guarantor, the asset coverage
of the Assets of the Trust held from time to time by the Covered Bond
Guarantor in respect of the Covered Bonds on a monthly basis;
(c) the Amortisation Test is intended to test, following the
service of a Notice to Pay on the Covered Bond Guarantor (but prior to the
service of a Covered Bond Guarantee Acceleration Notice on the Covered Bond
Guarantor and the Issuer), the asset coverage of the Assets of the Trust held
from time to time by the Covered Bond Guarantor in respect of the Covered
Bonds;
(d) a Reserve Fund will be established in the GIC Account which
will be funded from the Available Income Amount or the proceeds of the issue
of Intercompany Notes or the Demand Note (or the proceeds of any Increase in
the Demand Note) up to the Reserve Fund Required Amount if BOQ's credit
ratings fall below the Moody's Specified Rating and/or the Fitch Specified
Ratings; and
(e) under the terms of the Account Bank Agreement, the Account
Bank has agreed to pay a rate of interest per annum as specified therein, or
as may otherwise be agreed between the Issuer and the Account Bank from time
to time, on all amounts held by the Covered Bond Guarantor in the GIC Account.
Certain of these factors are considered more fully in the remainder of this
section.
Covered Bond Guarantee
Pursuant to the terms of the Bond Trust Deed, the Covered Bond Guarantor has
guaranteed payments of interest and principal under the Covered Bonds issued
by the Issuer. The Covered Bond Guarantor has agreed to pay an amount equal
to the Guaranteed Amounts when the same becomes Due for Payment but which
would otherwise be unpaid by the Issuer. The obligations of the Covered Bond
Guarantor under the Covered Bond Guarantee constitute direct, absolute,
unconditional (following an Issuer Event of Default, service of an Issuer
Acceleration Notice and service of a Notice to Pay or following a Covered Bond
Guarantor Event of Default and service of a Covered Bond Guarantee
Acceleration Notice) and (subject as provided in Condition 17) obligations of
the Covered Bond Guarantor, secured as provided in the Security Deed and
limited in recourse against the Covered Bond Guarantor. The Bond Trustee
will be required to serve a Notice to Pay on the Covered Bond Guarantor
following the occurrence of an Issuer Event of Default and the service by the
Bond Trustee of an Issuer Acceleration Notice on the Issuer (whereupon the
Covered Bonds will become immediately due and payable as against the Issuer
but not, at such time, as against the Covered Bond Guarantor).
A Covered Bond Guarantee Acceleration Notice may be served by the Bond Trustee
on the Issuer and the Covered Bond Guarantor following the occurrence of a
Covered Bond Guarantor Event of Default. If a Covered Bond Guarantee
Acceleration Notice is served, the Covered Bonds will become immediately due
and payable (if they have not already become due and payable) and the
obligations of the Covered Bond Guarantor under the Covered Bond Guarantee
will be accelerated and the Security Trustee will be entitled to enforce the
Security. Payments made by the Covered Bond Guarantor under the Covered Bond
Guarantee will be made subject to, and in accordance with, the Guarantee
Priority of Payments. Payments made by the Security Trustee will be made
subject to, and in accordance with, the Post-Enforcement Priority of Payments.
See further "Overview of the Principal Documents - Bond Trust Deed" as regards
the terms of the Covered Bond Guarantee.
See further "Cashflows - Guarantee Priority of Payments" as regards the
payment of amounts payable by the Covered Bond Guarantor to Covered
Bondholders and other Secured Creditors following service of a Notice to Pay.
Asset Coverage Test
The Asset Coverage Test is intended to test the asset coverage of the Assets
of the Trust from time to time held by the Covered Bond Guarantor in respect
of the Covered Bonds on a monthly basis. This is to ensure that the Assets
of the Trust from time to time held by the Covered Bond Guarantor do not fall
below a certain threshold and are sufficient for the Covered Bond Guarantor to
meet its obligations under the Covered Bond Guarantee and senior expenses
which rank in priority or pari passu and rateably with amounts due on the
Covered Bonds.
The Establishment Deed provides that, prior to the service of a Notice to Pay
on the Covered Bond Guarantor and/or a Covered Bond Guarantee Acceleration
Notice on the Issuer and the Covered Bond Guarantor, the Assets of the Trust
from time to time held by the Covered Bond Guarantor are subject to the Asset
Coverage Test. Accordingly, for so long as the Covered Bonds remain
outstanding, the Trust Manager must ensure that on each such Determination
Date, the Adjusted Aggregate Mortgage Loan Amount will be at least equal to
the Australian Dollar Equivalent of the aggregate Principal Amount Outstanding
of the Covered Bonds as calculated on the relevant Determination Date. The
Asset Coverage Test will be tested by the Trust Manager on each such
Determination Date and:
(a) on any day, to the extent that the Adjusted Aggregate
Mortgage Loan Amount is at least equal to the Australian Dollar Equivalent of
the aggregate Principal Amount Outstanding of the Covered Bonds as calculated
on that day (but by reference to the Adjusted Aggregate Mortgage Loan Amount
and the aggregate Principal Amount Outstanding of the Covered Bonds as at the
last day of the immediately preceding Collection Period), the Asset Coverage
Test will be satisfied; and
(b) on any day, to the extent that the Adjusted Aggregate
Mortgage Loan Amount is not at least equal to the Australian Dollar Equivalent
of the aggregate Principal Amount Outstanding of the Covered Bonds as
calculated on that day (but by reference to the Adjusted Aggregate Mortgage
Loan Amount and the aggregate Principal Amount Outstanding of the Covered
Bonds as at the last day of the immediately preceding Collection Period), the
Asset Coverage Test will not be satisfied.
If on any Determination Date prior to the service of a Notice to Pay on the
Covered Bond Guarantor and/or a Covered Bond Guarantee Acceleration Notice on
the Issuer and the Covered Bond Guarantor, the Asset Coverage Test is not
satisfied, then pursuant to the terms of the Establishment Deed, the Trust
Manager must:
(i) use all reasonable endeavours to arrange for the Covered
Bond Guarantor to acquire sufficient additional Mortgage Loan Rights from the
Seller in accordance with the Mortgage Sale Agreement; and
(ii) direct the Covered Bond Guarantor to purchase Substitution
Assets or request subscriptions from the Demand Note Subscriber for an
Increase in the Demand Note,
in order to ensure that the Asset Coverage Test will be satisfied on any date
on or before the immediately following Determination Date. The Consideration
payable to the Seller for the sale of such Mortgage Loan Rights to the Covered
Bond Guarantor may be funded by (i) cash available to the Covered Bond
Guarantor to pay for such Mortgage Loan Rights in accordance with the
Pre-Issuer Event of Default Principal Priority of Payments; and/or (ii) the
proceeds of an Increase in the Demand Note.
If the Trust Manager has not taken sufficient action in accordance with the
above paragraph such that the Asset Coverage Test remains unsatisfied for a
second consecutive Determination Date, the Bond Trustee must serve an Asset
Coverage Test Breach Notice on the Covered Bond Guarantor (subject to the Bond
Trustee having actual knowledge or express notice of the non-satisfaction of
the Asset Coverage Test). The Bond Trustee will be deemed to have revoked an
Asset Coverage Test Breach Notice if on the Determination Date falling on or
prior to the third consecutive Determination Date, the Asset Coverage Test is
subsequently satisfied and neither a Notice to Pay nor a Covered Bond
Guarantee Acceleration Notice has been served. If the Asset Coverage Test
Breach Notice has not been revoked in accordance with the foregoing, then an
Issuer Event of Default will occur.
See further "Overview of the Principal Documents - Establishment Deed - Asset
Coverage Test", above.
Amortisation Test
The Amortisation Test is intended to ensure that, following service of a
Notice to Pay on the Covered Bond Guarantor (but prior to the service of a
Covered Bond Guarantee Acceleration Notice on the Covered Bond Guarantor and
the Issuer), the Assets of the Trust from time to time held by the Covered
Bond Guarantor do not fall below a certain threshold and are sufficient to
meet its obligations under the Covered Bond Guarantee and senior expenses
which rank in priority or pari passu with amounts due on the Covered Bonds.
Pursuant to the Establishment Deed, the Trust Manager must, for so long as any
Covered Bonds remain outstanding, ensure that on each Determination Date
following service of a Notice to Pay on the Covered Bond Guarantor (but prior
to the service of a Covered Bond Guarantee Acceleration Notice on the Covered
Bond Guarantor and the Issuer), the Amortisation Test Aggregate Mortgage Loan
Amount (as at the last day of the immediately preceding Collection Period) is
in an amount at least equal to the Australian Dollar Equivalent of the then
aggregate Principal Amount Outstanding (as at the last day of the immediately
preceding Collection Period) of the Covered Bonds.
See further "Overview of the Principal Documents - Establishment Deed -
Amortisation Test", above.
Legislated Collateralisation Test
The Programme benefits from the Issuer's obligation to comply with the minimum
over-collateralisation requirements set out in the Australian Banking Act.
This is described in more detail in the section "Description of the Covered
Bond Provisions of the Australian Banking Act" of this Prospectus. As the
Legislative Collateralisation Test is a minimum requirement, the Issuer
expects that its obligation in respect of this legal requirement will be
satisfied in all circumstances in which the Asset Coverage Test or the
Amortisation Test, as applicable, is satisfied.
Reserve Fund
The Covered Bond Guarantor is required to establish a reserve fund within the
GIC Account which will be credited with the Available Income Amount and/or
(after the service of a Notice to Pay on the Covered Bond Guarantor but prior
to the service of a Covered Bond Guarantee Acceleration Notice on the Covered
Bond Guarantor and the Issuer) the Available Principal Amount, the remaining
subscription proceeds of an issue of Intercompany Notes or the Demand Note (or
the proceeds of any Increase in the Demand Note) up to an amount equal to the
Reserve Fund Required Amount.
The Covered Bond Guarantor will be required on the first Issue Date or first
Distribution Date, to deposit into the GIC Account (with a corresponding
credit to the Reserve Ledger) any Available Income Amount or the relevant
subscription proceeds of an issue of Intercompany Notes or a Demand Note (or
the proceeds of any Increase in the Demand Note) up to an amount equal to the
Reserve Fund Required Amount. On each subsequent Issue Date or Distribution
Date, the Covered Bond Guarantor may be required to make further deposits into
the GIC Account (with a corresponding credit to the Reserve Ledger) of any
Available Income Amount and/or (after the service of a Notice to Pay on the
Covered Bond Guarantor but prior to the service of a Covered Bond Guarantee
Acceleration Notice on the Covered Bond Guarantor and the Issuer) the
Available Principal Amount, the relevant subscription proceeds of an issue of
Intercompany Notes or a Demand Note (or the proceeds of any Increase in the
Demand Note) up to an amount equal to the Reserve Fund Required Amount. The
Reserve Fund Required Amount on any day will depend on the credit rating and
deposit rating of the Issuer. If the Issuer's short-term unsecured,
unsubordinated and unguaranteed debt obligations are not rated below the Fitch
Specified Ratings and the Issuer's deposit rating is not below the Moody's
Specified Rating, the Reserve Fund Required Amount is nil (or such other
amount as the Issuer will direct the Covered Bond Guarantor). As at the date
of this Prospectus, the Issuer does not have the Fitch Specified Ratings or
the Moody's Specified Rating. Accordingly, the Issuer will be required to
deposit and, for so long as the Issuer continues to not have the Fitch
Specified Ratings and/or the Moody's Specified Rating, maintain the Reserve
Fund Required Amount in the GIC Account. See further the section "Cashflows
- Pre-Issuer Event of Default Income Priority of Payments" of this Prospectus
and the definition of "Reserve Fund Required Amount" in the section "Glossary"
of this Prospectus.
Cashflows
As described above under Credit Structure, until a Notice to Pay is served on
the Covered Bond Guarantor or a Covered Bond Guarantee Acceleration Notice is
served on the Covered Bond Guarantor and the Issuer, the Covered Bonds will be
obligations of the Issuer only. The Issuer is liable to make payments when
due on the Covered Bonds, whether or not the Issuer has received any
corresponding payment from the Covered Bond Guarantor.
This section summarises the Priorities of Payments of the Covered Bond
Guarantor, as to the allocation and distribution of amounts standing to the
credit of the Trust Accounts and their order of priority:
(a) prior to the service of a Notice to Pay or a Covered Bond
Guarantee Acceleration Notice;
(b) following service of a Notice to Pay (but prior to the
service of a Covered Bond Guarantee Acceleration Notice); and
(c) following the service of a Covered Bond Guarantee
Acceleration Notice and/or realisation of the Security,
all in accordance with the Establishment Deed and Security Deed, as
applicable.
Allocation and distribution of the Available Income Amount prior to the
service of a Notice to Pay or a Covered Bond Guarantee Acceleration Notice
Prior to the service of a Notice to Pay on the Covered Bond Guarantor or a
Covered Bond Guarantee Acceleration Notice on the Covered Bond Guarantor and
the Issuer, the Available Income Amount standing to the credit of the Trust
Accounts will be allocated and distributed as described below.
On the Determination Date immediately preceding each Distribution Date, the
Trust Manager must calculate:
(a) the Available Income Amount available for distribution on
the following Distribution Date; and
(b) the Reserve Fund Required Amount, if applicable.
Pre-Issuer Event of Default Income Priority of Payments
On each Distribution Date (except for amounts due to third parties by the
Covered Bond Guarantor described below under (c)(iii) which in each case must
be paid, at the direction of the Trust Manager, when due and, for the
avoidance of doubt, any Swap Collateral Excluded Amounts due to the relevant
Swap Providers by the Covered Bond Guarantor under the relevant Swap
Agreements which must be paid, at the direction of the Trust Manager, directly
to the relevant Swap Providers in accordance with the terms of the relevant
Swap Agreements), the Trust Manager must direct the Covered Bond Guarantor to
and, upon receiving that direction, the Covered Bond Guarantor will, apply the
Available Income Amount from the GIC Account to make the following payments
and provisions in the following order of priority (Pre-Issuer Event of Default
Income Priority of Payments) (in each case only if and to the extent that
payments or provisions of a higher priority have been made in full):
(a) first, $1 to the Income Unitholder;
(b) second, in or towards satisfaction of any Accrued Interest
Adjustment due and payable to the Seller in connection with the transfer of
any Mortgage Loan Rights to the Trust during the Collection Period immediately
preceding that Distribution Date;
(c) third, in or towards satisfaction pari passu and rateably
of:
(i) any amounts due and payable by the Covered Bond Guarantor
to itself as trustee of the Trust, the Bond Trustee and the Security Trustee;
(ii) any amounts due and payable to each Agent under the
provisions of the Agency Agreements;
(iii) any amounts due and payable to other third parties and
incurred without breach by the Covered Bond Guarantor of the Programme
Documents to which it is a party (and for which payment has not been provided
for elsewhere in the relevant Priorities of Payments); and
(iv) any liability of the Covered Bond Guarantor for Taxes,
and to provide for any such amounts expected to become due and payable by the
Covered Bond Guarantor in the Trust Payment Period in which such Distribution
Date occurs;
(d) fourth, in or towards satisfaction pari passu and rateably
of:
(i) any remuneration then due and payable to the Servicer and
any costs, charges, liabilities and expenses then due or to become due and
payable to the Servicer under the provisions of the Servicing Deed in the
Trust Payment Period in which such Distribution Date occurs, together with
applicable GST (or other similar Taxes) thereon;
(ii) amounts (if any) due and payable to the Account Bank
(including costs) pursuant to the terms of the Account Bank Agreement,
together with applicable GST (or other similar Taxes) thereon;
(iii) amounts due and payable to the Cover Pool Monitor pursuant
to the terms of the Cover Pool Monitor Agreement (other than the amounts
referred to in paragraph (j) below), together with applicable GST (or other
similar Taxes) thereon;
(iv) any remuneration then due and payable to the Trust Manager
and any costs, charges, liabilities and expenses then due or to become due and
payable to the Trust Manager pursuant to the Establishment Deed and the
Management Agreement in the Trust Payment Period in which such Distribution
Date occurs, together with any applicable GST (or other similar Taxes)
thereon; and
(v) any Standby Swap Provider Fee due and payable to each
Standby Swap Provider under an Interest Rate Swap Agreements, together with
applicable GST (or other similar taxes) thereon;
(e) fifth, if an Interest Rate Swap Provider is not the Issuer
or, if an Interest Rate Swap Provider is the Issuer and a Regulatory Event has
occurred or is likely to occur (as determined by the Issuer and notified to
the Covered Bond Guarantor and the Trust Manager), pari passu and rateably in
or towards payment on the Distribution Date or to provide for payment on
another date in the future of such proportion of the relevant payment falling
due in the future as the Trust Manager may reasonably determine of any amount
due or to become due and payable to each such Interest Rate Swap Provider in
respect of each relevant Interest Rate Swap (including any termination payment
due and payable by the Covered Bond Guarantor under each relevant Interest
Rate Swap Agreement but excluding any relevant Excluded Swap Termination
Amount) (except to the extent that such amounts have already been paid out of
any premium received from any replacement Interest Rate Swap Provider as
contemplated in "Cashflows - Termination Payments in respect of Swaps");
(f) sixth, in or towards payment on the Distribution Date or to
provide for payment on another date in the future of such proportion of the
relevant payments falling due in the future as the Trust Manager may
reasonably determine, pari passu and rateably of:
(i) if an Interest Rate Swap Provider is the Issuer and a
Regulatory Event has not occurred or is not likely to occur (as determined by
the Issuer and notified to the Covered Bond Guarantor and the Trust Manager),
in or towards payment on the Distribution Date or to provide for payment on
another date in the future of such proportion of the relevant payment falling
due in the future as the Trust Manager may reasonably determine of any amount
due or to become due and payable to that Interest Rate Swap Provider in
respect of each relevant Interest Rate Swap (including any termination payment
due and payable by the Covered Bond Guarantor under each relevant Interest
Rate Swap Agreement but excluding any relevant Excluded Swap Termination
Amount) (except to the extent that such amounts have already been paid out of
any premium received from any replacement Interest Rate Swap Provider as
contemplated in "Cashflows - Termination Payments in respect of Swaps");
(ii) any amounts due or to become due and payable to each
relevant Covered Bond Swap Provider (other than in respect of principal) pari
passu and rateably in respect of each Covered Bond Swap (including any
termination payment due and payable (other than in respect of principal) by
the Covered Bond Guarantor under each relevant Covered Bond Swap Agreement,
but excluding any relevant Excluded Swap Termination Amount) (except to the
extent that such amounts have already been paid out of any premium received
from any replacement Covered Bond Swap Provider as contemplated in "Cashflows
- Termination Payments in respect of Swaps") in accordance with the terms of
each relevant Covered Bond Swap Agreement; and
(iii) any interest amount due, or to become due and payable, in
respect of the Intercompany Notes, pari passu and rateably to the Intercompany
Noteholders in accordance with the terms of the Intercompany Note Subscription
Agreement, but in the case of any such payment, after taking into account any
amounts (other than principal) receivable from each relevant Covered Bond Swap
Provider under each Covered Bond Swap Agreement on the Distribution Date or
another date in the future as the Trust Manager may reasonably determine,
but, in the case of any such payment or provision, after taking into account
any amounts receivable from each relevant Interest Rate Swap Provider under
each relevant Interest Rate Swap Agreement on the Distribution Date or such
other date in the future as the Trust Manager may reasonably determine;
(g) seventh, if a Servicer Default has occurred, the remaining
Available Income Amount to be retained in the GIC Account (with a
corresponding credit to the Income Ledger) until such Servicer Default is
either remedied by the Servicer or waived by the Security Trustee (acting on
the directions of the Bond Trustee or, if no Covered Bonds are outstanding,
the Majority Secured Creditors) or a replacement servicer is appointed to
service the Mortgage Loan Rights then forming part of the Assets of the Trust
(or any relevant part);
(h) eighth, in or towards a credit to the Reserve Ledger and
retain in the GIC Account of an amount up to but not exceeding the amount by
which the Reserve Fund Required Amount exceeds the existing balance on the
Reserve Ledger as calculated on the immediately preceding Determination Date;
(i) ninth, in or towards payment pari passu and rateably of
any Excluded Swap Termination Amounts due and payable by the Covered Bond
Guarantor under the Swap Agreements (except to the extent that such amounts
have already been paid out of any premium received from any relevant
replacement Swap Providers as contemplated in "Cashflows - Termination
Payments in respect of Swaps");
(j) tenth, in or towards payment of any indemnity amount due
to the Cover Pool Monitor pursuant to the Cover Pool Monitor Agreement;
(k) eleventh, in or towards payment of any interest amounts or
any principal amount of the Demand Note relating to an Interest Rate Shortfall
Demand Note Funding due or to become due and payable in respect of the Demand
Note pursuant to the terms of the Demand Note Subscription Agreement; and
(l) twelfth, the remainder to the Income Unitholder in whole
or partial satisfaction of any entitlement to Net Trust Income of the Trust.
Allocation and Distribution of the Available Income Amount following the
service of an Asset Coverage Test Breach Notice
At any time after service on the Covered Bond Guarantor of an Asset Coverage
Test Breach Notice (which has not been revoked), but prior to the occurrence
of an Issuer Event of Default and service of an Issuer Acceleration Notice or,
if earlier, the occurrence of a Covered Bond Guarantor Event of Default and
service of a Covered Bond Guarantee Acceleration Notice on the Covered Bond
Guarantor and the Issuer, the Available Income Amount will continue to be
applied in accordance with the Pre-Issuer Event of Default Income Priority of
Payments provided that, whilst any Covered Bonds remain outstanding, the Trust
Manager will ensure that:
(a) it will not direct the Covered Bond Guarantor to apply any
moneys under paragraph (f)(iii), (k) or (l) of the Pre-Issuer Event of Default
Income Priority of Payments; and
(b) the remainder (if any) will be retained in the GIC Account
(with a corresponding credit to the Income Ledger) and form part of the
Available Income Amount on the next succeeding Distribution Date.
Allocation and Distribution of the Available Principal Amount prior to the
service of a Notice to Pay or a Covered Bond Guarantee Acceleration Notice
Prior to the service of a Notice to Pay on the Covered Bond Guarantor or a
Covered Bond Guarantee Acceleration Notice on the Covered Bond Guarantor and
the Issuer, the Available Principal Amount must be allocated and distributed
as described below.
On each Determination Date, the Trust Manager must calculate the Available
Principal Amount available for distribution on the immediately following
Distribution Date.
Pre-Issuer Event of Default Principal Priority of Payments
On each Distribution Date, the Trust Manager must direct the Covered Bond
Guarantor to and, upon receiving that direction, the Covered Bond Guarantor
will, apply the Available Principal Amount from the GIC Account (for the
avoidance of doubt, excluding any Swap Collateral Excluded Amounts due to the
relevant Swap Providers by the Covered Bond Guarantor under the relevant Swap
Agreements which will be paid, at the direction of the Trust Manager, directly
to the relevant Swap Providers in accordance with the terms of the relevant
Swap Agreements) and any In Specie Mortgage Loan Rights (but only in the case
of paragraphs (c) and (f)) in making the following payments or provisions or
credits in the following order or priority (Pre-Issuer Event of Default
Principal Priority of Payments) (in each case only if and to the extent that
payments or provisions of a higher priority have been paid in full to the
extent the same are payable on the relevant Distribution Date):
(a) first, to acquire Mortgage Loan Rights offered to the
Covered Bond Guarantor by the Seller in accordance with the terms of the
Mortgage Sale Agreement in an amount sufficient to ensure that taking into
account the other resources available to the Covered Bond Guarantor, the Asset
Coverage Test is satisfied and thereafter to acquire Substitution Assets in an
amount not to exceed the prescribed limits (as specified in the Establishment
Deed) sufficient to ensure that, after taking into account the other resources
available to the Covered Bond Guarantor, the Asset Coverage Test is satisfied;
(b) second, to retain the remaining Available Principal Amount
in the GIC Account (with a corresponding credit to the Principal Ledger) in an
amount sufficient to ensure that, taking into account the other resources
available to the Covered Bond Guarantor, the Asset Coverage Test is satisfied;
(c) third, if a Regulatory Event has occurred or is likely to
occur (as determined by the Issuer and notified to the Covered Bond Guarantor
and the Trust Manager), in or towards repayment of the principal amount of the
Demand Note which is due or to become due and payable pursuant to the terms of
the Demand Note Subscription Agreement, to the extent that such payment would
not cause the Asset Coverage Test (as determined on the immediately preceding
Determination Date) to be breached;
(d) fourth, in or towards repayment on the Distribution Date (or
to provide for repayment on another date in the future of such proportion of
the relevant payment falling due in the future as the Trust Manager may
reasonably determine) of the principal amount of the Intercompany Notes by
making the following payments:
(i) the amounts (in respect of principal) due or to become due
and payable to each relevant Covered Bond Swap Provider pari passu and
rateably in respect of each Covered Bond Swap (including any termination
payment (relating solely to principal) due and payable by the Covered Bond
Guarantor under each relevant Covered Bond Swap Agreement, but excluding any
relevant Excluded Swap Termination Amount) (except to the extent that such
amounts have already been paid out of any premium received from any
replacement Covered Bond Swap Provider in respect of the relevant Covered Bond
Swap as contemplated in "Cashflows - Termination Payments in respect of
Swaps") in accordance with the terms of each relevant Covered Bond Swap
Agreement; and
(ii) where appropriate, after taking into account any amounts in
respect of principal receivable from each relevant Covered Bond Swap Provider
under each Covered Bond Swap on the Distribution Date or another date in the
future as the Trust Manager may reasonably determine, the amounts (in respect
of principal) due or to become due and payable to the Intercompany Noteholders
pari passu and rateably in respect of each relevant Intercompany Note;
(e) fifth, pari passu and rateably, to:
(i) pay the Consideration for Mortgage Loan Rights offered to
the Covered Bond Guarantor in accordance with the Mortgage Sale Agreement
following receipt by the Seller of a notice from the Covered Bond Guarantor in
accordance with the Mortgage Sale Agreement; and
(ii) reimburse the Seller for funding any Further Advances that
the Covered Bond Guarantor has agreed to reimburse the Seller for in
accordance with the Mortgage Sale Agreement;
(f) sixth, in or towards repayment of any principal amount of
the Demand Note (other than any principal amount relating to an Interest Rate
Shortfall Demand Note Funding):
(i) which remains due and payable pursuant to clause 10.1(d)
of the Demand Note Subscription Agreement after any distribution as a result
of the Covered Bonds having been repaid and confirmation from the Issuer that
no additional Covered Bonds will be issued under the Programme;
(ii) for which a demand is made by the Demand Noteholder in
accordance with the Demand Note Subscription Agreement and at which time the
Issuer has not determined and notified the Covered Bond Guarantor and the
Trust Manager that a Regulatory Event has occurred or is likely to occur, to
the extent that such payment would not cause the Asset Coverage Test to be
breached; or
(iii) where the Issuer has determined and notified the Covered
Bond Guarantor and the Trust Manager that a Regulatory Event has occurred or
is likely to occur and an In Specie Failure has also occurred, that amount
which would otherwise have been satisfied under paragraph (c) above, to the
extent that such payment would not cause the Asset Coverage Test to be
breached;
(g) seventh, to be paid to the Income Unitholder in whole or
partial satisfaction of any entitlement to Net Trust Income of the Trust
remaining unpaid; and
(h) eighth, to be paid to the Capital Unitholders pari passu and
rateably amongst them in respect of the Capital Units.
No part of the Available Principal Amount will be applied under paragraph (c)
above by the Covered Bond Guarantor. The Trust Manager must ensure that
paragraph (c) is satisfied by an in specie distribution to the Demand
Noteholder of the In Specie Mortgage Loan Rights pursuant to the section
"Overview of the Principal Documents - Demand Note Subscription Agreement -
Repayment of the Demand Note". The Trust Manager may, but is not obliged to,
satisfy any amount payable by the Covered Bond Guarantor in accordance with
paragraph (f) by an in specie distribution to the Demand Noteholder of the In
Specie Mortgage Loan Rights pursuant to the section "Overview of the Principal
Documents - Demand Note Subscription Agreement - Repayment of the Demand
Note".
Allocation and Distribution of the Available Principal Amount following
service of an Asset Coverage Test Breach Notice
At any time after the service on the Covered Bond Guarantor of an Asset
Coverage Test Breach Notice (which has not be revoked), but prior to the
occurrence of an Issuer Event of Default and service of an Issuer Acceleration
Notice or, if earlier, the occurrence of a Covered Bond Guarantor Event of
Default and service of a Covered Bond Guarantee Acceleration Notice on the
Covered Bond Guarantor and the Issuer, the Available Principal Amount will
continue to be applied in accordance with the Pre-Issuer Event of Default
Principal Priority of Payments provided that, whilst any Covered Bonds remain
outstanding, no moneys will be applied (nor will any in specie distribution of
In Specie Mortgage Loan Rights be made) under paragraphs (a), (c), (d)(ii),
(e), (f), (g) and (h) of the Pre-Issuer Event of Default Principal Priority of
Payments, and the remainder (if any) will be retained in the GIC Account (with
a corresponding credit to the Principal Ledger) and form part of the Available
Principal Amount on the next succeeding Distribution Date.
Allocation and Distribution of the Available Income Amount and the Available
Principal Amount following service of a Notice to Pay
At any time after the service of a Notice to Pay on the Covered Bond
Guarantor, but prior to service of a Covered Bond Guarantee Acceleration
Notice on the Covered Bond Guarantor and the Issuer, the Available Income
Amount and the Available Principal Amount will be applied as described below.
Guarantee Priority of Payments
On each Distribution Date (except for amounts due to third parties described
below under paragraph (e)(ii) which in each case will be paid, at the
direction of the Trust Manager, when due, and for the avoidance of doubt, any
Swap Collateral Excluded Amounts due to the relevant Swap Providers by the
Covered Bond Guarantor under the relevant Swap Agreements which must be paid,
at the direction of the Trust Manager, directly to the relevant Swap
Providers) the Trust Manager must direct the Covered Bond Guarantor to and,
upon receiving that direction, the Covered Bond Guarantor will, apply the
Available Income Amount, the Available Principal Amount and any In Specie
Mortgage Loan Rights (but only in the case of paragraphs (c) and (q) below) to
make the following payments and provisions in the following order of priority
(Guarantee Priority of Payments) (in each case only if and to the extent that
payments or provisions of a higher priority have been made in full):
(a) first, A$1 to the Income Unitholder;
(b) second, in or towards satisfaction of any Accrued Interest
Adjustment due and payable to the Seller in connection with the transfer of
any Mortgage Loan Rights to the Trust during the Collection Period immediately
preceding that Distribution Date;
(c) third, if a Regulatory Event has occurred or is likely to
occur (as determined by the Issuer and notified to the Covered Bond Guarantor
and the Trust Manager), in or towards repayment of the principal amount of the
Demand Note which is due or to become due and payable pursuant to a demand
from the Demand Noteholder under the terms of the Demand Note Subscription
Agreement to the extent that such payment would not cause the Asset Coverage
Test (as determined on that Distribution Date) to be breached;
(d) fourth, in or towards satisfaction pari passu and rateably
of:
(i) all amounts due and payable or to become due and payable
to the Bond Trustee (excluding all amounts otherwise payable to the Covered
Bondholders and Couponholders under the Guarantee Priority of Payments) in the
Trust Payment Period in which such Distribution Date occurs together with
interest and applicable GST (or other similar Taxes) thereon;
(ii) all amounts due and payable or to become due and payable to
the Security Trustee (excluding all amounts otherwise payable to the Covered
Bondholders and Couponholders under the Guarantee Priority of Payments) in the
Trust Payment Period in which such Distribution Date occurs together with
interest and applicable GST (or other similar Taxes) thereon; and
(iii) all amounts due and payable or to become due and payable to
itself as trustee of the Trust in the Trust Payment Period in which such
Distribution Date occurs together with interest and any applicable GST
thereon;
(e) fifth, in or towards satisfaction pari passu and rateably
of:
(i) all amounts due and payable or to become due and payable
to the Agents (excluding all amounts otherwise payable to the Covered
Bondholders and Couponholders under the Guarantee Priority of Payments) in the
Trust Payment Period in which such Distribution Date occurs under the
provisions of the Agency Agreements together with applicable GST (or other
similar Taxes) thereon;
(ii) any amounts then due and payable by the Covered Bond
Guarantor to third parties and incurred without breach by the Covered Bond
Guarantor of the Programme Documents to which it is a party (and for which
payment has not been provided for elsewhere in this Guarantee Priority of
Payments) and to provide for any such amounts expected to become due and
payable by the Covered Bond Guarantor in the Trust Payment Period in which
such Distribution Date occurs; and
(iii) any liability of the Covered Bond Guarantor for Taxes;
(f) sixth, in or towards satisfaction pari passu and rateably
of:
(i) any remuneration then due and payable to the Servicer and
any costs, charges, liabilities and expenses then due or to become due and
payable to the Servicer in the Trust Payment Period in which such Distribution
Date occurs under the provisions of the Servicing Deed together with
applicable GST (or other similar Taxes) thereon;
(ii) amounts (if any) due and payable to the Account Bank
(including costs) pursuant to the terms of the Account Bank Agreement,
together with applicable GST (or other similar Taxes) thereon;
(iii) amounts due and payable to the Trust Manager under the
Establishment Deed and the Management Agreement; and
(iv) amounts due and payable to the Cover Pool Monitor (other than
the amounts referred to in paragraph (p) below) pursuant to the terms of the
Cover Pool Monitor Agreement, together with applicable GST (or other similar
Taxes) thereon;
(g) seventh, if an Interest Rate Swap Provider is not the Issuer
or, if an Interest Rate Swap Provider is the Issuer and a Regulatory Event has
occurred or is likely to occur (as determined by the Issuer and notified to
the Covered Bond Guarantor and the Trust Manager), pari passu and rateably in
or towards payment on the Distribution Date, or to provide for payment on
another date in the future of such proportion of the relevant payment falling
due in the future as the Trust Manager may reasonably determine, of any amount
due or to become due and payable to each such Interest Rate Swap Provider in
respect of each relevant Interest Rate Swap (including any termination payment
due and payable by the Covered Bond Guarantor under each relevant Interest
Rate Swap Agreement but excluding any relevant Excluded Swap Termination
Amount) (except to the extent that such amounts have been paid out of any
premium received from any relevant replacement Interest Rate Swap Providers as
contemplated in "Cashflows - Termination Payments in respect of Swaps") in
accordance with the terms of each relevant Interest Rate Swap Agreement;
(h) eighth, in or towards payment on the Distribution Date or to
provide for payment on another date in the future of such proportion of the
relevant payments falling due in the future as the Trust Manager may
reasonably determine, pari passu and rateably of:
(i) if an Interest Rate Swap Provider is the Issuer and a
Regulatory Event has not occurred or is not likely to occur (as determined by
the Issuer and notified to the Covered Bond Guarantor and the Trust Manager),
in or towards payment on the Distribution Date, or to provide for payment on
another date in the future of such proportion of the relevant payment falling
due in the future as the Trust Manager may reasonably determine, of any amount
due or to become due and payable to that Interest Rate Swap Provider in
respect of each relevant Interest Rate Swaps (including any termination
payment due and payable by the Covered Bond Guarantor under each relevant
Interest Rate Swap Agreement but excluding any relevant Excluded Swap
Termination Amount) (except to the extent that such amounts have been paid out
of any premium received from any relevant replacement Interest Rate Swap
Providers as contemplated in "Cashflows - Termination Payments in respect of
Swaps") in accordance with the terms of each relevant Interest Rate Swap
Agreement;
(ii) any amounts due or to become due and payable to each
relevant Covered Bond Swap Provider (other than in respect of principal or any
amounts due and payable in relation to the Subordinated Additional Spread)
pari passu and rateably in respect of each Covered Bond Swap (including any
termination payment due and payable by the Covered Bond Guarantor under each
relevant Covered Bond Swap Agreement, but excluding any relevant Excluded Swap
Termination Amount) (except to the extent that such amounts have already been
paid out of any premium received from any replacement Covered Bond Swap
Provider in respect of the relevant Covered Bond Swap as contemplated in
"Cashflows - Termination Payments in respect of Swaps") in accordance with the
terms of each relevant Covered Bond Swap Agreement; and
(iii) Scheduled Interest that is Due for Payment (or that will
become Due for Payment in the Trust Payment Period in which such Distribution
Date occurs) under the Covered Bond Guarantee in respect of each Series of
Covered Bonds to the Bond Trustee or (if so directed by the Bond Trustee) the
applicable Agent on behalf of the Covered Bondholders and Couponholders pari
passu and rateably in respect of each Series of Covered Bonds,
but, in the case of any such payment or provision, after taking into account
any amounts receivable from each relevant Interest Rate Swap Provider under
each relevant Interest Rate Swap Agreement and, if applicable, any amounts
(other than principal) receivable from each relevant Covered Bond Swap
Provider under each Covered Bond Swap Agreement on the Distribution Date or
another date in the future as the Trust Manager may reasonably determine,
provided that if the amount available for distribution under this paragraph
(h) (excluding any amounts received or to be received from the relevant
Covered Bond Swap Providers) would be insufficient to pay the Australian
Dollar Equivalent of the Scheduled Interest that is or will be Due for Payment
in respect of each Series of Covered Bonds under paragraph (h)(iii) above, the
shortfall will be divided amongst all such Series of Covered Bonds on a pari
passu and rateable basis and the amount payable by the Covered Bond Guarantor
to each relevant Covered Bond Swap Provider under each relevant Covered Bond
Swap in respect of each relevant Series of Covered Bonds or provision to be
made in respect of such amount under paragraph (h)(ii) above will be
correspondingly reduced to take into account the shortfall applicable to the
Covered Bonds in respect of which such payment is to be made;
(i) ninth, in or towards a credit to the Reserve Ledger and
retain in the GIC Account of an amount up to but not exceeding the amount by
which the Reserve Fund Required Amount exceeds the existing balance on the
Reserve Ledger as calculated on the immediately preceding Determination Date;
(j) tenth, to the extent only that the Available Income Amount
available for distribution on that Distribution Date exceeds the aggregate of
the payments and provisions to be made on the Distribution Date pursuant to
paragraph (a) to paragraph (i) above (inclusive, but excluding paragraph (c)
above), in or towards payment on that Distribution Date or to provide for
payment in the immediately following Trust Payment Period, of any amounts due
or to become due and payable to any relevant Covered Bond Swap Provider
relating to the Subordinated Additional Spread and any such amounts remaining
unpaid from prior Distribution Dates, pari passu and rateably in respect of
each relevant Covered Bond Swap in accordance with the relevant Covered Bond
Swap Agreement;
(k) eleventh, in or towards payment on the Distribution Date or
to provide for payment in the immediately succeeding Trust Payment Period,
pari passu and rateably of:
(i) any amounts (in respect of principal) due or to become due
and payable to each relevant Covered Bond Swap Provider pari passu and
rateably in respect of each relevant Covered Bond Swap (including any
termination payment due and payable by the Covered Bond Guarantor under each
relevant Covered Bond Swap Agreement to the extent not already paid under
paragraph (h)(ii) above, but excluding any relevant Excluded Swap Termination
Amount) (except to the extent that such amounts have already been paid out of
any premium received from any replacement Covered Bond Swap Provider in
respect of the relevant Covered Bond Swap as contemplated in "Cashflows -
Termination Payments in respect of Swaps") in accordance with the terms of
each relevant Covered Bond Swap Agreement;
(ii) (where appropriate, after taking into account any amounts
in respect of principal receivable from the relevant Covered Bond Swap
Provider and available to make payments in respect thereof) Scheduled
Principal that is Due for Payment (or that will become Due for Payment in the
immediately succeeding Trust Payment Period) under the Covered Bond Guarantee
in respect of each Series of Covered Bonds to the Bond Trustee or (if so
directed by the Bond Trustee) the applicable Agent on behalf of the Covered
Bonds pari passu and rateably in respect of each Series of Covered Bonds; and
(iii) the Final Redemption Amount (or portion of the Final
Redemption Amount remaining unpaid) of any Series of Covered Bonds to which an
Extended Due for Payment Date applies and (where relevant) whose Final
Redemption Amount was not paid in full by the Extension Determination Date, by
making the following payments, pari passu and rateably (by reference to the
Australian Dollar Equivalent of the Principal Amount Outstanding of all such
Covered Bonds):
(A) any amounts due or to become due and payable to each
relevant Covered Bond Swap Provider (whether or not in respect of principal
and other than any amounts due and payable in relation to the Subordinated
Additional Spread) pari passu and rateably in respect of each Covered Bond
Swap (including any termination payment due and payable by the Covered Bond
Guarantor under each relevant Covered Bond Swap Agreement, but excluding any
relevant Excluded Swap Termination Amount) (except to the extent that such
amounts have already been paid out of any premium received from any
replacement Covered Bond Swap Provider in respect of the relevant Covered Bond
Swap as contemplated in "Cashflows - Termination Payments in respect of
Swaps") in accordance with the terms of the relevant Covered Bond Swap
Agreement; and
(B) such Final Redemption Amount pari passu and rateably under
the Covered Bond Guarantee in respect of each relevant Series of Covered Bonds
to the Bond Trustee or (if so directed by the Bond Trustee) the applicable
Agent on behalf of the Covered Bondholders,
but, in the case of any such payment or provision, after taking into account
any amounts receivable from each relevant Interest Rate Swap Provider in
respect of each relevant Interest Rate Swap Agreement and, if applicable, any
amounts (whether or not in respect of principal) receivable from each relevant
Covered Bond Swap Provider in respect of each relevant Covered Bond Swap,
provided that if the amount available for distribution under this paragraph
(k) (excluding any amounts received or to be received from each relevant
Covered Bond Swap Provider) would be insufficient to pay the Australian Dollar
Equivalent of the Scheduled Principal that is or will be Due for Payment in
respect of each Series of Covered Bonds under paragraph (k)(ii) above and the
Australian Dollar Equivalent of such Final Redemption Amount in respect of the
relevant Series of Covered Bonds under paragraph (k)(iii)(B) above, the
shortfall will be divided amongst all such Series of Covered Bonds on a pari
passu and rateable basis and the amount payable by the Covered Bond Guarantor
to each relevant Covered Bond Swap Provider under each relevant Covered Bond
Swap in respect of each relevant Series of Covered Bonds or provision to be
made in respect thereof under paragraph (k)(i) and paragraph (k)(iii)(A) above
will be correspondingly reduced to take into account the shortfall applicable
to the Covered Bonds in respect of which such payment is to be made;
(l) twelfth, to retain the remaining moneys in the GIC Account
for application on the immediately succeeding Distribution Date in accordance
with the priority of payments described in paragraphs (a) to (k) (inclusive)
above, until the Covered Bonds have been fully repaid or provided for (such
that the Required Redemption Amount has been accumulated in respect of each
outstanding Series of Covered Bonds);
(m) thirteenth, to the extent not already paid in accordance with
paragraphs (a) to (l) (inclusive) above, in or towards payment on the
Distribution Date or to provide for payment in the immediately following Trust
Payment Period, of any amounts due or to become due and payable to any
relevant Covered Bond Swap Provider relating to the Subordinated Additional
Spread pari passu and rateably in respect of each relevant Covered Bond Swap
in accordance with the relevant Covered Bond Swap Agreement;
(n) fourteenth, in or towards, payment pari passu and rateably,
of any Excluded Swap Termination Amounts due and payable by the Covered Bond
Guarantor under the Swap Agreements (except to the extent that such amounts
have already been paid out of any premium received from any relevant
replacement Swap Provider as contemplated in "Cashflows - Termination Payments
in respect of Swaps");
(o) fifteenth, in and towards payment of any amounts due and
payable (whether in respect of principal or interest) in respect of the
Intercompany Notes pari passu and rateably in respect of each Intercompany
Note pursuant to the terms of the Intercompany Note Subscription Agreement;
(p) sixteenth, in or towards payment of certain costs, expenses
and indemnity amounts due by the Covered Bond Guarantor to the Cover Pool
Monitor pursuant to the Cover Pool Monitor Agreement;
(q) seventeenth, in or towards satisfaction of all amounts due
and payable in respect of the Demand Note or otherwise outstanding under the
Demand Note Subscription Agreement (to the extent not already satisfied in
accordance with paragraph (c) above) including upon the occurrence of a
Regulatory Event and an In Specie Failure, any amounts that would otherwise
have been satisfied under paragraph (c) above;
(r) eighteenth, to be paid to the Income Unitholder in whole or
partial satisfaction of any entitlement to Net Trust Income of the Trust
remaining unpaid; and
(s) nineteenth, to be paid to the Capital Unitholders pari passu
and rateably amongst them in respect of the Capital Units.
No part of the Available Income Amount and Available Principal Amount will be
applied under paragraph (c) above by the Covered Bond Guarantor. The Trust
Manager must ensure that paragraph (c) is satisfied by an in specie
distribution to the Demand Noteholder of the In Specie Mortgage Loan Rights
pursuant to the section "Overview of the Principal Documents - Demand Note
Subscription Agreement - Repayment of the Demand Note". The Trust Manager
may, but is not obliged to, satisfy any amount payable by the Covered Bond
Guarantor in accordance with paragraph (q) by an in specie distribution to the
Demand Noteholder of the In Specie Mortgage Loan Rights pursuant to the
section "Overview of the Principal Documents - Demand Note Subscription
Agreement - Repayment of the Demand Note".
Amounts received on or after the Distribution Date
(a) Subject to paragraph (c) below, any amounts (other than in
respect of principal and any Swap Collateral Excluded Amounts) received by or
on behalf of the Covered Bond Guarantor under a Covered Bond Swap Agreement on
or after a Distribution Date but prior to the immediately succeeding
Distribution Date will be applied by the Covered Bond Guarantor (acting at the
direction of the Trust Manager), together with any provision for such payments
made on any preceding Distribution Date, to make payments (other than
principal) due and payable pari passu and rateably in respect of each Covered
Bond Swap under the relevant Covered Bond Swap Agreement or, as the case may
be, in respect of interest on each relevant Intercompany Note in accordance
with the Intercompany Note Subscription Agreement, or otherwise to make
provision for such payments on such date in the future of such proportion of
the relevant payment falling due in the future as the Trust Manager may
reasonably determine.
(b) Subject to paragraph (c) below, any amounts (other than any
Swap Collateral Excluded Amounts) in respect of principal received by or on
behalf of the Covered Bond Guarantor under a Covered Bond Swap Agreement on or
after a Distribution Date but prior to the immediately succeeding Distribution
Date will be applied, by the Covered Bond Guarantor (acting at the direction
of the Trust Manager), together with any provision for such payments made on
any preceding Distribution Date, (provided that all principal amounts
outstanding under the related Series of Covered Bonds which have fallen due
for repayment on such date have been repaid in full by the Issuer), to make
payments in respect of principal due and payable to the Intercompany
Noteholders in respect of the corresponding Intercompany Notes in accordance
with the Intercompany Note Subscription Agreement or otherwise to make
provision for such payments on such date in the future of such proportion of
the relevant payment falling due in the future as the Trust Manager may
reasonably determine.
(c) At any time after the service of a Notice to Pay on the
Covered Bond Guarantor, but prior to service of a Covered Bond Guarantee
Acceleration Notice on the Covered Bond Guarantor and the Issuer, any amounts
(other than any Swap Collateral Excluded Amounts) received by or on behalf of
the Covered Bond Guarantor under a Covered Bond Swap Agreement (whether or not
in respect of principal) on or after a Distribution Date but prior to the
immediately succeeding Distribution Date will be applied, by the Covered Bond
Guarantor (acting at the directions of the Trust Manager) together with any
provision for such payments made on any preceding Distribution Date, to make
payments of Scheduled Interest or Scheduled Principal under the Covered Bond
Guarantee pari passu and rateably in respect of each relevant Series of
Covered Bonds.
(d) Any amounts (other than in respect of principal and any Swap
Collateral Excluded Amounts) received by or on behalf of the Covered Bond
Guarantor under a Covered Bond Swap Agreement on or after a Distribution Date
but prior to the immediately succeeding Distribution Date that are not applied
towards a payment or provision in accordance with paragraph (f) of the
Pre-Issuer Event of Default Income Priority of Payments, paragraphs (h), (j)
or (k) of the Guarantee Priority of Payments or paragraphs (a) or (c) above,
will be credited (acting at the direction of the Trust Manager) to the Income
Ledger, deposited into the GIC Account (acting at the direction of the Trust
Manager) and form part of the Available Income Amount to be applied (acting at
the direction of the Trust Manager) on that Distribution Date (if received on
that day) or on the immediately succeeding Distribution Date (if received
after that day).
(e) Any amounts (other than any Swap Collateral Excluded
Amounts) of principal received under a Covered Bond Swap Agreement on a
Distribution Date or any date prior to the immediately succeeding Distribution
Date which are not applied towards a payment or provision in accordance with
paragraph (d) of the Pre-Issuer Event of Default Principal Priority of
Payments, paragraph (k) of the Guarantee Priority of Payments or paragraphs
(b) or (c) above, will be credited (acting at the direction of the Trust
Manager) into the GIC Account and will form part of the Available Principal to
be applied (acting at the direction of the Trust Manager) on that Distribution
Date (if received on that day) or on the immediately succeeding Distribution
Date (if received after that day).
(f) Any amounts of principal received from the Seller in respect
of a surrender or an extinguishment of the Seller's interest in, or transfer
by the Seller of, Mortgage Loan Rights to enable the Covered Bond Guarantor
(acting at the direction of the Trust Manager) to apply such amounts to repay
any relevant Intercompany Notes on the date on which the Covered Bonds
corresponding to such Intercompany Notes mature will not be applied in
accordance with the Pre-Issuer Event of Default Principal Priority of Payments
and will (after being swapped if necessary under the relevant Covered Bond
Swaps) be applied or be deemed to be applied by the Covered Bond Guarantor
(acting at the direction of the Trust Manager) in repayment of the relevant
Intercompany Notes on the date on which the Covered Bonds corresponding to
such Intercompany Notes mature, subject to the Asset Coverage Test being
satisfied on the date of such repayment and after giving effect to such
repayment after taking into account amounts that will be paid or provided for
on the immediately following Distribution Date.
Termination payments in respect of Swaps
If the Covered Bond Guarantor receives any termination payment from a Swap
Provider in respect of a Swap, the Trust Manager will direct the Covered Bond
Guarantor to use such termination payment (prior to the occurrence of a
Covered Bond Guarantor Event of Default and service of a Covered Bond
Guarantee Acceleration Notice on the Covered Bond Guarantor and the Issuer and
only at the direction of the Trust Manager) first towards the payment to a
replacement Swap Provider to enter into a replacement Swap with the Covered
Bond Guarantor, unless a replacement Swap has already been entered into on
behalf of the Covered Bond Guarantor in which case the Trust Manager will
direct the Covered Bond Guarantor to apply the termination payment in
accordance with the applicable Priorities of Payments and in the case that the
full amount of the termination payment is not required to pay the replacement
Swap Provider, the remaining part of the termination payment will be applied
in accordance with the applicable Priorities of Payments. If the Covered
Bond Guarantor receives any premium from a replacement Swap Provider in
respect of a replacement Swap, the Trust Manager will direct the Covered Bond
Guarantor to, and the Covered Bond Guarantor must, use that premium to make
any termination payment due and payable by the Covered Bond Guarantor with
respect to the previous Swap (and, for the avoidance of doubt, the amount of
that premium used to pay the applicable termination payment will not form part
of the Available Income Amount or the Available Principal Amount to the extent
it is used to make such payment to such previous Swap Provider), unless that
termination payment has already been made by or on behalf of the Covered Bond
Guarantor in which case the premium will be applied in accordance with the
applicable Priority of Payments. If the full amount of the premium from a
replacement Swap Provider in respect of a replacement Swap is not applied in
accordance with this paragraph (b) to pay the termination payment due to a
previous Swap Provider, the remaining part of the premium will form part of
the Available Income Amount, the Available Principal Amount or moneys
available for distribution in accordance with the Post-Enforcement Priority of
Payments, as applicable, to be applied in accordance with the applicable
Priority of Payments.
Application of moneys received by the Security Trustee following the service
of a Covered Bond Guarantee Acceleration Notice
From and including the time when the Bond Trustee serves a Covered Bond
Guarantee Acceleration Notice on the Covered Bond Guarantor and the Issuer, no
amount may be withdrawn from the Trust Accounts without the prior written
consent of the Security Trustee.
Post-Enforcement Priority of Payments
All moneys received or recovered by the Security Trustee or any Receiver
(excluding all amounts due or to become due in respect of any Third Party
Amounts and excluding any Swap Collateral Excluded Amounts due to the relevant
Swap Providers by the Covered Bond Guarantor, under the relevant Swap
Agreements which will be paid directly to the relevant Swap Providers in
accordance with the terms of the relevant Swap Agreements) and any In Specie
Mortgage Loan Rights (but only in the case of paragraphs (e) and (j)), after
the service of a Covered Bond Guarantee Acceleration Notice, for the benefit
of the Secured Creditors in respect of the Secured Obligations, will be held
by it in the Trust Accounts on trust to be applied, in the following order of
priority (and, in each case, only if and to the extent that payments or
provisions of a higher order of priority have been made in full) (the
Post-Enforcement Priority of Payments):
(a) first, in or towards satisfaction of any Accrued Interest
Adjustment outstanding to the Seller in connection with the transfer of any
Mortgage Loan Rights to the Trust;
(b) second, in or towards satisfaction pari passu and rateably
of:
(i) all amounts due and payable or to become due and payable
to the Bond Trustee under the provisions of the Bond Trust Deed (but not
including amounts otherwise payable to Covered Bondholders under this
Post-Enforcement Priority of Payments) together with interest and any
applicable GST (or similar Taxes) thereon;
(ii) all amounts due and payable or to become due and payable to
the Security Trustee and any Receiver (but not including amounts otherwise
payable to Covered Bondholders under this Post-Enforcement Priority of
Payments) together with interest and any applicable GST (or similar Taxes)
thereon;
(iii) all amounts due and payable or to become due and payable to
the Covered Bond Guarantor together with interest and any applicable GST (or
similar Taxes) thereon; and
(iv) all amounts due and payable to the Agents under or pursuant
to the Agency Agreements together with any applicable GST (or similar Taxes)
thereon;
(c) third, in or towards satisfaction pari passu and rateably
of:
(i) any remuneration then due and payable to the Servicer and
any costs, charges, liabilities and expenses then due or to become due and
payable to the Servicer under the provisions of the Servicing Deed, together
with any applicable GST (or other similar Taxes) thereon;
(ii) amounts due to the Account Bank (including any costs,
charges, liabilities and expenses) pursuant to the terms of the Account Bank
Agreement, together with any applicable GST (or other similar Taxes) thereon;
(iii) any remuneration then due and payable to the Trust Manager
and any costs, charges, liabilities and expenses then due or to become due and
payable to the Trust Manager under the provisions of the Establishment Deed
and the Management Agreement in the Trust Payment Period during which the
application of moneys is made, together with any applicable GST (or other
similar Taxes) thereon; and
(iv) any Standby Swap Provider Fee due and payable to each Standby
Swap Provider under an Interest Rate Swap Agreements, together with applicable
GST (or other similar taxes) thereon;
(d) fourth, if an Interest Rate Swap Provider is not the Issuer
or, if an Interest Rate Swap Provider is the Issuer and a Regulatory Event has
occurred or is likely to occur (as determined by the Issuer and notified to
the Covered Bond Guarantor and the Trust Manager), pari passu and rateably in
or towards satisfaction of any amounts due and payable to each such the
Interest Rate Swap Provider (including any termination payment, but excluding
any relevant Excluded Swap Termination Amount) (except to the extent that such
amounts have already been paid out of any premium received from any
replacement Interest Rate Swap Provider in respect of the relevant Covered
Bond Swap as contemplated in "Cashflows - Termination Payments in respect of
Swaps") pursuant to the terms of each relevant Interest Rate Swap Agreement;
(e) fifth, if a Regulatory Event has occurred or is likely to
occur (as determined by the Issuer and notified to the Security Trustee or any
Receiver and the Trust Manager), subject to the Asset Coverage Test (as
determined at the time of any distribution in accordance with this paragraph
(e)) being met, in or towards satisfaction of any amounts due and payable in
respect of the Demand Note pursuant to the terms of the Demand Note
Subscription Agreement;
(f) sixth, in or towards satisfaction of pari passu and rateably
of:
(i) if an Interest Rate Swap Provider is the Issuer and a
Regulatory Event has not occurred or is not likely to occur (as determined by
the Issuer and notified to the Covered Bond Guarantor and the Trust Manager),
in or towards satisfaction of any amounts due and payable to that Interest
Rate Swap Provider (including any termination payment, but excluding any
relevant Excluded Swap Termination Amount) (except to the extent that such
amounts have already been paid out of any premium received from any
replacement Interest Rate Swap Provider in respect of the relevant Covered
Bond Swap as contemplated in "Cashflows - Termination Payments in respect of
Swaps") pursuant to the terms of each relevant Interest Rate Swap Agreement;
(ii) any amounts due and payable to each relevant Covered Bond
Swap Provider pari passu and rateably in respect of each Covered Bond Swap
(including any termination payment due and payable by the Covered Bond
Guarantor under each relevant Covered Bond Swap Agreement, but excluding any
relevant Excluded Swap Termination Amount or any amounts due and payable in
relation to the Subordinated Additional Spread) (except to the extent that
such amounts have already been paid out of any premium received from any
replacement Covered Bond Swap Provider in respect of the relevant Covered Bond
Swap as contemplated in "Cashflows - Termination Payments in respect of
Swaps") in accordance with the terms of each relevant Covered Bond Swap
Agreement; and
(iii) the amounts due and payable under the Covered Bond
Guarantee, to the Bond Trustee or (if so directed by the Bond Trustee) the
relevant Agent on behalf of the Covered Bondholders pari passu and rateably in
respect of interest and principal due and payable on each Series of Covered
Bonds,
provided that if the amount available for distribution under this paragraph
(f) (excluding any amounts received from the Covered Bond Swap Provider) would
be insufficient to pay the Australian Dollar Equivalent of the amounts due and
payable under the Covered Bond Guarantee in respect of each Series of Covered
Bonds under paragraph (f)(iii) above, the shortfall will be divided amongst
all such Series of Covered Bonds on a pari passu and rateable basis and any
amount payable by the Covered Bond Guarantor to each relevant Covered Bond
Swap Provider under each relevant Covered Bond Swap in respect of each
relevant Series of Covered Bonds or provision to be made in respect thereof
under paragraph (f)(ii) above will be correspondingly reduced to take account
of the shortfall applicable to the Covered Bonds in respect of which such
payment is to be made;
(g) seventh, in or towards satisfaction pari passu and rateably
of any amounts due and payable by the Covered Bond Guarantor to any relevant
Covered Bond Swap Provider relating to the Subordinated Additional Spread pari
passu and rateably in respect of each relevant Covered Bond Swap in accordance
with the relevant Covered Bond Swap Agreement;
(h) eighth, in or towards satisfaction pari passu and rateably
according to the respective amounts thereof, of any Excluded Swap Termination
Amounts due and payable by the Covered Bond Guarantor under the Swap
Agreements;
(i) ninth, in or towards satisfaction of all amounts due and
payable in respect of the Intercompany Notes or otherwise outstanding under
the Intercompany Note Subscription Agreement;
(j) tenth, in or towards satisfaction of all amounts due and
payable in respect of the Demand Note or otherwise outstanding under the
Demand Note Subscription Agreement (to the extent not already satisfied in
accordance with paragraph (e) above) including upon the occurrence of a
Regulatory Event and an In Specie Failure, any amounts that would otherwise
have been satisfied under paragraph (e) above;
(k) eleventh, to be paid to the Income Unitholder in whole or
partial satisfaction of any entitlement to Net Trust Income of the Trust
remaining unpaid; and
(l) twelfth, to be paid to the Capital Unitholders pari passu
and rateably amongst them in respect of the Capital Units.
No monies will be applied under paragraph (e) above by the Security Trustee
and any Receiver. The Security Trustee and any Receiver must ensure that
paragraph (e) is satisfied by an in specie distribution to the Demand
Noteholder of the In Specie Mortgage Loan Rights pursuant to the section
"Overview of the Principal Documents - Demand Note Subscription Agreement -
Repayment of the Demand Note". The Security Trustee and any Receiver may,
but is not obliged to, satisfy any amount payable by the Covered Bond
Guarantor in accordance with paragraph (j) by an in specie distribution to the
Demand Noteholder of the In Specie Mortgage Loan Rights pursuant to the
section "Overview of the Principal Documents - Demand Note Subscription
Agreement - Repayment of the Demand Note".
The Mortgage Loan Rights
The Mortgage Loan Rights forming part of the Assets of the Trust acquired by
the Covered Bond Guarantor consist of Mortgage Loan Rights sold by the Seller
to the Covered Bond Guarantor from time to time, in accordance with the terms
of the Mortgage Sale Agreement, as more fully described under "Overview of the
Principal Documents - Mortgage Sale Agreement".
Any schedule of Mortgage Loan Rights attached to any Sale Notice may be
provided in a document stored upon electronic media (including, but not
limited to, electronic mail and CD-ROM).
See also the following risk factors under "Risk Factors - Risk Factors related
to the Covered Bond Guarantor - Covered Bondholders receive a limited
description of the Mortgage Loan Rights" and "Risk Factors - Risk Factors
related to the Covered Bond Guarantor - Maintenance of the Mortgage Loan
Rights" and of this Prospectus.
Description of the Covered Bond Provisions of the Australian Banking Act
The Banking Amendment (Covered Bonds) Act 2011 (Cth) (the Amendment Act) came
into force on 17 October 2011 and amended the Australian Banking Act to
specifically facilitate the issuance of covered bonds by Australian Authorised
Deposit-Taking Institutions (ADIs). The Amendment Act sets out a detailed
regulatory framework for the issuance of covered bonds (the Covered Bonds
Provisions). At the date of this Prospectus, there are no regulations in
support of the Covered Bonds Provisions. To facilitate the issuance of Covered
Bonds in Australia, APRA has amended Australian Prudential Standard 120. On 12
July 2012, APRA issued a final prudential standard (Prudential Standard APS
121 Covered Bonds) setting out the prudential requirements that apply to ADIs
that issue covered bonds in accordance with the Covered Bonds Provisions and
the capital treatment of covered bonds for ADIs that invest in covered bonds.
The standard became effective on 1 August 2012. APRA has indicated that the
requirements under the standard are aimed at ensuring ADIs adopt prudent
practices when issuing covered bonds to manage risks associated with exposures
to a covered bond special purpose vehicle. The standard also governs the
capital treatment for an issuing ADI of the assets in covered bond programmes.
Eligible issuers
The Australian Banking Act allows for ADIs that are regulated by APRA to issue
covered bonds subject to compliance with the requirements of the Australian
Banking Act. Any such covered bonds must be secured by assets beneficially
owned by a covered bond special purpose vehicle. The Covered Bond Guarantor
is a "covered bond special purpose vehicle" for the purposes of the Australian
Banking Act.
Cap on issuance
Under the Australian Banking Act, an ADI is precluded from issuing covered
bonds if, at the time of issuance, the value of the assets in all Cover Pools
(as defined below) maintained by the ADI exceeds 8 per cent. (or such other
percentage prescribed by regulation for the purposes of section 28 of the
Australian Banking Act) of the ADI's assets in Australia at that time.
Cover Pool and Eligible assets
The Australian Banking Act provides that the cover pool for covered bonds
consists of the assets beneficially owned by the covered bond special purpose
vehicle to the extent that they secure the liabilities to the covered
bondholders equally or in priority to any other liabilities (Cover Pool). It
also sets out the assets eligible for inclusion in a cover pool held by the
covered bond special purpose vehicle for the purposes of securing covered
bonds issued by an ADI. Accordingly, the assets in a Cover Pool must
comprise of one or more of the following types of assets:
(a) at call deposits held with an ADI and convertible into cash
within two business days;
(b) bank accepted bills or certificates of deposit not issued by
the Issuer that are eligible for repurchase transactions with the RBA and
mature within 100 days;
(c) government debt instruments issued or guaranteed by the
Commonwealth, a State or a Territory;
(d) residential mortgage loans;
(e) commercial mortgage loans;
(f) mortgage insurance policies or other assets related to a
loan referred to in paragraphs (d) and (e) above;
(g) a contractual right relating to the holding or management of
another asset in the Cover Pool;
(h) certain types of derivatives; and
(i) any other asset prescribed from time to time by regulation
for the purposes of section 31(1)(i) of the Australian Banking Act.
The value of assets in the Cover Pool which are bank accepted bills or
certificates of deposit as described in paragraph (b) above must not exceed 15
per cent. of the face value of the covered bonds. There is no such limit in
relation to the other types of assets set out above.
Further, the Cover Pool must not contain an asset of a kind prescribed by
regulation for the purposes of section 31(3) of the Australian Banking Act.
There are currently no assets prescribed by regulation.
The Covered Bonds Provisions expressly provide that a statutory manager or an
external administrator of the issuing ADI has no powers in relation to the
assets in the cover pool apart from any contractual powers that the ADI may
have and the contractual obligations of the issuing ADI in relation to the
assets.
Any Swap Collateral Excluded Amount will not form part of the Cover Pool and
will be paid to the relevant Swap Provider directly and not via the Priorities
of Payments.
APRA's powers under the Australian Banking Act
In addition to the powers that APRA had in relation to an ADI under the
Australian Banking Act prior to the enactment of the Covered Bonds Provisions,
the Amendment Act has given APRA specific powers relating to covered bond
issuances. Those powers include the following:
(a) No issue: APRA has the power to direct an issuing ADI not to
issue covered bonds where APRA gives a direction under section 11CA of the
Australian Banking Act or in circumstances where APRA has reason to believe
that the ADI has contravened the Covered Bonds Provisions, the Australian
Banking Act, a prudential requirement, regulation or a prudential standard
relating to covered bonds.
(b) No top-up: APRA has the power to direct the issuing ADI, in
certain circumstances, not to transfer any asset to the covered bond special
purpose vehicle. The relevant circumstances in which APRA may exercise such
a power include where APRA has reason to believe that the issuing ADI is
unable to meet its liabilities, there has been a material deterioration in the
issuing ADI's financial condition, the issuing ADI is conducting its affairs
in an improper or financially unsound way, the failure to issue a direction
would materially prejudice the interests of the issuing ADI's depositors or
the issuing ADI is conducting its affairs in a way that may cause or promote
instability of the Australian financial system.
Further, APRA also has the power to direct a covered bond special purpose
vehicle in certain circumstances to return assets to the issuing ADI which do
not secure covered bond liabilities. A covered bond liability does not
include a liability to the issuing ADI (other than a liability in respect of
derivatives and for the provision of services) which is secured in priority to
any liability to covered bondholders. However, as described under "Cover
Pool and Eligible assets" above, to the extent that assets secure the covered
bond liabilities of the issuing ADI, the Covered Bonds Provisions expressly
provide that a statutory manager or an external administrator of the issuing
ADI has no powers in relation to those assets.
For a more detailed description of APRA's powers and the potential
consequences for the programme, see "Risk Factors - General Risk Factors -
APRA's powers under the Australian Banking Act" above.
Maintenance of the Cover Pool
The Covered Bonds Provisions require the issuing ADI to maintain the value of
the Cover Pool at an amount which is no less than a specified minimum. The
issuing ADI must ensure that the value of the assets in the Cover Pool is at
least 103 per cent. of the face value of the outstanding covered bonds. For
the purpose of calculating the value of the assets in the Cover Pool, the
Australian Banking Act imposes a maximum loan to value ratio of no greater
than 80 per cent. in respect of loans secured by a mortgage over residential
property and a maximum loan to value ratio of no greater than 60 per cent. in
respect of loans secured by a mortgage over commercial property, in each case,
taking into account any prior or equal ranking loans secured by that property.
The Australian Banking Act does not specify a maximum level of
over-collateralisation which affords ADIs the flexibility to determine the
appropriate level of over-collateralisation. However APRA has the power to
prevent an ADI from maintaining the Cover Pool in particular circumstances,
such as where the ADI is facing financial difficulty. See "Risk Factors -
General Risk Factors - APRA's powers under the Australian Banking Act" above.
Cover Pool Monitor
The Covered Bonds Provisions require a cover pool monitor to be appointed in
respect of the Cover Pool securing the covered bonds issued by an ADI. The
cover pool monitor must be an auditor registered under the Corporations Act,
the holder of an Australian financial services licence (AFSL) covering the
provision of financial services as a cover pool monitor or be exempt from
holding such an AFSL. The issuing ADI or an associated entity (as defined in
the Corporations Act) of the issuing ADI is not permitted to be the cover pool
monitor.
The functions of the cover pool monitor include, amongst others:
(a) to assess the maintenance of an accurate register by the ADI
or the covered bond special purpose vehicle of the assets in the Cover Pool
every six months;
(b) to assess the ADI's compliance with the requirement to
maintain the value of the Cover Pool as described above in "- Maintenance of
the Cover Pool" above and that the assets in the Cover Pool are eligible
assets as described in "- Cover Pool and Eligible assets" every six months;
and
(c) to provide reports in respect of these functions to the ADI
and, upon request, to APRA.
Book-Entry Clearance Systems
The information set out below is subject to any change in or reinterpretation
of the rules, regulations and procedures of the Clearing Systems currently in
effect. The information in this section concerning the Clearing Systems has
been obtained from sources that the Issuer believes to be reliable, but none
of the Issuer, the Covered Bond Guarantor, the Bond Trustee, the Agents nor
any Dealer takes any responsibility for the accuracy thereof. Investors
wishing to use the facilities of any of the Clearing Systems are advised to
confirm the continued applicability of the rules, regulations and procedures
of the relevant Clearing System. None of the Issuer, the Covered Bond
Guarantor nor any other party to the Agency Agreements will have any
responsibility or liability for any aspect of the records relating to, or
payments made on account of, beneficial ownership interests in the Covered
Bonds held through the facilities of any Clearing System or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
Book-entry Systems
Clearing and settlement in Australia
Upon the issuance of an A$ Registered Covered Bond, the Issuer will (unless
otherwise agreed with the Covered Bondholder including by specification of
such in the relevant Final Terms) procure that the A$ Registered Covered Bond
is entered into the Austraclear System. Upon entry, Austraclear will become
the sole registered holder (Registered Holder) of the A$ Registered Covered
Bond.
Members of the Austraclear System (Accountholders) may acquire rights against
the Registered Holder in relation to an A$ Registered Covered Bond entered in
the Austraclear System. If potential investors are not Accountholders, they
may hold their interest in the relevant A$ Registered Covered Bond through a
nominee who is an Accountholder. All payments in respect of A$ Registered
Covered Bonds entered in the Austraclear System will be made directly to an
account of the Registered Holder or as it directs in accordance with the
Austraclear Regulations.
Secondary market transfers
Secondary market transfers of A$ Registered Covered Bonds held in the
Austraclear System will be conducted in accordance with the Austraclear
Regulations and the A$ Registry Agreement.
Relationship of Accountholders with the Registered Holder
Each of the persons shown in the records of the Austraclear System as having
an interest in an A$ Registered Covered Bond issued by the Issuer must look
solely to Austraclear for such person's share of each payment made to the
Registered Holder in respect of that A$ Registered Covered Bond and to any
other rights arising under that A$ Registered Covered Bond, subject to and in
accordance with the Austraclear Regulations. Unless and until such A$
Registered Covered Bond Covered Bonds are uplifted from the Austraclear System
and registered in the name of an Accountholder, such person has no claim
directly against the Issuer or the Covered Bond Guarantor in respect of
payments by the Issuer or the Covered Bond Guarantor and such obligations of
the Issuer or the Covered Bond Guarantor will be discharged by payment to the
Registered Holder (or as it directs) in respect of each amount so paid.
Where a Registered Holder is registered as the holder of A$ Registered Covered
Bonds that are lodged in the Austraclear System, the Registered Holder may, in
its absolute discretion, instruct the A$ Registrar to transfer or "uplift" the
A$ Registered Covered Bonds to the person in whose "Security Record" (as
defined in the Austraclear Regulations) those A$ Registered Covered Bonds are
recorded without any consent or action of such transferee and, as a
consequence, remove those A$ Registered Covered Bonds from the Austraclear
System.
Austraclear and Cross-Trading with Euroclear and Clearstream
Subject to the rules of the relevant clearing and settlement system, Covered
Bondholders may elect to hold interests in A$ Registered Covered Bonds (i)
directly through the Austraclear System, (ii) indirectly through Euroclear or
Clearstream if they are participants in such systems or (iii) indirectly
through organisations which are participants in the Austraclear System,
Euroclear or Clearstream Luxembourg. The Issuer has been advised that
Euroclear and Clearstream, Luxembourg will hold interests on behalf of their
participants through customers' securities accounts in their respective names
on the books of their respective Australian sub-custodians, which in turn will
hold such interests in customers' securities accounts in the names of the
Australian sub-custodians. The rights of a holder of interests in A$
Registered Covered Bonds held through Euroclear or Clearstream, Luxembourg are
subject to the respective rules and regulations for accountholders of
Euroclear and Clearstream, Luxembourg, the terms and conditions of agreements
between Euroclear and Clearstream, Luxembourg and their respective nominee and
the Austraclear Regulations. Participants in any of such systems should
contact the relevant clearing system(s) if they have any questions in relation
to clearing, settlement and cross-market transfers and/or trading.
Euroclear and Clearstream, Luxembourg
Euroclear and Clearstream, Luxembourg each holds securities for its customers
and facilitates the clearance and settlement of securities transactions by
electronic book-entry transfer between their respective account holders.
Euroclear and Clearstream, Luxembourg provide various services including
safekeeping, administration, clearance and settlement of internationally
traded securities and securities lending and borrowing. Euroclear and
Clearstream, Luxembourg also deal with domestic securities markets in several
countries through established depository and custodial relationships.
Euroclear and Clearstream, Luxembourg have established an electronic bridge
between their two systems across which their respective participants may
settle trades with each other.
Euroclear and Clearstream, Luxembourg customers are world-wide financial
institutions, including underwriters, securities brokers and dealers, banks,
trust companies and clearing corporations. Indirect access to Euroclear and
Clearstream, Luxembourg is available to other institutions that clear through
or maintain a custodial relationship with an account holder of either system.
Transfers of Covered Bonds represented by Registered Global Covered Bonds
Transfers of any interests in Covered Bonds represented by a Registered Global
Covered Bond within Euroclear and Clearstream, Luxembourg will be effected in
accordance with the customary rules and operating procedures of the relevant
clearing system.
On or after the Issue Date for any Series, transfers of Covered Bonds of such
Series between accountholders in Clearstream, Luxembourg and Euroclear will
generally have a settlement date three business days after the trade date
(T+3). The customary arrangements for delivery versus payment will apply to
such transfers.
Clearstream, Luxembourg and Euroclear have each published rules and operating
procedures designed to facilitate transfers of beneficial interests in
Registered Global Covered Bonds among participants and accountholders of
Clearstream, Luxembourg and Euroclear. However, they are under no obligation
to perform or continue to perform such procedures, and such procedures may be
discontinued or changed at any time. None of the Bond Trustee, the Security
Trustee, the Issuer, the Covered Bond Guarantor, the Agents or any Dealer will
be responsible for any performance by Clearstream, Luxembourg or Euroclear or
their respective direct or indirect participants or accountholders of their
respective obligations under the rules and procedures governing their
operations and none of them will have any liability for any aspect of the
records relating to or payments made on account of beneficial interests in the
Covered Bonds represented by Registered Global Covered Bonds or for
maintaining, supervising or reviewing any records relating to such beneficial
interests.
Taxation
Australian Taxation
The following taxation summary is of a general nature only and addresses only
some of the key Australian tax implications that may arise for a prospective
Covered Bondholder as a result of acquiring, holding or transferring a Covered
Bond. The following is not intended to be and should not be taken as a
comprehensive taxation summary for a prospective Covered Bondholder.
The taxation summary is based on the Australian taxation laws in force and the
administrative practices of the ATO generally accepted as at the date of this
Prospectus. Any of these may change in the future without notice and
legislation introduced to give effect to announcements may contain provisions
that are currently not contemplated and may have retroactive effect.
Prospective Covered Bondholders should also be aware that particular terms of
issue of any Series or Tranche of Covered Bonds may affect the tax treatment
of that and other Series or Tranches of Covered Bonds. Covered Bondholders
should consult their professional advisers in relation to their tax position.
Covered Bondholders who may be liable to taxation in jurisdictions other than
Australia in respect of their acquisition, holding or disposal of Covered
Bonds are particularly advised to consult their professional advisers as to
whether they are so liable (and, if so, under the laws of which
jurisdictions), since the following comments relate only to certain Australian
taxation aspects of the Covered Bonds. In particular, Covered Bondholders
should be aware that they may be liable to taxation under the laws of other
jurisdictions in relation to payments in respect of the Covered Bonds
(including the gross amount of any Coupons) even if such payments may be made
without withholding or deduction for or on account of taxation under the laws
of Australia.
Taxation of interest on Covered Bonds
Onshore Covered Bondholders
Covered Bondholders who are Australian tax residents or who are non-residents
that hold the Covered Bonds in carrying on business at or through a permanent
establishment in Australia will be taxable by assessment in respect of any
interest income (including potentially the gross amount of any Coupons)
derived in respect of the Covered Bonds. Such Covered Bondholders will
generally be required to lodge an Australian tax return. The timing of
assessment of the interest (e.g. a cash receipts or accruals basis) will
depend upon the tax status of the particular Covered Bondholder, the
Conditions of the Covered Bonds and the potential application of the "Taxation
of Financial Arrangements" provisions of the Tax Act, which provide for a
specialised regime for the taxation of financial instruments that can affect
the amount and timing of recognition of any gain or loss in respect of the
Covered Bonds.
Tax at the current rate of 47 per cent. may be deducted from payments to such
a Covered Bondholder if the Covered Bondholder does not provide a tax file
number (TFN) or an Australian Business Number (ABN) (where applicable), or
proof of a relevant exemption from quoting such numbers.
Section 126 of the Tax Act imposes a type of withholding tax at the rate of 45
per cent. on the payment of interest on Bearer Covered Bonds if the Issuer
fails to disclose the names and addresses of the relevant Covered Bondholders
to the ATO (or in the case of a Bearer Covered Bond held by a clearing house,
the name and address of the clearing house). These rules generally only
apply to Covered Bondholders who are Australian tax residents, or
non-residents that hold the Covered Bonds in carrying on business at or
through a permanent establishment in Australia.
Offshore Covered Bondholders
Interest (which for the purposes of withholding tax is defined in section
128A(1AB) of the Tax Act to include amounts in the nature of, or in
substitution for, interest and certain other amounts, including premiums on
redemption or, for a Covered Bond issued at a discount, the difference between
the amount repaid and the issue price) will be subject to interest withholding
tax at a current rate of 10 per cent., where the interest is paid to a
non-resident of Australia and not derived in carrying on business at or
through an Australian permanent establishment, or to an Australian resident
who derived the interest in carrying on business at or through a permanent
establishment outside Australia.
The Issuer does not intend to issue any Covered Bonds that would be
characterised other than as ordinary debt interests or debentures for tax
purposes.
Various exemptions are available from interest withholding tax, including the
"public offer" exemption, tax treaty exemption, and pension fund exemption
(each discussed further below).
Public offer exemption
An exemption from Australian interest withholding tax will be available under
section 128F of the Tax Act in respect of the Covered Bonds if the Issuer
remains an Australian resident company both at the time it issues the relevant
Series or Tranche of Covered Bonds and at the time interest is paid in respect
of the Covered Bonds, and the Series or Tranche of Covered Bonds is issued in
a manner which satisfies the "public offer test".
There are five principal methods of satisfying the public offer test, being
broadly:
(a) offers to ten or more unrelated financial institutions or
securities dealers;
(b) offers to 100 or more investors;
(c) offers of listed Covered Bonds;
(d) offers via publicly available electronic or other
information sources; and
(e) offers to a dealer, manager or underwriter who offers to
sell those Covered Bonds within 30 days by one of the preceding methods.
The public offer test will not be satisfied in respect of an issue of a Series
or Tranche of Covered Bonds if, at the time of issue, the Issuer knew, or had
reasonable grounds to suspect, that any of the Covered Bonds, or an interest
in any of the Covered Bonds, would be acquired either directly or indirectly
by an Offshore Associate (as defined below) of the Issuer, other than in the
capacity of a dealer, manager or underwriter in relation to the placement of
the Covered Bonds, or in the capacity of a clearing house, custodian, funds
manager or responsible entity of a registered scheme.
Accordingly, the Covered Bonds should not be acquired by any Offshore
Associate of the Issuer, subject to the exceptions referred to above.
Even if the public offer test is initially satisfied in respect of a Series or
Tranche of Covered Bonds, if such Covered Bonds later come to be held by an
Offshore Associate of the Issuer, and at the time of payment of interest on
those Covered Bonds, the Issuer knows or has reasonable grounds to suspect
that such person is an Offshore Associate of the Issuer, the exemption under
section 128F does not apply to interest paid by the Issuer to such Offshore
Associate in respect of those Covered Bonds, unless the Offshore Associate
receives the payment in the capacity of a clearing house, paying agent,
custodian, funds manager or responsible entity of a registered scheme.
For the purposes of this section, an Offshore Associate is an "associate" of
the Issuer as defined in section 128F(9) of the Tax Act who is:
(a) a non-resident of Australia that does not acquire the
Covered Bonds or an interest in the Covered Bonds in carrying on a business in
Australia at or through a permanent establishment of the associate in
Australia; or
(b) a resident of Australia that acquires the Covered Bonds or
an interest in the Covered Bonds in carrying on a business in a country
outside Australia at or through a permanent establishment of the associate in
that country.
The definition of associate includes, among other things, persons who have a
majority voting interest in the Issuer, or who are able to influence or
control the Issuer, and persons in whom the Issuer has a majority voting
interest, or whom the Issuer is able to influence or control (however this is
not a complete statement of the definition).
Unless otherwise specified herein (or another relevant supplement to this
Prospectus), the Issuer intends to issue the Covered Bonds in a manner which
will satisfy the requirements of section 128F of the Tax Act.
Tax treaty exemption
Various Australian double tax agreements, including those with the United
States of America, the United Kingdom, Norway, Finland, the Republic of
France, Japan, Switzerland, Germany, the Republic of South Africa and New
Zealand (each a Specified Country), include exemptions from interest
withholding tax for interest derived by:
(a) the government of the relevant Specified Country and certain
governmental authorities and agencies in the Specified Country; and
(b) certain unrelated banks, and financial institutions which
substantially derive their profits by carrying on a business of raising and
providing finance, which are resident in the Specified Country, and which are
dealing wholly independently with the Issuer. Interest paid under a
back-to-back loan or economically equivalent arrangement will not qualify for
this exemption.
The Australian Government is progressively amending its other double tax
agreements to include similar kinds of interest withholding tax exemptions.
The availability of relief under Australia's double tax agreements may be
limited by Australia's adoption of the Multilateral Convention to Implement
Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting in
circumstances where a Covered Bondholder has an insufficient connection with
the relevant jurisdiction. Prospective Covered Bondholders should obtain their
own independent tax advice as to whether any of the exemptions under the
relevant double tax agreements may apply to their particular circumstances.
Pension fund exemption
An exemption is available in respect of interest paid to a non-resident
superannuation fund where that fund is a superannuation fund maintained solely
for foreign residents and the interest arising from the Covered Bonds is
exempt from income tax in the country in which such superannuation fund is
resident. However, this exemption may not apply if the fund has either (i) an
ownership interest (direct and indirect) of 10% or more in the Issuer, or (ii)
influence over the Issuer's key decision making.
Payment of additional amounts
As set out in more detail in the Conditions, if the Issuer is at any time
compelled by law to deduct or withhold an amount in respect of any withholding
taxes imposed or levied by the Commonwealth of Australia in respect of the
Covered Bonds and the Applicable Final Terms (or, in the case of Exempt
Covered Bonds, the Applicable Pricing Supplement) indicate that tax gross-up
by the Issuer is applicable, the Issuer must, subject to certain exceptions,
pay such additional amounts as may be necessary in order to ensure that the
net amounts received by the holders of those Covered Bonds after such
deduction or withholding are equal to the respective amounts which would have
been received had no such deduction or withholding been required. If the
Issuer is compelled by law to pay such additional amounts in relation to any
Covered Bonds, the Covered Bonds may be redeemed at the option of the Issuer
in whole, or in part, on giving not less than 30 nor more than 60 days' notice
to the Bond Trustee (see further Condition 6(b)).
The Covered Bond Guarantor will not be required to pay any additional amounts
in these circumstances. Refer to section "-Payments by the Covered Bond
Guarantor" below.
Taxation of gains on disposal or redemption
Onshore Covered Bondholders
Covered Bondholders who are Australian tax residents, or who are non-residents
that hold the Covered Bonds in carrying on business at or through a permanent
establishment in Australia, will be required to include any gain on disposal
or redemption of the Covered Bonds in their assessable income and may be able
to deduct any loss on disposal or redemption of the Covered Bonds, depending
on their personal circumstances.
The determination of the amount and timing of any gain or loss on disposition
or redemption of the Covered Bonds may be affected by the "Taxation of
Financial Arrangements" provisions of the Tax Act, which provide for a
specialised regime for the taxation of financial instruments, and, where the
Covered Bonds are denominated in a currency other than Australian Dollars, the
foreign currency rules. Prospective Covered Bondholders should obtain their
own independent tax advice in relation to the determination of any gain or
loss on disposal or redemption of the Covered Bonds.
Offshore Covered Bondholders
A Covered Bondholder who is a non-resident of Australia and who has never held
the Covered Bonds through a permanent establishment in Australia will not be
subject to Australian income tax on gains realised on the disposal or
redemption of the Covered Bonds, provided such gains do not have an Australian
source. A gain arising on the sale of the Covered Bonds by a non-Australian
resident holder to another non-Australian resident where the Covered Bonds are
sold outside Australia and all negotiations are conducted, and documentation
executed, outside Australia, should generally not be regarded as having an
Australian source. In certain cases, a non-Australian resident holder may be
able to claim an exemption from Australian income tax on Australian-sourced
gains pursuant to the terms of an applicable double tax agreement.
Special rules can apply to treat a portion of the purchase price of the
Covered Bonds as interest for withholding tax purposes where deferred-return
Covered Bonds (for example, Covered Bonds which pay a return that is deferred
by more than 12 months) are sold to an Australian Covered Bondholder. Any
deemed interest under these rules is able to qualify for an exemption from
withholding tax as described above.
Payments by the Covered Bond Guarantor
If the Issuer fails to pay an amount of principal or interest on the Covered
Bonds, then the Covered Bond Guarantor may be required to make payments to the
holders of Covered Bonds under the Covered Bond Guarantee. Where such payments
relate to interest (including premiums on redemption or, for a Covered Bond
issued at a discount, the difference between the amount repaid and the issue
price), it is not clear whether such payments would also be treated as
interest for Australian withholding tax purposes. The definition of interest
for Australian withholding tax purposes in subsection 128A(1AB) of the Tax Act
is very broad and includes amounts in the nature of interest and amounts in
substitution for interest.
The ATO's view, as reflected in Taxation Determination TD 1999/26, is that
such payments under the Covered Bond Guarantee would be interest for
Australian withholding tax purposes. Based on this approach, interest
withholding tax would be imposed at the rate of 10 per cent. in relation to
any payments made by the Covered Bond Guarantor in respect of interest on the
Covered Bonds (or other amounts due under the Covered Bonds other than the
repayment of amounts subscribed for the Covered Bonds) subject to such relief
as may be available under the provisions of any applicable double taxation
treaty or to any other exemption that may apply.
As discussed above, the exemption that is commonly relied upon by Australian
debt issuers is the public offer exemption in section 128F of the Tax Act.
The ATO states in TD 1999/26 that guarantee payments would be treated as
exempt from withholding tax under section 128F of the Tax Act if the
requirements of that section are satisfied with respect to the underlying
Covered Bonds. If the requirements of section 128F of the Tax Act are
satisfied with respect to the Covered Bonds, then payments by the Covered Bond
Guarantor should not be subject to Australian withholding tax.
In the event that payments by the Covered Bond Guarantor are subject to any
withholding or deduction for or on account of tax, the Covered Bond Guarantor
will not be required to pay any additional amounts (see further Condition 7).
Stamp duty
No ad valorem stamp, issue, registration or similar taxes are payable in
Australia on the issue, transfer or redemption of the Covered Bonds.
Goods and Services Tax
Neither the issue nor receipt of the Covered Bonds will give rise to a
liability for GST in Australia on the basis that the supply of Covered Bonds
will comprise either an input taxed financial supply or (in the case of
certain offshore non-resident subscribers) a GST-free supply. Furthermore,
neither the payment of principal or interest on the Covered Bonds would give
rise to a GST liability.
Garnishee notices
The Australian Commissioner of Taxation may issue a notice requiring any
person who owes, or who may later owe, money to a taxpayer who has a
tax-related liability, to pay to him the money owed to the taxpayer. If the
Issuer or the Covered Bond Guarantor is served with such a notice in respect
of a Covered Bondholder, then the Issuer or Covered Bond Guarantor (as
applicable) would be required to comply with that notice.
Tax treatment of the Covered Bond Guarantor
The tax treatment of the Covered Bond Guarantor could affect the Covered Bond
Guarantor's ability to make payments under the Intercompany Notes, the Demand
Note, the Interest Rate Swaps, the Covered Bond Swaps and, if called upon, the
Covered Bond Guarantee.
Income Tax Status of the Covered Bond Guarantor
As the Covered Bond Guarantor is wholly owned by the Issuer, it will be a
member of the Issuer's tax consolidated group, and will be taken to be a part
of the head company of that group for most Australian income tax purposes.
The primary responsibility for income tax liabilities rests with the head
company of a tax consolidated group. As a result, the Covered Bond Guarantor
will not be subject to any income tax liability in respect of the income of
the Covered Bond Guarantor in the first instance.
All members of the Issuer tax consolidated group, including the Covered Bond
Guarantor, can become jointly and severally liable for the tax liabilities of
that group where the head company of that group defaults on those tax
liabilities. However, where the members of that group have entered into a
valid and effective tax sharing agreement covering all of the group's tax
liabilities, the liability of each member, including the Covered Bond
Guarantor, will be limited to a reasonable allocation of such group tax
liabilities. Under the Issuer tax consolidated group's tax sharing agreement,
subject to certain assumptions regarding the operation of the Covered Bond
Guarantor and the Issuer tax consolidated group, the Covered Bond Guarantor
should have a nil allocation of that group's tax liabilities.
It is the opinion of Allen & Overy that the Issuer tax consolidated
group's tax sharing agreement is consistent with the current guidance
published by the Australian Commissioner of Taxation in relation to tax
sharing agreements. It should be noted however that it is possible that the
Commissioner of Taxation could change his current views, and any ultimate
determination rests with the Courts. In addition, certain prescribed
circumstances can operate to invalidate a tax sharing agreement, however, the
Issuer will seek to ensure that no such circumstances occur. Subject to
those qualifications, it is the opinion of Allen & Overy that the Issuer
tax consolidated group's tax sharing agreement is valid and effective.
Additionally, the Covered Bond Guarantor has acceded to the Issuer tax
consolidated group's tax funding agreement, under which members of the tax
consolidated group may be required to pay funding obligations to the head
company of the group in respect of taxes. However, under the terms of the
tax funding agreement, the Covered Bond Guarantor should not be liable to pay
any funding obligations in respect of its activities.
Potential tax reform
The former Australian Government announced proposed changes to update the law
regarding the taxation of trusts. The changes enacted to date (which affect
managed funds) do not impact the Trust. Depending on the final form of any
further legislation, it is possible that the law could be amended in a way
that would cause the Covered Bond Guarantor to become subject to a liability
in respect of taxes in certain circumstances (including under the Issuer tax
consolidated group's tax sharing agreement or tax funding agreement), however,
there has been no express statement that such an outcome is intended. In
addition, the proposed changes (other than the changes relating to managed
funds) have not progressed beyond consultation and could potentially be
withdrawn.
GST treatment of Covered Bond Guarantor
Pursuant to the terms of the Bond Trust Deed, the Covered Bond Guarantor has
guaranteed payments of interest and principal under the Covered Bonds. The
Covered Bond Guarantor has agreed to pay an amount equal to the Guaranteed
Amount when the same becomes Due for Payment but which would otherwise be
unpaid by the Issuer. In addition, the Covered Bond Guarantor has agreed to
pay certain other amounts in accordance with the relevant Priority of
Payments. The GST treatment of the Covered Bond Guarantor could affect the
Covered Bond Guarantor's ability to make such payments.
The Covered Bond Guarantor became a member of the GST group of which Bank of
Queensland Limited is the representative member (the BOQ GST Group) with
effect from 1 July 2019. This means that the Covered Bond Guarantor is taken
to be a part of the BOQ GST Group for GST purposes from 1 July 2019. The
primary liability for GST rests with the representative member of the BOQ GST
Group. As a result, the Covered Bond Guarantor will not be subject to any GST
liability in respect of supplies made by the Covered Bond Guarantor in the
first instance on and from 1 July 2019.
All members of the BOQ GST Group, including the Covered Bond Guarantor, can
become jointly and severally liable for the GST liabilities of the BOQ GST
Group where the representative member of the group defaults on those GST
liabilities. However, where the members of the group have entered into a valid
and effective indirect tax sharing agreement, the liability of each member,
including the Covered Bond Guarantor, will be limited to a reasonable
allocation of the group's GST liabilities as determined under the indirect tax
sharing agreement. The Covered Bond Guarantor became a party to the BOQ GST
Group's indirect tax sharing deed on 15 April 2020.
It is the opinion of Allen & Overy that the BOQ GST Group's indirect tax
sharing deed is consistent with the current guidance published by the
Australian Commissioner of Taxation in relation to indirect tax sharing
agreements. It should be noted however, that it is possible that the
Commissioner of Taxation could change his current views, and any ultimate
determination rests with the Courts. In addition, certain prescribed
circumstances can operate to invalidate an indirect tax sharing agreement,
however, the Issuer will seek to ensure that no such circumstances occur.
Subject to those qualifications, it is the opinion of Allen & Overy that
the BOQ GST Group's indirect tax sharing deed is a valid and effective
indirect tax sharing agreement. Accordingly, the BOQ GST Group's indirect tax
sharing deed will limit the Covered Bond Guarantor's GST liability to the
amount determined under that indirect tax sharing deed on and from 15 April
2020.
For the period from 1 July 2019 to 15 April 2020, no such limitation of
liability for GST will be available to the Covered Bond Guarantor. However,
Allen & Overy have been advised that Bank of Queensland Limited, as
representative member, has complied with its GST obligations and made all
payments in respect of GST for the GST tax periods since 1 July 2019, such
that no amounts are currently outstanding for this period.
The supply of some services made to the Covered Bond Guarantor may give rise
to a liability for GST on the part of the relevant service provider. The GST
position in this regard is covered below. However, where the Covered Bond
Guarantor and the relevant service provider are grouped for GST purposes, no
GST liability arises and input tax credit entitlements in respect of
acquisitions made from outside of the GST group will depend on the supplies
and acquisitions of the GST group as a whole.
In relation to the acquisition of taxable services by the Covered Bond
Guarantor from a service provider who is not part of the same GST group:
(a) In the ordinary course of business, the service provider
would charge the Covered Bond Guarantor an additional amount on account of GST
unless the agreed fee is already GST-inclusive.
(b) Assuming that the Covered Bond Guarantor exceeds the
financial acquisitions threshold for the purposes of Division 189 of the GST
Act, the Covered Bond Guarantor would not be entitled to an input tax credit
or a full input tax credit from the ATO to the extent that the acquisition
relates to the Covered Bond Guarantor's input taxed supplies (including in
respect of the Intercompany Notes, the Demand Note and any Mortgage Loan
Rights).
(c) In the case of acquisitions which relate to the making of
supplies of the nature described above, the Covered Bond Guarantor may still
be entitled to a "reduced input tax credit" in relation to certain
acquisitions prescribed in the GST regulations, but only where the Covered
Bond Guarantor is the recipient of the taxable supply and the Covered Bond
Guarantor either provides, or is liable to provide, the consideration for the
taxable supply. As at the date of this Prospectus, the reduced input tax
credit for entities that are not "recognised trust schemes" as defined in the
GST Law is 75 per cent. of 1/11th of the GST inclusive consideration payable
by the Covered Bond Guarantor to the relevant service provider, and for
entities that are "recognised trust schemes" as defined in the GST Law, is
equal to 55 per cent. of 1/11th of the GST inclusive consideration payable by
the Covered Bond Guarantor.
(d) Where services are provided to the Covered Bond Guarantor by
an entity comprising an associate of the Covered Bond Guarantor for income tax
purposes (but who is not a member of the same GST group), those services are
provided for nil or less than market value consideration, and the Covered Bond
Guarantor would not be entitled to a full input tax credit, the relevant GST
(and any input tax credit) would be calculated by reference to the market
value of those services.
In the case of supplies performed outside Australia for the purposes of the
Covered Bond Guarantor's business, these may attract a liability for
Australian GST if they are supplies of a kind which would have been taxable if
they occurred in Australia and if the Covered Bond Guarantor would not have
been entitled to a full input tax credit if the supply had been performed in
Australia. This is known as the "reverse charge" rule. Where the rule
applies, the liability to pay GST to the ATO falls not on the supplier, but on
the Covered Bond Guarantor.
Where GST is payable on a taxable supply made to the Covered Bond Guarantor
but a full input tax credit is not available, this will mean that less money
is available to the Covered Bond Guarantor to make payments in accordance with
the relevant Priority of Payments (which would include Guaranteed Amounts).
United Kingdom Taxation
The comments below are of a general nature based on a summary of the Issuer's
understanding of current United Kingdom law and published HM Revenue and
Customs practice. They relate only to the position of persons who are the
absolute beneficial owners of their Covered Bonds and all payments made
thereon. The comments relate only to the United Kingdom withholding tax
treatment of payments of interest (as that term is understood for United
Kingdom tax purposes) in respect of the Covered Bonds and do not deal with any
other aspect of the United Kingdom taxation treatment that may be applicable
to holders of Covered Bonds (including, for instance, income tax, capital
gains tax and corporation tax). References in the following to "interest"
shall mean amounts that are treated as interest for the purposes of United
Kingdom taxation. The comments do not deal with any other United Kingdom
taxation implications of acquiring, holding or disposing of the Covered
Bonds. Prospective holders of Covered Bonds should note that the particular
terms of issue of any Series of Covered Bonds as specified in the Applicable
Final Terms (or, in the case of Exempt Covered Bonds, the Applicable Pricing
Supplement) may affect the tax treatment of that and any other Series of
Covered Bonds and should be treated with appropriate caution. The comments
below do not deal with the tax consequences of any substitution of the Issuer
in accordance with Condition 14 of the Covered Bonds.
Any holders of Covered Bonds who may be in doubt as to their tax position
should consult their professional advisers. Holders of Covered Bonds who may
be liable to taxation in jurisdictions other than the United Kingdom in
respect of their acquisition, holding or disposal of Covered Bonds are
particularly advised to consult their professional advisers as to whether they
are so liable (and, if so, under the laws of which jurisdictions), since the
following comments relate only to certain United Kingdom taxation aspects of
payments of interest in respect of the Covered Bonds. In particular, holders
of Covered Bonds should be aware that they may be liable to taxation under the
laws of other jurisdictions in relation to payments in respect of the Covered
Bonds even if such payments may be made without withholding or deduction for
or on account of taxation under the laws of the United Kingdom.
Payment of interest in respect of the Covered Bonds
Payments of interest on the Covered Bonds that does not have a United Kingdom
source may be made without deduction or withholding on account of United
Kingdom income tax.
Foreign Account Tax Compliance Act
Pursuant to certain provisions of the U.S. Internal Revenue Code of 1986,
commonly known as FATCA, a foreign financial institution (as defined by FATCA)
may be required to withhold on certain payments it makes (foreign passthru
payments) to persons that fail to meet certain certification, reporting or
related requirements. The Issuer is a foreign financial institution for
these purposes. A number of jurisdictions (including Australia) have entered
into, or have agreed in substance to, intergovernmental agreements with the
United States to implement FATCA (IGAs), which modify the way in which FATCA
applies in their jurisdictions. Under the provisions of IGAs as currently in
effect, a foreign financial institution in an IGA jurisdiction would generally
not be required to withhold under FATCA or an IGA from payments that it
makes. Certain aspects of the application of the FATCA provisions and IGAs
to instruments such as the Covered Bonds, including whether withholding would
ever be required pursuant to FATCA or an IGA with respect to payments on
instruments such as the Covered Bonds, are uncertain and may be subject to
change. Even if withholding would be required pursuant to FATCA or an IGA
with respect to payments on instruments such as the Covered Bonds, such
withholding would not apply prior to the date that is two years after the date
on which final regulations defining foreign passthru payments are published in
the U.S. Federal Register. Covered Bonds issued on or prior to the date that
is six months after the date on which final regulations defining foreign
passthru payments are filed with the U.S. Federal Register generally would be
grandfathered for purposes of FATCA withholding unless materially modified
after such date. However, if additional Covered Bonds (as described in
Condition 16) that are not distinguishable from previously issued Covered
Bonds are issued after the expiration of the grandfathering period and are
subject to withholding under FATCA, then withholding agents may treat all
Covered Bonds, including the Covered Bonds offered prior to the expiration of
the grandfathering period, as subject to withholding under FATCA. Holders
should consult their own tax advisers regarding how these rules may apply to
their investment in the Covered Bonds.
The Proposed Financial Transactions Tax (FTT)
On 14 February 2013, the European Commission published a proposal (the
Commission's Proposal) for a Directive for a common FTT in Belgium, Germany,
Estonia, Greece, Spain, France, Italy, Austria, Portugal, Slovenia and
Slovakia (the Participating Member States). However, Estonia has since stated
that it will not participate.
The Commission's Proposal has very broad scope and could, if introduced, apply
to certain dealings in the Covered Bonds (including secondary market
transactions) in certain circumstances. Primary market transactions referred
to in Article 5(c) of Regulation (EC) No. 1287/2006 are expected to be exempt.
Under the Commission's Proposal the FTT could apply in certain circumstances
to persons both within and outside of the Participating Member States.
Generally, it would apply to certain dealings in the Covered Bonds where at
least one party is a financial institution, and at least one party is
established in a Participating Member State. A financial institution may be,
or be deemed to be, "established" in a Participating Member State in a broad
range of circumstances, including (a) by transacting with a person established
in a Participating Member State or (b) where the financial instrument which is
subject to the dealings is issued in a Participating Member State.
However, the FTT proposal remains subject to negotiation between the
Participating Member States. It may therefore be altered prior to any
implementation, the timing of which remains unclear. Additional EU Member
States may decide to participate and/or participating Member States may decide
to withdraw. Therefore, it is currently uncertain whether and when the
proposed FTT will be enacted by the participating Member States and when it
will take effect with regard to dealings in the Covered Bonds.
Prospective holders of the Covered Bonds are advised to seek their own
professional advice in relation to the FTT.
Exchange Controls and Limitations
Under the Charter of the United Nations Act 1945 (Cth) and the Australian
Charter of United Nations (Dealings with Assets) Regulations 2008 the approval
of the Australian Minister for Foreign Affairs, or the Minister's delegate, is
required with respect to certain payments and actions in relation to an asset
proscribed or listed under, or which is owned or controlled directly or
indirectly by a person or entity proscribed or listed under those regulations
or is an asset derived or generated from such assets (proscribed persons
presently include, among others, persons associated with the Qadhafi regime in
Libya, the Taliban, a member of the Al-Qaida organisation and other persons
and entities connected with them). The Australian Department for Foreign
Affairs and Trade maintains a consolidated list of all such proscribed and
listed persons and entities, which is publicly available on its website. The
identity of such proscribed persons or entities under those regulations may
change in the future.
Additionally, under Part 4 of the Charter of the United Nations Act 1945
(Cth), it may be an offence under Australian law to deal with certain assets
or certain persons or entities which have either been listed by the Australian
Minister for Foreign Affairs or proscribed in regulations made by the
Australian Governor General unless the prior approval of the Australian
Minister for Foreign Affairs is granted in relation to that dealing.
Generally, assets, persons or entities are listed or proscribed by regulation
for the purpose of giving effect to resolutions adopted by the United Nations
Security Council in relation to terrorism. Assets, persons or entities listed
or proscribed by regulation are subject to change from time to time - as at
the date of this Prospectus, regulations were in effect in relation to assets,
persons or entities associated with, among others, Al-Qaida, ISIL (Da-esh) and
the Taliban, Central African Republic, Democratic Republic of the Congo,
Guinea-Bissau, Iran, Iraq, Libya, Lebanon, Mali, Democratic People's Republic
of Korea (North Korea), Somalia, South Sudan, Sudan, Syria and Yemen.
Under Section 102.6 and 102.7 of the Australian Criminal Code Act 1995 (Cth),
a person commits a criminal offence if the person intentionally receives funds
from, makes funds available to, or provides support or resources to a
terrorist organisation. Certain organisations are prescribed as terrorist
organisations by regulations enacted pursuant to Division 102 of the Criminal
Code Act 1995 (Cth). Under the Australian Autonomous Sanctions Act 2011 (Cth)
and the Autonomous Sanctions Regulations 2011 (Cth), sanctions are imposed
against certain specifically identified persons and entities associated with
particular countries, currently including the Democratic People's Republic of
Korea (North Korea), Zimbabwe, the former Federal Republic of Yugoslavia,
Myanmar, Syria, Russia and Ukraine (including the Crimea and Donbas Regions of
Ukraine (including Donestsk and Luhansk)), Libya and Iran, and certain
transactions involving the named persons or entities may only be conducted
with specific approval from the Minister of Foreign Affairs. Contravention of
these sanctions constitutes a criminal offence.
Subscription and Sale and Transfer and Selling Restrictions
The Dealers have in the Programme Agreement dated on or about the Programme
Date (as the same may be amended and/or supplemented and/or restated from time
to time, the Programme Agreement), agreed with the Issuer and the Covered Bond
Guarantor a basis upon which such Dealers or any of them may from time to time
agree to subscribe for, offer and/or place Covered Bonds. Any such agreement
for any particular subscription, offer and/or placement by a Dealer will
extend to those matters stated under the sections of this Prospectus entitled
"Form of the Covered Bonds" and "Terms and Conditions of the Covered Bonds"
above. The Issuer may pay the Dealers commission from time to time in
connection with any such subscription, offer and/or placement of the Covered
Bonds. In the Programme Agreement, the Issuer has agreed to reimburse and
indemnify the Dealers for certain of their expenses and liabilities in
connection with the establishment and any future updates of the Programme and
the issue of Covered Bonds under the Programme. The Dealers are entitled to
be released and discharged from their obligations in relation to any agreement
to subscribe for, offer and/or place Covered Bonds under the Programme
Agreement in certain circumstances prior to payment to the Issuer.
Selling Restrictions
United States
The Covered Bonds and the Covered Bond Guarantee have not been and will not be
registered under the Securities Act, or the securities laws of any state or
other jurisdiction of the United States, subject to certain exceptions, and
may not be offered or sold within the United States or to, or for the account
or benefit of, U.S. persons except in certain transactions exempt from the
registration requirements of the Securities Act. Terms used in this
paragraph have the meanings given to them by Regulation S under the Securities
Act.
Each Dealer has represented, warranted and agreed that neither it nor any of
its affiliates has offered and sold Covered Bonds, or will offer and sell
Covered Bonds within the United States or to, or for the account of, U.S.
persons (a) as part of its distribution at any time and (b) otherwise until
40 days after the later of the date of issue of the identifiable Series or
Tranche of Covered Bonds of which such Covered Bonds are a part and the
completion of the distribution of such identifiable Series or Tranche (the
distribution compliance period), as determined and certified to the Principal
Paying Agent or the Issuer by the relevant Dealer (or in the case of a sale of
an identifiable Series or Tranche of Covered Bonds to or through more than one
Dealer, by each of such Dealers as to the Covered Bonds of such identifiable
Series or Tranche purchased by or through it, in which case the Principal
Paying Agent or the Issuer will notify each such Dealer when all such Dealers
have so certified), except in accordance with Regulation S. Accordingly each
Dealer has represented, warranted and agreed that neither it, its affiliates
nor any persons acting on its or their behalf have engaged or will engage in
any directed selling efforts as defined in Regulation S under the Securities
Act with respect to Covered Bonds, and it and they have complied and will
comply with the offering restrictions requirements of Regulation S under the
Securities Act. Each Dealer has agreed that, at or prior to confirmation of
sale of Covered Bonds it will have sent to each distributor, dealer or persons
receiving a selling concession, fee or other remuneration that purchases
Covered Bonds from it during the distribution compliance period, a
confirmation or notice to substantially the following effect:
"The Covered Bonds and the Covered Bond Guarantee covered hereby have not been
registered under the United States Securities Act of 1933, as amended (the
Securities Act) or with any securities regulation authority of any state or
other jurisdiction of the United States and may not be offered or sold within
the United States or to, or for the account or benefit of, U.S. persons (a) as
part of their distribution at any time or (b) otherwise until 40 days after
the later of the date of issue of the identifiable Series or Tranche of
Covered Bonds of which such Covered Bonds are a part and the completion of the
distribution of such identifiable Series or Tranche of Covered Bonds, as
determined and certified to the Principal Paying Agent or the Issuer by [Name
of Dealer or Dealers as the case may be] (or in the case of a sale of an
identifiable Series or Tranche of Covered Bonds to or through more than one
dealer, by each of such Dealers as to the Covered Bonds of such identifiable
Series or Tranche purchased by or through it, in which case the Principal
Paying Agent or the Issuer will notify each such Dealer when all such Dealers
have so certified), except in either case in accordance with Regulation S
under the Securities Act. Terms used above have the meaning given to them in
Regulation S under the Securities Act."
Each Dealer has represented, warranted and agreed that it, its Affiliates or
any persons acting on its or their behalf have not engaged and will not engage
in any directed selling efforts with respect to any Covered Bond, and it and
they have complied and will comply with the offering restrictions requirement
of Regulation S.
In addition in respect of Bearer Covered Bonds where TEFRA D is specified in
the Applicable Final Terms (or, in the case of Exempt Covered Bonds, the
Applicable Pricing Supplement):
(a) except to the extent permitted under U.S. Treas. Reg.
Section 1.163-5(c)(2)(i)(D) (or any successor U.S. Treasury Regulation Section
including, without limitation, regulations issued in accordance with U.S.
Internal Revenue Service Notice 2012-20 or otherwise in connection with the
U.S. Hiring Incentives to Restore Employment Act of 2010) (the D Rules), each
Dealer has (a) represented, warranted and agreed that it has not offered or
sold, and agrees that during the restricted period it will not offer or sell,
Bearer Covered Bonds to a person who is within the United States or its
possessions or to a United States person, and (b) represented, warranted and
agreed that it has not delivered and agrees that it will not deliver within
the United States or its possessions definitive Bearer Covered Bonds that are
sold during the restricted period;
(b) each Dealer has represented, warranted and agreed that
throughout the restricted period it will have in effect procedures reasonably
designed to ensure that its employees or agents who are directly engaged in
selling Bearer Covered Bonds are aware that such Covered Bonds may not be
offered or sold during the restricted period to a person who is within the
United States or its possessions or to a United States person, except as
permitted by the D Rules;
(c) if it is a United States person, each Dealer has
represented, warranted and agreed that it is acquiring Bearer Covered Bonds
for purposes of resale in connection with their original issuance and if it
retains Bearer Covered Bonds for its own account, it will only do so in
accordance with the requirements of U.S. Treas. Reg. Section
l.163-5(c)(2)(i)(D)(6) (or any successor U.S. Treasury Regulation Section
including, without limitation, regulations issued in accordance with U.S.
Internal Revenue Service Notice 2012-20 or otherwise in connection with the
U.S. Hiring Incentives to Restore Employment Act of 2010);
(d) with respect to each Affiliate that acquires Bearer Covered
Bonds from a Dealer for the purpose of offering or selling such Covered Bonds
during the restricted period, such Dealer has (i) repeated and confirmed the
representations and agreements contained in paragraphs (a), (b), (c) and (e)
on such Affiliate's behalf or (ii) has agreed that it will obtain from such
Affiliate, for the benefit of the Issuer, the representations contained in
paragraphs (a), (b), (c) and (e); and
(e) each Dealer has represented, warranted and agreed that it
will not enter into a written contract (apart from a confirmation or other
notice of the transaction) for the offer or sale during the restricted period
of Bearer Covered Bonds with any person other than its Affiliate(s) unless it
obtains the representations and agreements contained in this paragraph from
the person with whom it enters into such written contract.
Terms used in the above paragraph have the meanings given to them by the U.S.
Internal Revenue Code of 1986 and regulations promulgated thereunder,
including the D Rules.
In respect of Bearer Covered Bonds where TEFRA C is specified in the
Applicable Final Terms (or, in the case of Exempt Covered Bonds, the
Applicable Pricing Supplement), such Bearer Covered Bonds must be issued and
delivered outside the United States and its possessions in connection with
their original issuance. Each Dealer has represented, warranted and agreed
that it has not offered, sold or delivered, and will not offer, sell or
deliver, directly or indirectly, such Bearer Covered Bonds within the United
States or its possessions in connection with their original issuance. Further,
each Dealer has represented, warranted and agreed in connection with the
original issuance of such Bearer Covered Bonds that it has not communicated,
and will not communicate, directly or indirectly, with a prospective purchaser
if such purchaser is within the United States or its possessions and will not
otherwise involve its U.S. office in the offer or sale of such Bearer Covered
Bonds. Terms used in this paragraph have the meanings given to them by the
U.S. Internal Revenue Code of 1986 and regulations promulgated thereunder,
including U.S. Treas. Reg. Section 1.163-5(c)(2)(i)(C) (or any successor U.S.
Treasury Regulation Section including, without limitation, regulations issued
in accordance with U.S. Internal Revenue Service Notice 2012-20 or otherwise
in connection with the U.S. Hiring Incentives to Restore Employment Act of
2010) (the C Rules).
Australia
No prospectus or other disclosure document (as defined in the Corporations
Act) in relation to the Programme or any Covered Bonds has been or will be
lodged with ASIC. Accordingly, each Dealer has represented and agreed that
unless the Applicable Final Terms (or, in the case of Exempt Covered Bonds,
the Applicable Pricing Supplement) (or another supplement to any disclosure
documents) otherwise provides, it:
(a) has not (directly or indirectly) made or invited, and will
not make or invite, an offer of the Covered Bonds for issue or sale in
Australia (including an offer or invitation which is received by a person in
Australia); and
(b) has not distributed or published, and will not distribute or
publish, any draft, preliminary or definitive disclosure document or any other
offering material or advertisement relating to any Covered Bonds in Australia,
unless (i) the aggregate consideration payable by each offeree or invitee is
at least A$500,000 (or its equivalent in an alternate currency) (disregarding
moneys lent by the offeror or its associates) or the offer or invitation
otherwise does not require disclosure to investors under Part 6D.2 or Part 7.9
of the Corporations Act, (ii) the offer or invitation is not made to a person
who is a "retail client" within the meaning of section 761G of the
Corporations Act, (iii) such action complies with applicable laws, regulations
and directives and (iv) such action does not require any document to be lodged
with ASIC.
Section 708(19) of the Corporations Act provides that an offer of debentures
for issue or sale does not need disclosure to investors under Part 6D.2 of the
Corporations Act if the issuer is an Australian authorised deposit-taking
institution (ADI). As at the date of this Prospectus, the Issuer is an ADI.
United Kingdom
Each Dealer has represented and agreed, and each further Dealer appointed
under the Programme will be required to represent and agree, that it has not
offered, sold or otherwise made available and will not offer, sell or
otherwise make available any Covered Bonds which are the subject of the
offering contemplated by this Prospectus as completed by the Final Terms (or
Pricing Supplement, as the case may be) in relation thereto to any retail
investor in the United Kingdom. For the purposes of this provision:
(a) the expression retail investor means a person who is one (or
more) of the following:
(i) a retail client, as defined in point (8) of Article 2 of
Regulation (EU) No 2017/565 as it forms part of domestic law by virtue of the
European Union (Withdrawal) Act 2018 (EUWA); or
(ii) a customer within the meaning of the provisions of the FSMA
and any rules or regulations made under the FSMA to implement Directive (EU)
2016/97, where that customer would not qualify as a professional client, as
defined in point (8) of Article 2(1) of Regulation (EU) No 600/2014 as it
forms part of domestic law by virtue of the EUWA; or
(iii) not a qualified investor as defined in Article 2 of the UK
Prospectus Regulation; and
(b) the expression an offer includes the communication in any
form and by any means of sufficient information on the terms of the offer and
the Covered Bonds to be offered so as to enable an investor to decide to
purchase or subscribe for the Covered Bonds.
Other regulatory restrictions
Each Dealer has represented and agreed, and each further Dealer appointed
under the Programme will be required to represent and agree, that:
(a) in relation to any Covered Bonds having a maturity of less
than one year, (i) it is a person whose ordinary activities involve it in
acquiring, holding, managing or disposing of investments (as principal or
agent) for the purposes of its business and (ii) it has not offered or sold
and will not offer or sell any Covered Bonds other than to persons whose
ordinary activities involve them in acquiring, holding, managing or disposing
of investments (as principal or agent) for the purposes of their businesses or
who it is reasonable to expect will acquire, hold, manage or dispose of
investments (as principal or agent) for the purposes of their businesses where
the issue of the Covered Bonds would otherwise constitute a contravention of
Section 19 of the FSMA by the Issuer;
(b) it has only communicated or caused to be communicated and
will only communicate or cause to be communicated an invitation or inducement
to engage in investment activity (within the meaning of Section 21 of the
FSMA) received by it in connection with the issue or sale of any Covered Bonds
in circumstances in which Section 21(1) of the FSMA does not apply to the
Covered Bond Guarantor and would not, if the Issuer was not an authorised
person, apply to the Issuer; and
(c) it has complied and will comply with all applicable
provisions of the FSMA with respect to anything done by it in relation to any
Covered Bonds in, from or otherwise involving the United Kingdom.
Prohibition of Sales to EEA Retail Investors
Each Dealer has represented and agreed, and each further Dealer appointed
under the Programme will be required to represent and agree, that it has not
offered, sold or otherwise made available and will not offer, sell or
otherwise make available any Covered Bonds which are the subject of the
offering contemplated by this Prospectus as completed by the Final Terms (or
Pricing Supplement, as the case may be) in relation thereto to any retail
investor in the European Economic Area. For the purposes of this provision:
(a) the expression "retail investor" means a person who is one
(or more) of the following:
(i) a retail client as defined in point (11) of Article 4(1)
of Directive 2014/65/EU (as amended, MiFID II); or
(ii) a customer within the meaning of Directive (EU) 2016/97
(the Insurance Distribution Directive), where that customer would not qualify
as a professional client as defined in point (10) of Article 4(1) of MiFID II;
or
(iii) not a qualified investor as defined in Regulation (EU)
2017/1129 (the Prospectus Regulation); and
(b) the expression "offer" includes the communication in any
form and by any means of sufficient information on the terms of the offer and
the Covered Bonds to be offered so as to enable an investor to decide to
purchase or subscribe the Covered Bonds.
Denmark
Each Dealer has represented and agreed, and each further Dealer appointed
under the Programme will be required to represent and agree, that the Covered
Bonds have not been offered or sold and will not be offered, sold or delivered
directly or indirectly in the Kingdom of Denmark by way of a public offering,
unless in compliance with, as applicable, the Prospectus Regulation, the
Danish Consolidated Act no. 931 of 6 September 2019 on Capital Markets, as
amended from time to time, and Executive Orders issued thereunder and in
compliance with Executive Order No. 1580 of 17 December 2018, as amended,
supplemented or replaced from time to time, issued pursuant to the Danish
Consolidated Act no. 937 of 6 September 2019 on Financial Business, as
amended.
Sweden
Each Dealer has confirmed and agreed that it will not, directly or indirectly,
offer for subscription or purchase or issue invitations to subscribe for or
buy the Covered Bonds or distribute any draft or final document in relation to
any such offer, invitation or sale except in circumstances that will not
result in a requirement to prepare a prospectus pursuant to the provisions of
the Swedish Financial Instruments Trading Act (lag (1991:980) om handel med
finansiella instrument).
Japan
The Covered Bonds have not been and will not be registered under the Financial
Instruments and Exchange Act of Japan (Act No. 25 of 1948, as amended (the
FIEA)) and each Dealer has represented and agreed that it will not offer or
sell any Covered Bonds, directly or indirectly, in Japan or to, or for the
benefit of, any resident of Japan (as defined under Item 5, Paragraph 1,
Article 6 of the Foreign Exchange and Foreign Trade Act (Act No. 228 of 1949,
as amended)), or to others for re-offering or resale, directly or indirectly,
in Japan or to, or for the benefit of, a resident of Japan except pursuant to
an exemption from the registration requirements of, and otherwise in
compliance with, the FIEA and any other applicable laws, regulations and
ministerial guidelines of Japan.
Singapore
Each Dealer has acknowledged, and each further Dealer appointed under the
Programme will be required to acknowledge, that no document (including the
Base Prospectus) has been registered, or will be registered, as a prospectus
with the Monetary Authority of Singapore, and the Covered Bonds will be
offered pursuant to exemptions under the SFA. Accordingly, each Dealer has
represented and agreed that the Covered Bonds have not and may not be offered
or sold or made the subject of an invitation for subscription or purchase nor
may the Base Prospectus or any other document or material in connection with
the offer or sale or invitation for subscription or purchase of any Covered
Bonds be circulated or distributed, whether directly or indirectly, to any
person in Singapore other than (a) to an institutional investor (as defined in
Section 4A of the SFA) pursuant to Section 274 of the SFA, (b) to a relevant
person (as defined in Section 275(2) of the SFA) pursuant to Section 275(1) of
the SFA, or to any person pursuant to Section 275(1A) of the SFA, and in
accordance with the conditions specified in Section 275 of the SFA, or (c)
otherwise pursuant to, and in accordance with the conditions of, any other
applicable provision of the SFA.
Where the Covered Bonds are subscribed or purchased under Section 275 of the
SFA by a relevant person which is:
(a) a corporation (which is not an accredited investor) (as
defined in Section 4A of the SFA)) the sole business of which is to hold
investments and the entire share capital of which is owned by one or more
individuals, each of whom is an accredited investor; or
(b) a trust (where the trustee is not an accredited investor (as
defined in Section 4A of the SFA)) whose sole purpose is to hold investments
and each beneficiary of the trust is an individual who is an accredited
investor,
securities or securities-based derivatives contracts (each term as defined in
Section 2(1) of the SFA) of that corporation or the beneficiaries' rights and
interest (howsoever described) in that trust will not be transferable for six
months after that corporation or that trust has acquired the Covered Bonds
pursuant to an offer made under Section 275 of the SFA except:
(i) to an institutional investor or to a relevant person
defined in Section 275(2) of the SFA or to any person arising from an offer
referred to in Section 275(1A) and Section 276(4)(c)(ii) of the SFA;
(ii) where no consideration is or will be given for the
transfer;
(iii) where the transfer is by operation of law;
(iv) as specified in Section 276(7) of the SFA; or
(v) as specified in Regulation 37A of the Securities and Futures
(Offers of Investments) (Securities and Securities-based Derivatives
Contracts) Regulations 2018 of Singapore.
Notification under Section 309B(1)(c) of the SFA - Unless otherwise stated in
the Applicable Final Terms in respect of any Covered Bonds (or, in the case of
Exempt Covered Bonds, the Applicable Pricing Supplement), in connection with
Section 309B of the SFA and the Securities and Futures (Capital Markets
Products) Regulations 2018 of Singapore (the CMP Regulations 2018), the Issuer
has determined, and hereby notifies all relevant persons as defined in Section
309A(1) of the SFA, unless otherwise specified before an offer of Covered
Bonds, that all Covered Bonds issued or to be issued under the Programme are
classified as capital markets products other than prescribed capital markets
products (as defined in the CMP Regulations 2018) and Specified Investment
Products (as defined in MAS Notice SFA 04-N12: Notice on the Sale of
Investment Products and MAS Notice FAA-N16: Notice on Recommendations on
Investment Products).
Hong Kong
Each Dealer has represented and agreed that:
(a) it has not offered or sold and will not offer or sell in
Hong Kong, by means of any document, any Covered Bonds (except for Covered
Bonds which are a "structured product" as defined in the Securities and
Futures Ordinance (Cap. 571) of Hong Kong (SFO) other than (a) to
"professional investors" as defined in the SFO and any rules made thereunder;
or (b) in other circumstances which do not result in the document being a
"prospectus" as defined in the Companies (Winding Up and Miscellaneous
Provisions) Ordinance (Cap. 32) of Hong Kong (the C(WUMP)O) or which do not
constitute an offer to the public within the meaning of the C(WUMP)O; and
(b) it has not issued or had in its possession for the purposes
of issue, and will not issue or have in its possession for the purposes of
issue, whether in Hong Kong or elsewhere any advertisement, invitation or
document relating to the Covered Bonds, which is directed at, or the contents
of which are likely to be accessed or read by, the public of Hong Kong (except
if permitted to do so under the securities laws of Hong Kong) other than with
respect to Covered Bonds which are or are intended to be to be disposed of
only to persons outside Hong Kong or only to "professional investors" as
defined in the SFO and any rules made thereunder.
The Netherlands
Each Dealer has represented and agreed, and each further Dealer appointed
under the Programme will be required to represent and agree, that the Covered
Bonds will only be offered in The Netherlands to qualified investors as
defined in the Prospectus Regulation.
Switzerland
This Prospectus is not intended to constitute an offer or solicitation to
purchase or invest in the Covered Bonds described herein. Each Dealer has
represented and agreed and each further Dealer appointed under the Programme
will be required to represent and agree that the Covered Bonds have not been
and will not be publicly offered, sold or advertised, directly or indirectly,
in, into or from Switzerland within the meaning of the Swiss Financial
Services Act (the FinSA) and will not be listed on the SIX Swiss Exchange or
on any other exchange or regulated trading facility in Switzerland. Neither
this Prospectus nor any other offering or marketing material relating to the
Covered Bonds constitutes a prospectus pursuant to the FinSA, and each Dealer
has further represented and agreed and each further Dealer appointed under the
Programme will be required to further represent and agree that neither this
Prospectus nor any other offering or marketing material relating to the
Covered Bonds has been or will be publicly distributed or otherwise made
publicly available in Switzerland.
General
Each Dealer has represented and agreed that it will (to the best of its
knowledge and belief) comply with all applicable securities laws and
regulations in force in any jurisdiction in which it purchases, offers, sells
or delivers Covered Bonds or possesses or distributes this Prospectus and will
obtain any consent, approval or permission required by it for the purchase,
offer, sale or delivery by it of Covered Bonds under the laws and regulations
in force in any jurisdiction to which it is subject or in which it makes such
purchases, offers, sales or deliveries and none of the Issuer, the Covered
Bond Guarantor, the Seller, the Bond Trustee, the Arranger and any of the
other Dealers will have any responsibility therefor. Furthermore, they will
not directly or indirectly offer, sell or deliver any Covered Bonds or
distribute or publish any form of application, prospectus, advertisement or
other offering material except under circumstances that will, to the best of
their knowledge and belief, result in compliance with any applicable laws and
regulations, and all offers, sales and deliveries of Covered Bonds by them
will be made on the same terms.
None of the Issuer, the Covered Bond Guarantor, the Bond Trustee, the Arranger
or any of the Dealers have made any representation that Covered Bonds may at
any time lawfully be sold in compliance with any applicable registration or
other requirements in any jurisdiction, or pursuant to any exemption available
thereunder, or assumes any responsibility for facilitating any such sale.
With regard to each Series or Tranche, the relevant Dealer will be required to
comply with any additional restrictions agreed between the Issuer and the
relevant Dealer and set out in the Applicable Final Terms (or, in the case of
Exempt Covered Bonds, the Applicable Pricing Supplement).
The Dealers and their respective affiliates are full service financial
institutions engaged in various activities, which may include securities
trading, commercial and investment banking, financial advisory, investment
management, investment research, principal investment, hedging, financing and
brokerage activities. The Dealers may engage in transactions with, or perform
services for the Issuer or the Covered Bond Guarantor in the ordinary course
of business. Some of the Dealers or their affiliates have, directly or
indirectly, performed investment and/or commercial banking or financial
advisory services for the Issuer and the Covered Bond Guarantor, for which
they have received customary fees and commissions, and they expect to provide
these services to the Issuer and the Covered Bond Guarantor in the future, for
which they will receive customary fees and commissions. In the ordinary course
of their various business activities, the Dealers and their respective
affiliates may make or hold a broad array of investments and actively trade
debt and equity securities (or related derivative securities) and financial
instruments (including bank loans) for their own account and for the accounts
of their customers, and such investment and securities activities may involve
securities and/or instruments of the Issuer or the Covered Bond Guarantor. If
any of the Dealers or their affiliates have a lending relationship with the
Issuer or the Covered Bond Guarantor, certain of those Dealers or their
affiliates routinely hedge, and certain other of those Dealers or their
affiliates may hedge, their credit exposure to the Issuer or the Covered Bond
Guarantor consistent with their customary risk management policies. Typically,
these Dealers and their affiliates would hedge such exposure by entering into
transactions which consist of either the purchase of credit default swaps or
the creation of short positions in the securities of the Issuer, including
potentially the Covered Bonds offered hereby. Any such credit default swaps or
short positions could adversely affect future trading prices of the Covered
Bonds offered hereby. The Dealers and their respective affiliates may also
make investment recommendations and/or publish or express independent research
views in respect of such securities or instruments and may at any time hold,
or recommend to clients that they acquire, long and/or short positions in such
securities and instruments.
This Prospectus may be used by any Dealer for offers and sales related to
market-making transactions in the Covered Bonds. Each Dealer may act as
principal or agent in these transactions. These sales will be made at prices
relating to prevailing market prices at the time of sale. Each Dealer does not
have any obligation to make a market in the Covered Bonds, and any
market-making may be discontinued at any time without notice.
General Information
Authorisation
The establishment and update of the Programme and the issue of Covered Bonds
have been duly authorised by resolutions of the board of directors of BOQ
dated 28 July 2016, 30 November 2017, 29 November 2018, 21 January 2020, 14
April 2021, 13 April 2022 and 19 April 2023.
Listing and admission to trading of Covered Bonds
The admission of the Programme to listing on the Official List of the FCA and
to trading on the Main Market of the London Stock Exchange is expected to take
effect on or about 27 April 2023. The price of the Covered Bonds on the price
list of the London Stock Exchange will be expressed as a percentage of their
principal amount (exclusive of accrued interest). It is expected that each
Tranche of Covered Bonds which is to be admitted to trading on the Main Market
of the London Stock Exchange will be so admitted to trading upon submission to
the London Stock Exchange of the Applicable Final Terms and any other
information required by the London Stock Exchange, subject to the issue of the
relevant Covered Bonds. Prior to admission to trading, dealings will be
permitted by the London Stock Exchange in accordance with its rules.
Transactions will normally be effected for delivery on the third working day
in London after the day of the transaction.
Documents Available
For 12 months following the date of this Prospectus, the following documents
will be available at:
https://www.boq.com.au/Shareholder-centre/debt-investor-information/covered-bonds
(https://www.boq.com.au/Shareholder-centre/debt-investor-information/covered-bonds%20)
(other than in the case of the constitutive documents of the Covered Bond
Guarantor, which will be available at the office of the Issuer):
(i) the constitutive documents of the Issuer;
(ii) the constitutive documents of the Covered Bond Guarantor;
(iii) any Final Terms relating to Covered Bonds of the Issuer
which are admitted to listing, trading and/or quotation by any listing
authority, stock exchange and/or quotation system (in the case of any Exempt
Covered Bonds which are not admitted to listing, trading and/or quotation by
any listing authority, stock exchange and/or quotation system, copies of the
Applicable Pricing Supplement will only be available for inspection by the
relevant Covered Bondholders from the registered office of the Issuer or the
specified office of the Principal Paying Agent);
(iv) the Bond Trust Deed (which includes the Covered Bond
Guarantee and the forms of the Global Covered Bonds, the Definitive Covered
Bonds, the Coupons and the Talons) but excluding the Final Terms and Pricing
Supplement as set out in paragraph (iii) above); and
(v) a copy of this Prospectus, together with any supplement to
this Prospectus or further Prospectus and any documents incorporated by
reference.
The Prospectus and the Applicable Final Terms for each Tranche of Covered
Bonds will be published on the Regulatory News Service operated by the London
Stock Exchange at https://www.londonstockexchange.com and are also available,
without charge, on the internet site www.boq.com.au. The Issuer will also
provide, without charge, upon the written request of any person, a copy of
this Prospectus, the Applicable Final Terms for each Tranche of Covered Bonds
issued subject to the provisions described in this Prospectus and any
supplement hereto and any or all of the documents which, or portions of which,
are incorporated in this Prospectus by reference. Copies of the Final Terms
will also be available from the office of the Issuer and the specified office
of the Principal Paying Agent set out in the section "Directory" at the end of
this Prospectus. Written requests for such documents should be directed to the
Issuer at its office set out in the section "Directory" at the end of this
Prospectus.
Clearing Systems
The Bearer Covered Bonds to be issued under the Programme have been accepted
for clearance through Euroclear and Clearstream, Luxembourg (which are the
entities in charge of keeping the records). The appropriate Common Code and
the International Securities Identification Number (ISIN) for each Tranche of
Bearer Covered Bonds allocated by Euroclear and Clearstream, Luxembourg and
(where applicable) the identification number for any other relevant clearing
system for each Series of Covered Bonds will be set out in the Applicable
Final Terms (or, in the case of Exempt Covered Bonds, the Applicable Pricing
Supplement). The address of Euroclear is 1 Boulevard du Roi Albert II,
B-1210 Brussels, Belgium and the address of Clearstream, Luxembourg is 42
Avenue JF Kennedy, L-1855 Luxembourg, Luxembourg.
The A$ Registered Covered Bonds may be cleared through Austraclear. If A$
Registered Covered Bonds are lodged into the Austraclear System, Austraclear
will become the registered holder of those A$ Registered Covered Bonds in the
A$ Register. While those A$ Registered Covered Bonds remain in the
Austraclear System:
(i) all payments and notices required of the Issuer, the
Covered Bond Guarantor and the Trust Manager in relation to those A$
Registered Covered Bonds will be directed to Austraclear; and
(ii) all dealings and payments in relation to those A$
Registered Covered Bonds within the Austraclear System will be governed by the
Austraclear Regulations.
If the Covered Bonds are to be cleared through an additional or alternative
clearing system, the appropriate information will be specified in the
Applicable Final Terms (or, in the case of Exempt Covered Bonds, the
Applicable Pricing Supplement).
Conditions for determining price
The price and amount of Covered Bonds to be issued under the Programme will be
determined by the Issuer and each relevant Dealer at the time of issue in
accordance with prevailing market conditions.
Significant or Material Change
Save as disclosed in the section "Bank of Queensland Limited - Other
developments", there has been no significant change in the financial
performance or financial position of the BOQ Group since 28 February 2023 and
no material adverse change in the prospects of the Issuer since 31 August
2022. In addition, there have been no recent events particular to the Issuer
which are to a material extent relevant to the evaluation of the Issuer's
solvency.
There has been no significant change in the financial performance or financial
position of the Covered Bond Guarantor or the Trust since 31 August 2022 and
no material adverse change in the prospects of the Covered Bond Guarantor or
the Trust since the same date.
Litigation
Save as disclosed in the section "Risk Factors - Risk Factors related to the
Issuer and the BOQ Group - Litigation and regulatory proceedings" in this
Prospectus, there are no governmental, legal or arbitration proceedings
(including any such proceedings which are pending or threatened) of which the
Issuer or any of its Subsidiaries is aware in the 12 months immediately
preceding the date of this Prospectus which may have, or have had in the
recent past, a significant effect on the financial position or profitability
of the Issuer and/or the BOQ Group.
There are no governmental, legal or arbitration proceedings (including any
proceedings which are pending or threatened) of which the Covered Bond
Guarantor is aware in the 12 months immediately preceding the date of this
Prospectus which may have, or have had in the recent past, a significant
effect on the financial position or profitability of the Covered Bond
Guarantor or the Trust.
Independent Auditors
The financial statements of the Issuer and its subsidiaries have been audited
for the financial year ended 31 August 2021 by KPMG, independent auditors of
the Issuer and its subsidiaries for that period, and unqualified opinions have
been reported thereon in accordance with generally accepted auditing standards
in Australia. KPMG has no material interest in the Issuer.
The financial statements of the Issuer and its subsidiaries have been audited
for the financial year ended 31 August 2022 by PricewaterhouseCoopers (PwC
Australia), independent auditors of the Issuer and its subsidiaries for that
period, and unqualified opinions have been reported thereon in accordance with
generally accepted auditing standards in Australia. PwC Australia has no
material interest in the Issuer.
With respect to the unaudited financial information of the Issuer for the half
years ended 28 February 2022 and 28 February 2023, each incorporated by
reference in this Prospectus, PwC Australia have reported that they have
applied limited procedures in accordance with professional standards for a
review of such information. However, their separate reports dated 13 April
2022 and 19 April 2023, respectively and each incorporated by reference
herein, states that they did not audit and they do not express an opinion on
that unaudited financial information. Accordingly, the degree of reliance on
their report on such information should be restricted in light of the limited
nature of the review procedures applied.
Each of KPMG and PwC Australia partners are members or affiliate members of
the Chartered Accountant Australia and New Zealand (CA ANZ).
Limitation on Auditor's Liability
PwC Australia may be able to assert a limitation of liability with respect to
claims arising out of its audit report or included in the documents identified
under "Documents Incorporated by Reference" on page 92 of this Prospectus, and
elsewhere in this Prospectus, to the extent it is subject to the limitations
under the Chartered Accountants Australia and New Zealand Scheme (NSW) (the
Accountants Scheme) approved by the New South Wales Professional Standards
Council or such other applicable scheme approved pursuant to the Professional
Standards Act of 1994 of New South Wales, Australia (the Professional
Standards Act). The Professional Standards Act and the Accountants Scheme may
limit the liability of PwC Australia for damages with respect to certain civil
claims arising in, or governed by the laws of, New South Wales directly or
vicariously from anything done or omitted in the performance of their
professional services to Bank of Queensland Limited, including, without
limitation, their audits of Bank of Queensland Limited's financial statements.
PwC Australia's maximum liability under the Accountants Scheme is capped at an
amount that depends upon the type of service and the applicable engagement fee
for that service, with the lowest such liability cap set at A$2 million (where
the claim arises from a service in respect of which the fee is less than
A$100,000) and may be up to A$75 million for audit work (where the claim
arises from an audit service in respect of which the fee is greater than A$2.5
million or more). The limit does not apply to claims for breach of trust,
fraud or dishonesty. The Professional Standards Act and the Accountants Scheme
have not been subject to judicial consideration and, therefore, how the
limitations will be applied by courts and the effect of the limitations on the
enforcement of foreign judgments is untested.
Reports
The Bond Trust Deed provides that the Bond Trustee may rely on the advice,
report, certificate or opinion of or any information obtained from certain
professional advisers or other experts in accordance with the provisions of
the Bond Trust Deed, whether or not any such advice, report, certificate or
opinion of, or any other information, or engagement letter or other document
entered into by the Bond Trustee and the relevant person in connection
therewith, contains any monetary or other limit on the liability of the
relevant person.
The Trust Manager will prepare monthly Asset Coverage Reports detailing, among
other things, compliance with the Asset Coverage Test. Copies of the
Applicable Final Terms (or, in the case of Exempt Covered Bonds, the
Applicable Pricing Supplement) for each Series (including in relation to
unlisted Covered Bonds of any Series) and the Asset Coverage Reports are
available to Covered Bondholders during normal business hours at the specified
office of the Issuer as set out in the section "Directory" at the end of this
Prospectus.
Contracts
The Issuer is not aware of any material contracts having been entered into by
the Covered Bond Guarantor other than the Programme Documents and which could
result in it being under an obligation or entitlement that is material to its
ability to meet its obligations to Covered Bondholders in respect of the
Covered Bonds that may be issued.
Post-issuance information
Except as set out in the monthly Asset Coverage Reports and in the Applicable
Final Terms (or, in the case of Exempt Covered Bonds, the Applicable Pricing
Supplement) relating to a particular Series of Covered Bonds, the Issuer does
not intend to provide any post-issuance information in relation to any issue
of Covered Bonds.
Audited financial statements of the Trust
The financial statements of the Trust in respect of the year ended 31 August
2021 and in respect of the year ended 31 August 2022, to the extent
applicable, comply with the Australian Accounting Standards adopted by the
Australian Accounting Standards Board which are equivalent of the
International Financial Reporting Standards as issued by the International
Accounting Standards Board.
The financial statements of the Trust in respect of the year ended 31 August
2021 and in respect of the year ended 31 August 2022 have been prepared to
assist the Trust Manager in meeting the financial reporting requirements as
set out in the Bond Trust Deed. As a result, the audited financial statements
of the Trust in respect of the year ended 31 August 2021 and in respect of the
year ended 31 August 2022 may not be suitable for another purpose.
The financial statements of the Trust and the notes thereto are intended
solely for investors in the Covered Bonds and should not be used by parties
other than investors in the Covered Bonds. Please refer to the section titled
"Emphasis of matter - basis of accounting and restriction on use" contained in
the Independent Auditor's Report on page 15 of the annual financial report of
the Trust in respect of the year ended 31 August 2021 and page 23 of the
annual financial report of the Trust in respect of the year ended 31 August
2022, in each case, as incorporated by reference into this Prospectus.
The emphasis of matter paragraph contained in the auditor's report of the
Trust in respect of the year ended 31 August 2021 reads as follows:
"We draw attention to Note 2 to the Financial Report, which describes the
basis of preparation.
The Financial Report has been prepared to assist the Trust Manager of BOQ
Covered Bond Trust in meeting the financial reporting requirements of the
Covered Bond Trust Establishment Deed. As a result, the Financial Report and
this Auditor's Report may not be suitable for another purpose. Our opinion is
not modified in respect of this matter.
Our report is intended solely for Perpetual Corporate Trust Limited (the
Trustee), B.Q.L Management Pty Ltd (the Manager), BNY Trust Company of
Australia Limited (the Bond Trustee) and the Investors of BOQ Covered Bond
Trust and should not be used by parties other than Perpetual Corporate Trust
Limited, B.Q.L Management Pty Ltd, BNY Trust Company of Australia Limited and
the Investors of BOQ Covered Bond Trust. We disclaim any assumption of
responsibility for any reliance on this report, or on the Financial Report to
which it relates, to any person other than Perpetual Corporate Trust Limited,
B.Q.L Management Pty Ltd, BNY Trust Company of Australia Limited and the
Investors of BOQ Covered Bond Trust or for any other purpose than that for
which it was prepared."
The emphasis of matter paragraph contained in the auditor's report of the
Trust in respect of the year ended 31 August 2022 reads as follows:
"We draw attention to Note 2 in the financial report, which describes the
basis of accounting. The financial report has been prepared to assist the
Trust Manager to meet the financial reporting requirements of the Covered Bond
Trust Establishment Deed dated 24 April 2017. As a result, the financial
report may not be suitable for another purpose. Our report is intended solely
for BOQ Covered Bond Trust and its investors and should not be used by parties
other than BOQ Covered Bond Trust and its investors. In addition, our report
should not be distributed to parties other than BOQ Covered Bond Trust, its
investors, and Perpetual Corporate Trust Limited (the Trustee). Our opinion is
not modified in respect of this matter."
Glossary
A$ Registered Covered Bonds means covered bonds denominated in A$ issued in registered form by entry in
the A$ Register maintained by the A$ Registrar.
A$ Register means the register of holders of the A$ Registered Covered Bonds maintained by
the A$ Registrar.
A$ Registrar means Austraclear Services Limited ABN 28 003 284 419 or any other person
appointed by the Issuer and/or the Covered Bond Guarantor under an Agency
Agreement to maintain the A$ Register and perform any payment and other duties
as specified in that agreement.
A$ Registry Agreement means the ASX Austraclear Registry and IPA Services Agreement entered into on
or about the Programme Date, between the Issuer, the A$ Registrar, the Covered
Bond Guarantor and the Bond Trustee, as amended, restated, supplemented,
replaced or novated from time to time.
Account Bank means Macquarie Bank Limited ABN 46 008 583 542 in its capacity as Account
Bank pursuant to the Account Bank Agreement together with any successor or
replacement account bank appointed from time to time in accordance with the
terms of the Account Bank Agreement.
Account Bank Agreement means the account bank agreement dated on or about the Programme Date between
the Covered Bond Guarantor, the Trust Manager, the Account Bank, the Issuer
and the Security Trustee, as amended, restated, supplemented, replaced or
novated from time to time.
Account Bank Mandate means either of the GIC Account Mandate or the Swap Collateral Cash Account
Mandate to be set up by the Covered Bond Guarantor (acting at the direction of
the Trust Manager).
Accrual Period has the meaning given to it in Condition 4(a).
Accrued Interest Adjustment in relation to a Mortgage Loan, means (without double counting) the amount of
interest accrued on that Mortgage Loan for, and any fees in relation to that
Mortgage Loan falling due for payment during, the period commencing on (and
including) the Mortgage Loan Scheduled Payment Date for that Mortgage Loan
immediately prior to the Closing Date for that Mortgage Loan and ending on
(but excluding) that Closing Date and any accrued interest and fees due but
unpaid in relation to that Mortgage Loan prior to that Mortgage Loan Scheduled
Payment Date.
Additional Business Centre means, in relation to a Series of Covered Bonds, the Additional Business
Centre as specified in the Applicable Final Terms (or, in the case of Exempt
Covered Bonds, the Applicable Pricing Supplement).
ADI means an Authorised Deposit-Taking Institution.
Adjusted Aggregate Mortgage Loan Amount has the meaning given to it in the section "Overview of the Principal
Documents - Establishment Deed - Asset Coverage Test" of this Prospectus.
Adjusted Required Redemption Amount means in relation to a Series of Covered Bonds:
(a) the Australian Dollar Equivalent of the Required Redemption
Amount; plus or minus
(b) the Australian Dollar Equivalent of any swap termination
amounts payable under the Covered Bond Swaps corresponding to the Series to or
by the Covered Bond Guarantor less (where applicable) amounts standing to the
credit of:
(i) the GIC Account; and
(ii) the principal balance of any Substitution Assets and
Authorised Investments (excluding all amounts to be applied on the next
following Distribution Date to repay higher ranking amounts in the relevant
Priority of Payments and those amounts that are required to repay any Series
of Covered Bonds which mature prior to or on the same date as the relevant
Series of Covered Bonds); plus or minus
(c) the Australian Dollar Equivalent of any swap termination
amounts payable to or by the Covered Bond Guarantor under the Interest Rate
Swap.
Agency Agreements means the Principal Agency Agreement and the A$ Registry Agreement, and each
an Agency Agreement.
Agents means the Paying Agents, the Registrar, the Transfer Agent, the Calculation
Agents and the A$ Registrar and each, an Agent.
Amortisation Test has the meaning given to it in the section "Overview of the Principal
Documents - Establishment Deed - Amortisation Test" of this Prospectus.
Amortisation Test Aggregate Mortgage Loan Amount has the meaning given to it in the section "Overview of the Principal
Documents - Establishment Deed - Amortisation Test" of this Prospectus.
Amortisation Test Current Principal Balance has the meaning given to it in the section "Overview of the Principal
Documents - Establishment Deed - Amortisation Test" of this Prospectus.
Amortisation Test Deterioration in connection with an event or circumstance, will occur if A is greater than
B, where:
A = the ratio of the Amortisation Test Aggregate
Mortgage Loan Amount to the Australian Dollar Equivalent of the aggregate
Principal Amount Outstanding of the Covered Bonds (expressed as a percentage)
as determined by the Trust Manager on the Determination Date immediately
preceding such event or circumstance; and
B = the ratio of the Amortisation Test Aggregate
Mortgage Loan Amount to the Australian Dollar Equivalent of the aggregate
Principal Amount Outstanding of the Covered Bonds (expressed as a percentage)
as determined by the Trust Manager immediately following such event or
circumstance.
Annual Accounting Date means in respect of the Trust, 31 August in each year or such other date as
the Covered Bond Guarantor (acting on the directions of the Trust Manager) may
determine.
Applicable Final Terms means, in relation to a Series or Tranche of Covered Bonds (other than Exempt
Covered Bonds), the Final Terms (or the relevant provisions thereof) attached
to or endorsed on the Covered Bonds comprising that Series or Tranche.
Applicable Pricing Supplement means, in relation to a Series or Tranche of Exempt Covered Bonds, the Pricing
Supplement (or the relevant provisions thereof) attached to or endorsed on the
Exempt Covered Bonds comprising that Series or Tranche.
Appointee means any attorney, manager, Receiver, agent, delegate, nominee, custodian or
other person appointed by the Bond Trustee under the Bond Trust Deed or by the
Security Trustee under the Security Deed.
APRA means the Australian Prudential Regulation Authority.
Arranger in relation to any issuance of Covered Bonds, means NAB.
ASIC Australian Securities and Investments Commission.
Asset Coverage Reports means the monthly reports in a form agreed from time to time between the
parties to the Management Agreement, and each an Asset Coverage Report.
Asset Coverage Test has the meaning given to it in the section "Overview of the Principal
Documents - Establishment Deed - Asset Coverage Test" of this Prospectus.
Asset Coverage Test Breach Notice means the notice required to be served by the Bond Trustee on the Covered Bond
Guarantor pursuant to the Establishment Deed indicating that the Asset
Coverage Test has not been satisfied on two consecutive Determination Dates.
Asset Percentage means the lowest of:
(a) the Programme Asset Percentage;
(b) such percentage figure determined by the Trust Manager on
each Determination Date (and on such other dates as may be agreed from time to
time between the Issuer and the Trust Manager) in accordance with the terms of
this deed, being the percentage figure that is necessary to ensure that the
Covered Bonds maintain the then current ratings assigned to them by Fitch;
(c) such percentage figure as may be determined by the Covered
Bond Guarantor, or the Trust Manager acting on its behalf, from time to time,
in accordance with the terms of this deed, and notified to Moody's and the
Security Trustee on the Determination Date, or if no notification is made to
Moody's and the Security Trustee on such Determination Date, on the last date
of such notification. If the Trust Manager so elects to notify Moody's and
the Security Trustee of a new percentage figure (without being obliged to do
so), this percentage figure will be the difference between 100 and the
percentage amount of credit enhancement that is necessary to ensure that there
is sufficient credit enhancement for the Covered Bonds to achieve an Aaa
rating by Moody's using Moody's expected loss methodology (regardless of the
actual Moody's rating of the Covered Bonds at the time); and
(d) such other percentage figure as may be determined by the
Issuer from time to time and notified to each of the Covered Bond Guarantor
and the Trust Manager.
Asset Percentage Adjusted Mortgage Loan Balance Amount has the meaning given to it in the section "Overview of the Principal
Documents - Establishment Deed - Asset Coverage Test" of this Prospectus.
Assets in relation to the Trust means all assets and property, real and personal
(including choses in action and other rights), tangible and intangible,
present or future, held by the Covered Bond Guarantor as trustee of the Trust
from time to time, including but not limited to:
(a) the Mortgage Loan Rights;
(b) Authorised Investments;
(c) Substitution Assets;
(d) the rights of the Covered Bond Guarantor in, to and under
the Programme Documents and the Trust Accounts;
(e) the proceeds of realisation, sale, transfer or surrender of
any Assets of the Trust;
(f) all additions or accretions (if any) to the Trust which
arise by way of dividend, interest, premium or distribution, or which are
otherwise received and are for the time being retained by the Covered Bond
Guarantor in respect of the Trust;
(g) all income from the Trust held pending distribution or
reinvestment.
(h) the benefit of all representations, warranties,
undertakings, covenants, indemnities, promises and choses in action in favour
of the Covered Bond Guarantor under the Programme Documents; and
(i) amounts derived or accrued from any of the assets referred
to in the preceding paragraphs of this definition.
Attorney means any attorney appointed under the Security Deed.
AU Business Day means any day (other than a Saturday, Sunday or public holiday) on which banks
are open for business in Sydney, Brisbane and Melbourne and on which the
Austraclear System is operating.
Auditors means the auditors for the time being of the Issuer or, as the case may be,
the Trust (or any replacement auditor of the Trust appointed in accordance
with the Establishment Deed) and each, an Auditor.
Austraclear means Austraclear Ltd ABN 94 002 060 773.
Austraclear Regulations means the regulations established by Austraclear to govern the use of the
Austraclear System.
Austraclear System means the "System" as defined in the Austraclear Regulations.
Australian Banking Act means the Banking Act 1959 (Cth).
Australian Bureau of Statistics Index means the quarterly index of increases or decreases in established house
prices (determined on the basis of the weighted average of house prices in
eight capital cities), issued by the Australian Bureau of Statistics,
Australia's official statistical organisation, in relation to established
house prices in Australia or, if this index is unavailable, a suitably widely
recognised property price index selected by the Trust Manager (in its sole
discretion).
Australian Bureau of Statistics Indexed Valuation means in relation to any Mortgaged Property at any date the Latest Valuation
of that Mortgaged Property as increased or decreased as appropriate by the
increase or decrease in the Australian Bureau of Statistics Index since the
date of that Latest Valuation.
Australian Dollar Equivalent means in relation to an amount which is denominated in:
(a) a currency other than Australian Dollars, the Australian
Dollar equivalent of such amount ascertained using the relevant Covered Bond
Swap Rate; and
(b) Australian Dollars, the applicable amount in Australian
Dollars.
Authorised Deposit-Taking Institution means an authorised deposit-taking institution as defined in the Australian
Banking Act.
Authorised Investments means Australian Dollar demand or time deposits, certificates of deposit and
short-term debt obligations (including commercial paper) (which may include
deposits into any account which earns a rate of interest related to the Bank
Bill Rate) provided that in all cases such investments have a maturity date of
30 days or less and mature on or before the next following Distribution Date
and the issuing or guaranteeing entity or the entity with which the demand or
time deposits are made (being an Authorised Deposit Taking Institution) has:
(a) a short-term deposit rating of at least P-1 by Moody's; and
(b) a credit rating of at least F1 by Fitch assigned to its
short-term unsecured, unguaranteed and unsubordinated debt obligations or a
credit rating of at least A by Fitch assigned to its long term, unsecured,
unsubordinated and unguaranteed debt obligations,
or which are otherwise acceptable to the Rating Agencies (if they are notified
in advance) to maintain the then current rating of the Covered Bonds.
Authorised Signatory in relation to a Transaction Party, means an officer of the Transaction Party,
or such other person appointed by the Transaction Party to act as its
authorised signatory and notified to the other Transaction Parties.
Available Income Amount means in relation to a Collection Period and the Determination Date
immediately following the end of that Collection Period, an amount equal to
the aggregate of:
(a) the lesser of:
(i) Collections for that Collection Period; and
(ii) Finance Charge Collections for that Collection Period;
(b) all amounts of interest received on the Trust Accounts and
all amounts of interest or income received in respect of the Substitution
Assets and Authorised Investments, in each case, during the immediately
preceding Collection Period;
(c) all amounts receivable from the Interest Rate Swap Providers
under the Interest Rate Swaps on the immediately following Distribution Date;
(d) prior to the service on the Covered Bond Guarantor of a
Notice to Pay or an Asset Coverage Test Breach Notice, amounts standing to the
credit of the Reserve Fund as at the Determination Date in excess of the
Reserve Fund Required Amount to the extent that such amounts were funded by
the Available Income Amount on previous Distribution Dates;
(e) following the service on the Covered Bond Guarantor of a
Notice to Pay or an Asset Coverage Test Breach Notice, amounts standing to the
credit of the Reserve Fund as at the Determination Date; and
(f) any other income receipts not referred to in paragraphs (a)
to (e) above (inclusive) of this definition received during any previous
Collection Period and standing to the credit of the Income Ledger of the GIC
Account, but excluding, subject to the Establishment Deed, any amount
receivable by the Covered Bond Guarantor under the Covered Bond Swap
Agreements,
but excluding:
(g) Third Party Amounts, which will be paid on receipt in
cleared funds to the Seller;
(h) any Swap Collateral Excluded Amounts which will be applied
in accordance with the terms of the relevant Swap Agreements; and
(i) any amounts invested in Substitution Assets during the
immediately preceding Collection Period in accordance with the Establishment
Deed.
Available Principal Amount means in relation to a Collection Period and the Determination Date
immediately following the end of that Collection Period, an amount equal to
the aggregate of (without double counting):
(a) the Principal Collections in relation to that Collection
Period less any Principal Collections applied during that Collection Period
towards the funding of Trust Further Advances in accordance with the Servicing
Deed;
(b) the proceeds of issue of, or Increase in, the Demand Note
(where such proceeds have not been applied to acquire Mortgage Loan Rights
from the Seller or to invest in Substitution Assets or Authorised Investments)
and any Excess Proceeds;
(c) the amount of any termination payment received from a Swap
Provider which is not applied to acquire a replacement Swap for the relevant
terminated Swap and the amount of any premium received from a replacement Swap
Provider which is not applied to make a termination payment to a Swap
Provider;
(d) prior to the service on the Covered Bond Guarantor of a
Notice to Pay or an Asset Coverage Test Breach Notice, amounts standing to the
credit of the Reserve Fund as at the Determination Date in excess of the
Reserve Fund Required Amount, to the extent that such amounts were funded by a
Reserve Fund Demand Note Funding; and
(e) any other principal receipts not referred to in paragraphs
(a) to (d) above (inclusive) of this definition received during any previous
Collection Period and standing to the credit of the Principal Ledger of the
GIC Account, but excluding, subject to the Establishment Deed, any amount of
principal received by the Covered Bond Guarantor under the Swap Agreements,
but excluding:
(f) any Swap Collateral Excluded Amounts which will be applied
in accordance with the terms of the relevant Swap Agreements;
(g) any amounts invested in Substitution Assets during the
immediately preceding Collection Period in accordance with clause 22.1 of the
Establishment Deed; and
(h) all amounts applied towards the acquisition of any Mortgage
Loan Rights during the immediately preceding Collection Period.
Bank Bill Rate in relation to a specified term means the rate expressed as a percentage per
annum determined by ASX Limited (ASX) and published at approximately 10.30
a.m. Sydney time (or such other time at which such rate customarily appears on
that page (Publication Time) on the first day of that specified term on the
Thompson Reuters screen page "BBSW" having a tenor equal to that specified
term. If the relevant rate is not published on the Thompson Reuters screen
page at that time, then the Bank Bill Rate means the rate expressed as a
percentage per annum determined by ASX and published at approximately 11.00
a.m. Sydney time (or such other time that is 30 minutes after the then
prevailing Publication Time) on that day on the Bloomberg LLP screen page
"AFMB" having a tenor equal to that specified term. If a rate cannot be
determined in accordance with the foregoing procedures, then the Bank Bill
Rate means such rate as is specified by the Trust Manager (other than in the
case of the Account Bank Agreement, in which case such determination is to be
made by the Account Bank) at or around that time on that day, having regard,
to the extent possible, to comparable indices then available.
Base Prospectus means this base prospectus prepared in connection with the Programme and
constituting a base prospectus for the purposes of Article 8 of the Prospectus
Regulation and the UK Prospectus Regulation.
Basis Swap means a basis swap transaction as evidenced by a confirmation that
supplements, forms part of and is subject to, an Interest Rate Swap Master
Agreement, pursuant to which the Covered Bond Guarantor pays to the relevant
Interest Rate Swap Provider an amount in respect of Mortgage Loans forming
part of the Assets of the Trust that do not bear interest at a fixed rate and
the relevant Interest Rate Swap Provider pays to the Covered Bond Guarantor an
amount calculated by reference to the Bank Bill Rate.
BBSW Rate has the meaning given to it in Condition 4(b)(ii)(A)(III).
Bearer Covered Bonds means Covered Bonds in bearer form.
Bearer Definitive Covered Bonds has the meaning given to it in the Conditions.
Bearer Global Covered Bonds means together, the Temporary Bearer Global Covered Bond and the Permanent
Bearer Global Covered Bond, and Bearer Global Covered Bond means either one of
them.
Benchmarks Regulation means the Regulation (EU) No. 2016/1011.
BKBM has the meaning given to it in Condition 4(b)(ii)(A)(3).
Bond Trust Deed means the bond trust deed dated on or about the Programme Date, between the
Issuer, the Covered Bond Guarantor, the Trust Manager, and the Bond Trustee,
each of the schedules thereto and any supplemental bond trust deed and
schedules (if any), thereto, as amended, restated, supplemented, replaced or
novated from time to time.
Bond Trustee means BNY Trust Company of Australia Limited ABN 49 050 294 052, in its
capacity as bond trustee under the Bond Trust Deed together with any
additional or replacement bond trustee appointed from time to time in
accordance with the terms of the Bond Trust Deed.
BOQ means Bank of Queensland Limited ABN 32 009 656 740.
BOQ Group means BOQ and the group of companies of which it is the parent company.
BOQ Trust has the meaning given to it in the section "Overview of the Principal
Documents - Mortgage Sale Agreement - BOQ Trust" of this Prospectus.
BOQ Trustee means, in respect of a BOQ Trust, the Covered Bond Guarantor as bare trustee
of that BOQ Trust.
Borrower in relation to a Mortgage Loan means the person or persons to whom a loan or
other financial accommodation has been provided under that Mortgage Loan and
includes, where the context requires, the mortgagor under the corresponding
Mortgage.
BQLM means B.Q.L. Management Pty Ltd ABN 87 081 052 342.
Break Benefits in relation to a Mortgage Loan forming part of the Assets of the Trust, means
any benefits payable to a Borrower under the terms of that Mortgage Loan or as
required by law (and to the extent the former is inconsistent with the latter,
the latter will prevail) upon, and solely in respect of, the early termination
of a given fixed interest rate relating to all or part of that Mortgage Loan
prior to the scheduled termination of that fixed interest rate.
Break Costs means any costs payable by the Borrower, the insurer under a Mortgage
Insurance Policy or any other person in relation to a Mortgage Loan forming
part of the Assets of the Trust (or a Mortgage Loan which was immediately
prior to its being written off by the Servicer in accordance with the
Servicing Guidelines or the date that it was assigned under a Mortgage
Insurance Policy, an Asset of the Trust) arising from the early termination of
that Mortgage Loan or the early termination of a fixed interest rate period
under that Mortgage Loan.
Business Day means in the case of Covered Bonds, any day (other than a Saturday, Sunday or
public holiday) which is:
(a) a day on which banks and foreign exchange markets settle
payments and are open for business (including dealing in foreign exchange and
foreign currency deposits) in Sydney, Brisbane, Melbourne and any Additional
Business Centre specified in the Applicable Final Terms (or, in the case of
Exempt Covered Bonds, the Applicable Pricing Supplement); and
(b) in the case of any sum payable, either:
(i) in relation to any sum payable in a Specified Currency
other than Australian Dollars, a day on which commercial banks and foreign
exchange markets settle payments and are open for general business (including
dealing in foreign exchange and foreign currency deposits) in the principal
financial centre of the country of the relevant Specified Currency (if other
than Sydney, Brisbane, Melbourne and any Additional Business Centre specified
in the Applicable Final Terms) (or, in the case of Exempt Covered Bonds, the
Applicable Pricing Supplement); or
(ii) in relation to any Covered Bonds denominated or payable in
euro, a day on which the Trans-European Automated Real-time Gross Settlement
Express Transfer system or any successor or replacement for that system (T2)
is open.
CDOR has the meaning given to it in Condition 4(b)(ii)(A)(3).
Calculation Agency Agreement means the agreement in substantially the form set out in schedule 1 of the
Principal Agency Agreement.
Calculation Agent means in relation to all or any Series of the Covered Bonds, the person
initially appointed as calculation agent in relation to such Covered Bonds by
the Issuer and the Covered Bond Guarantor pursuant to the relevant Agency
Agreement or such other person specified in the Applicable Final Terms (or, in
the case of Exempt Covered Bonds, the Applicable Pricing Supplement) or, if
applicable, any successor or separately appointed calculation agent in
relation to all or any Series of the Covered Bonds.
Calculation Management Services has the meaning given to it in the section "Overview of the Principal
Documents - Management Agreement" of this Prospectus.
Capital Unit means a Unit in the Trust which is designated as a "Capital Unit" in the
Instrument Register.
Capital Unitholder means a person registered as the holder of a Capital Unit in the Trust in the
Instrument Register.
Charged Property means all the Assets of the Trust acquired by, or accruing to, the Covered
Bond Guarantor as trustee of the Trust after the date of first execution of
the Security Deed.
Clearing Systems means Euroclear, Clearstream, Luxembourg and/or the Austraclear System and
will be deemed to include references to any additional or alternative clearing
system as is approved by the Issuer, the Principal Paying Agent (other than in
the case of A$ Registered Covered Bonds) and the Bond Trustee or as may
otherwise be specified in the Applicable Final Terms (or, in the case of
Exempt Covered Bonds, the Applicable Pricing Supplement).
Clearstream, Luxembourg has the meaning given to it in Condition 1.
Closing Date means:
(a) the date specified by the Seller to the Covered Bond
Guarantor and the Trust Manager in a Sale Notice (if any) to be the Closing
Date (or such other date as the Trust Manager may notify the Covered Bond
Guarantor and the Seller in accordance with that Sale Notice); and
(b) in relation to a Mortgage Loan, the Closing Date (as
determined under paragraph (a)) for that Mortgage Loan.
Code means the U.S. Internal Revenue Code of 1986, as amended.
Collateral Security means in respect of a Mortgage Loan:
(a) any:
(i) Security Interest; or
(ii) guarantee, indemnity or other assurance,
which secures or otherwise provides for the repayment or payment of that
Mortgage Loan but does not include the Mortgage relating to that Mortgage
Loan; or
(b) any Mortgage Insurance Policy or Insurance Policy in respect
of the Mortgage relating to the Mortgage Loan or the Land secured by the
Mortgage relating to that Mortgage Loan.
Collection Period means:
(a) with respect to the first Determination Date, the period
commencing on (and including) the first Closing Date and ending on the last
day of the calendar month in which the first Closing Date occurs; and
(b) with respect to each subsequent Determination Date, the
calendar month immediately preceding that Determination Date.
Collections in relation to a Collection Period means the aggregate of the following
amounts (without double counting) in respect of the Mortgage Loans then
forming part of the Assets of the Trust:
(a) A less the sum of (B + C) where:
(i) A = the sum of amounts for which a credit entry is made
during the period to the accounts established in the records for those
Mortgage Loans;
(ii) B = amounts for which a credit entry is made to the
accounts established in the records for those Mortgage Loans which relates to
any Defaulted Amount on those Mortgage Loans during the period; and
(iii) C = reversals made during the period to the accounts
established in the records in respect of those Mortgage Loans where the
original credit entry (or part thereof) was made in error or was made but
subsequently reversed due to funds not being cleared;
(b) any Recoveries received by or on behalf of the Covered Bond
Guarantor under or in respect of the Mortgage Loans and the related Mortgages
and Collateral Securities during that period (less any reversals made during
the period in respect of Recoveries where the original debit entry (or part
thereof) was in error);
(c) the proceeds from any sale of Mortgage Loans during that
Collection Period pursuant to the terms of the Establishment Deed or the
Mortgage Sale Agreement (but not including any such proceeds that comprise
accrued interest or arrears of interest) that have been, or are to be, on the
immediately following Distribution Date, credited to the Principal Ledger of
the GIC Account;
(d) in respect of any sale or transfer of Mortgage Loans during
that Collection Period pursuant to the terms of the Establishment Deed or the
Mortgage Sale Agreement:
(i) the proceeds of such sale or transfer to the extent the
proceeds comprise accrued interest or arrears of interest (if any) that has
been, or is to be, on the immediately following Distribution Date credited to
the Income Ledger of the GIC Account; and
(ii) that are purchased by the Seller in accordance with clause
8 of the Mortgage Sale Agreement, interest on the related amount that will be
paid by the Seller on the immediately following Distribution Date in
accordance with clause 8.3 of the Mortgage Sale Agreement;
(e) any amount in respect of damages or pursuant to an indemnity
received by or on behalf of the Covered Bond Guarantor as a result of a breach
of any representation or warranty or undertaking by any party to the Programme
Documents; and
(f) any insurance proceeds received during the period by or on
behalf of the Covered Bond Guarantor in accordance with any Mortgage Insurance
Policy or any Insurance Policy,
but excluding, for the avoidance of doubt any amount debited during the period
to the accounts established in the records for those Mortgage Loans
representing fees or charges imposed by any Governmental Authority, bank
accounts debits tax or similar tax or duty imposed by any Governmental
Authority (including any tax or duty in respect of payments or receipts to or
from bank or other accounts) or insurance premiums paid.
Compound Daily SONIA has the meaning given to it in Condition 4(b)(ii)(C)(1) of the Conditions.
Conditions means the terms and conditions of the Covered Bonds (as set out in schedule 1
of the Bond Trust Deed) as completed by the Applicable Final Terms (or, in the
case of Exempt Covered Bonds, the Applicable Pricing Supplement) in relation
to a particular Series or Tranche of Covered Bonds, as the same may be
modified from time to time in accordance with the Bond Trust Deed. References
herein to the Conditions are to each of such terms and conditions, or to the
relevant terms and conditions, as the context requires.
Consideration means the aggregate Current Principal Balance of the Mortgage Loans assigned
to the Covered Bond Guarantor as at the relevant Cut-Off Date.
Consumer Credit Code means the Consumer Credit Code set out in the Appendix to the Consumer Credit
(Queensland) Act 1994 or any equivalent legislation of any Australian
jurisdiction.
Conversion has the meaning given to it in Condition 6(a).
Conversion Event Date has the meaning given to it in Condition 6(a).
Corporations Act means the Corporations Act 2001 (Cth).
Couponholders has the meaning given to it in the Conditions.
Coupons has the meaning given to it in the Conditions.
Cover Pool has the meaning given to it in the section "Description of the Covered Bond
Provisions of the Australian Banking Act - Cover Pool and Eligible assets" of
this Prospectus.
Cover Pool Monitor means KPMG whose registered office is at Riparian Plaza, 71 Eagle Street,
Brisbane QLD 4000, Australia or any successor or replacement cover pool
monitor appointed from time to time in accordance with the terms of the Cover
Pool Monitor Agreement.
Cover Pool Monitor Agreement means the cover pool monitor agreement entered into on the Programme Date,
between the Cover Pool Monitor, the Covered Bond Guarantor, the Trust Manager,
the Issuer, the Seller, the Bond Trustee and the Security Trustee, as amended,
restated, supplemented, replaced or novated from time to time.
Cover Pool Monitor Report means the results of the tests conducted by the Cover Pool Monitor in
accordance with the Cover Pool Monitor Agreement to be delivered to the
Covered Bond Guarantor, the Trust Manager, the Issuer, the Bond Trustee and
the Security Trustee, substantially in the form set out in Schedule 1 of the
Cover Pool Monitor Agreement.
Covered Bond Guarantee means the unconditional and irrevocable guarantee by the Covered Bond
Guarantor under the Bond Trust Deed for the payment of an amount equal to the
Guaranteed Amounts in respect of the Covered Bonds.
Covered Bond Guarantee Acceleration Notice means, following the occurrence of a Covered Bond Guarantor Event of Default
which is continuing, a notice in writing given by the Bond Trustee to the
Issuer and the Covered Bond Guarantor (copied to the Trust Manager and the
Security Trustee), that each Covered Bond of each Series is, and each Covered
Bond of each Series will as against the Issuer (if not already due and
repayable against it following an Issuer Event of Default) and as against the
Covered Bond Guarantor, thereupon immediately become, due and repayable at its
Early Redemption Amount together with accrued interest as provided in and in
accordance with the Bond Trust Deed and thereafter the Security will become
enforceable.
Covered Bond Guarantor means Perpetual Corporate Trust Limited ABN 99 000 341 533 incorporated with
limited liability in the Commonwealth of Australia and having its registered
office at Level 18, 123 Pitt Street, Sydney, NSW 2000, as trustee of the BOQ
Covered Bond Trust and any Substitute Covered Bond Guarantor appointed from
time to time in accordance with the terms of the Establishment Deed.
Covered Bond Guarantor Event of Default has the meaning given to it in Condition 9(b).
Covered Bondholders means the holders of the Covered Bonds and, for the avoidance of doubt from
time to time.
Covered Bonds means the covered bonds issued or to be issued pursuant to the Programme
Agreement and which are or are to be constituted under or in accordance with
the Bond Trust Deed (including any A$ Registered Covered Bonds), which covered
bonds may be represented by a Global Covered Bond or any Definitive Covered
Bond and includes any replacements or a Covered Bond issued pursuant to
Condition 10, and each a Covered Bond.
Covered Bond Swap means each currency and/or interest rate transaction entered into with respect
to a Series or Tranche of Covered Bonds, as evidenced by a confirmation that
supplements, forms part of and is subject to, a Covered Bond Swap Master
Agreement (and which, for the avoidance of doubt, does not include the
Interest Rate Swaps).
Covered Bond Swap Agreement means a Covered Bond Swap Master Agreement, together with one or more
confirmations thereunder, each evidencing a Covered Bond Swap.
Covered Bond Swap Master Agreement means a Swap Master Agreement entered into between the Covered Bond Guarantor,
the Trust Manager, the Security Trustee and a Covered Bond Swap Provider
governing one or more Covered Bond Swaps, as amended, restated, supplemented,
replaced or novated from time to time.
Covered Bond Swap Provider means, in relation to a Covered Bond Swap, the entity appointed as covered
bond swap provider from time to time under the relevant Covered Bond Swap
Agreement, together with any transferee, successor thereto or replacement
Covered Bond Swap Provider.
Covered Bond Swap Rate means in relation to a Covered Bond or a Series or Tranche of Covered Bonds,
the exchange rate specified as being the Swap Rate in the Covered Bond Swap
relating to such Covered Bond or Series or Tranche of Covered Bonds or, if
such Covered Bond Swap has terminated, the applicable spot rate.
Current Principal Balance means in relation to any Mortgage Loan forming part of the Assets of the Trust
as at any given date, the principal balance of that Mortgage Loan to which the
Seller applies the relevant interest rate to and at which interest on that
Mortgage Loan accrues interest, and is the aggregate (but avoiding double
counting) of:
(a) the original principal amount advanced to the relevant
Borrower and any further amount advanced on or before any given date to the
relevant Borrower under that Mortgage Loan secured or intended to be secured
by the Collateral Security;
(b) the amount of any Further Advances secured or purported to
be secured by the Collateral Security; and
(c) any interest or expenses that have been capitalised,
less any repayment or payment of any of the foregoing made on or before the
end of the AU Business Day immediately preceding that given date.
Cut-Off Date means the date specified by the Seller as such in a Sale Notice (or such other
date as the Trust Manager may notify the Covered Bond Guarantor and the Seller
in accordance with that Sale Notice).
Day Count Fraction has the meaning given to it in Condition 4(a).
Dealer and Dealers in relation to any issuance of Covered Bonds, means NAB and any other dealer
appointed from time to time in accordance with the Programme Agreement.
Deed of Accession means any deed of accession entered into between, amongst others, the Covered
Bond Guarantor, the Trust Manager and Security Trustee (on behalf of all
Secured Creditors) on the terms substantially set out in the form set out in
schedule 1 of the Security Deed.
Defaulted Amount in relation to a Collection Period means the aggregate principal amount of any
Mortgage Loans which have been written off by the Servicer as uncollectible
during that Collection Period.
Defaulted Mortgage Loan means any Mortgage Loan in respect of which the Current Principal Balance is
greater than the Scheduled Balance and is calculated to be greater than 90
days in arrears in accordance with the relevant Loan Agreement.
Definitions Schedule has the meaning given to it in the Conditions.
Definitive Covered Bond means a Bearer Definitive Covered Bond and/or, as the context may require, a
Registered Definitive Covered Bond.
Demand Note has the meaning given to it in the section "Overview of the Principal
Documents - Demand Note Subscription Agreement" of this Prospectus.
Demand Noteholder means at any given time the person then appearing in the Instrument Register
as the holder of the Demand Note.
Demand Note Funding Date means, in relation to a Demand Note, the date specified in the Demand Note
Funding Request.
Demand Note Funding Request means the request received by the Demand Note Subscriber from the Covered Bond
Guarantor to either subscribe for the Demand Note or fund an Increase in the
Demand Note (which has been previously issued).
Demand Note Interest Period means:
(a) in relation to the first Demand Note Interest Period, the
period commencing on and including the first Demand Note Funding Date and
ending on (but excluding) the next Distribution Date; and
(b) in relation to all subsequent Demand Note Interest Periods,
the period commencing on (and including a Distribution Date) and ending on
(but excluding) the next Distribution Date.
Demand Note Subscriber means BOQ.
Demand Note Subscription Agreement means the demand note subscription agreement dated on or about the Programme
Date between the Covered Bond Guarantor, the Trust Manager, the Demand Note
Subscriber, the Seller and the Security Trustee, as amended, restated,
supplemented, replaced or novated from time to time.
Designated Account has the meaning given to it in Condition 5(d).
Designated Bank has the meaning given to it in Condition 5(d).
Determination Date means the date which is three AU Business Days prior to a Distribution Date.
Determination Period has the meaning given to it in Condition 4(a).
Distribution Compliance Period has the meaning given to it in Condition 2(g).
Distribution Date means:
(a) the 22nd day of each calendar month (or if such a day is not
an AU Business Day, the next AU Business Day); and
(b) the Vesting Date.
Due for Payment means the requirement by the Covered Bond Guarantor to pay any Guaranteed
Amount following the delivery of a Notice to Pay on the Covered Bond
Guarantor:
(a) prior to the occurrence of a Covered Bond Guarantor Event of
Default and the service of a Covered Bond Guarantee Acceleration Notice on the
Issuer and the Covered Bond Guarantor:
(i) (if paragraph (ii) does not apply) on the date of the
Original Due for Payment Date; and
(ii) in relation to any Guaranteed Amounts in respect of the
Final Redemption Amount payable on the Final Maturity Date for a Series of
Covered Bonds only, on the Extended Due for Payment Date, but only to the
extent that the Covered Bond Guarantor having received a Notice to Pay no
later than the date falling one Business Day prior to the Extension
Determination Date does not pay Guaranteed Amounts equal to the Final
Redemption Amount in respect of such Series of Covered Bonds by the Extension
Determination Date, as the Covered Bond Guarantor has insufficient moneys
available under the Guarantee Priority of Payments to pay such Guaranteed
Amounts in full on the earlier of:
(A) the date which falls two Business Days after service of such
Notice to Pay on the Covered Bond Guarantor or, if later, the Final Maturity
Date (or, in each case, after the expiry of the grace period set out in
Condition 9(b)(i)) under the terms of the Covered Bond Guarantee; or
(B) the Extension Determination Date,
or if, in either case, such day is not a Business Day, the next following
Business Day. For the avoidance of doubt, Due for Payment does not refer to
any earlier date upon which payment of any Guaranteed Amounts may become due
under the guaranteed obligations, by reason of prepayment, acceleration of
maturity, mandatory or optional redemption or otherwise; or
(b) following the occurrence of a Covered Bond Guarantor Event
of Default, the date on which a Covered Bond Guarantee Acceleration Notice is
served on the Issuer and the Covered Bond Guarantor.
Earliest Maturing Covered Bonds has the meaning given to it in Condition 6(a).
Early Redemption Amount in relation to a Series of Covered Bonds, means the early redemption amount
determined in accordance with Condition 6(f).
EEA European Economic Area.
Eligibility Criteria has the meaning given to it in the section "Overview of the Principal
Documents - Mortgage Sale Agreement - Eligible Mortgage Loans" of this
Prospectus.
Eligible Mortgage Loan means, on any day, a Mortgage Loan which satisfies the Eligibility Criteria on
that day.
Established Rate has the meaning given to it in Condition 5(j).
Establishment Deed means the establishment deed dated on or about the Programme Date between the
Covered Bond Guarantor, the Issuer, the Trust Manager, the Security Trustee,
the Seller and the Servicer.
EURIBOR has the meaning given to it in Condition 4(b)(ii)(A)(3).
Euro means the lawful currency for the time being of the member states of the
European Union that adopt the single currency introduced at the start of the
third stage of European economic and monetary union pursuant to the Treaty.
Eurobond Basis has the meaning given to it in Condition 4(b)(iv)(F).
Euroclear has the meaning given to it in Condition 1.
EUWA means the European Union (Withdrawal) Act 2018.
Excess Proceeds means all moneys received by the Bond Trustee following the occurrence of an
Issuer Event of Default and delivery of an Issuer Acceleration Notice and a
Notice to Pay, from the Issuer or any receiver, manager, liquidator,
administrator, controller, statutory manager or other similar official
appointed in relation to the Issuer following the occurrence of an Issuer
Event of Default and service of an Issuer Acceleration Notice and a Notice to
Pay.
Exchange Date means on or after the date which is 40 days after a Temporary Bearer Global
Covered Bond is issued.
Exchange Notice has the meaning given to it in Condition 5(i)(iv).
Excluded Scheduled Interest Amounts has the meaning given to it in the definition of Scheduled Interest in this
Prospectus.
Excluded Scheduled Principal Amounts has the meaning given to it in the definition of Scheduled Principal in this
Prospectus.
Excluded Swap Termination Amount means, in relation to a Swap Agreement, an amount equal to the amount of any
termination payment due and payable:
(a) to the relevant Swap Provider as a result of a Swap Provider
Default with respect to such Swap Provider and such Swap Agreement; or
(b) to the relevant Swap Provider following a Swap Provider
Downgrade Event with respect to such Swap Provider and such Swap Agreement.
Exempt Covered Bonds means Covered Bonds for which no prospectus is required to be published under
the Prospectus Regulation or the FSMA.
Existing Covered Bonds means, at any time, the Covered Bonds of all Series outstanding at such time.
Extended Due for Payment Date has the meaning given to it in Condition 6(a).
Extension Determination Date has the meaning given to it in Condition 6(a).
Extraordinary Resolution has the meaning given to it in schedule 4 of the Bond Trust Deed.
FCA means the Financial Conduct Authority.
Final Maturity Date means, in relation to a Series of Covered Bonds, the Interest Payment Date
specified as such in the Applicable Final Terms (or, in the case of Exempt
Covered Bonds, the Applicable Pricing Supplement) on which such Series of
Covered Bonds is required to be redeemed at their Principal Amount Outstanding
in accordance with the Conditions.
Final Redemption Amount means, in relation to a Series of Covered Bonds, the meaning given in the
Applicable Final Terms (or, in the case of Exempt Covered Bonds, the
Applicable Pricing Supplement).
Final Terms means the final terms prepared in relation to each Series or Tranche of
Covered Bonds (other than Exempt Covered Bonds) issued under the Programme
(substantially in the form set out in this Prospectus) and giving details of
that Series or Tranche and, in relation to any particular Series or Tranche of
Covered Bonds (other than Exempt Covered Bonds) and which, as appropriate,
will constitute final terms for the purposes of Article 8.2 of the Prospectus
Regulation and the UK Prospectus Regulation.
Finance Charge Collections in relation to a Collection Period means the aggregate of the following
amounts (without double counting) as determined by the Trust Manager in
respect of the Mortgage Loans then forming part of the Assets of the Trust:
(a) the aggregate of:
(i) all debit entries representing interest or other charges that
have been charged (net of any interest off-set benefits under the Interest
Off-Set Accounts in relation to those Mortgage Loans or other charges charged)
during that period made to the accounts established in the records for those
Mortgage Loans;
(ii) subject to paragraph (iii) below of this definition, any Break
Costs charged in relation to those Mortgage Loans during a prior period and
received by or on behalf of the Covered Bond Guarantor during that period; and
(iii) any amounts received by or on behalf of the Covered Bond Guarantor
during that period from the enforcement of any Mortgage or in accordance with
any Mortgage Insurance Policy in relation to those Mortgage Loans, where such
amounts:
(A) exceed the aggregate of the costs of enforcement of any such
Mortgage and the interest and principal then outstanding on the related
Mortgage Loan in respect of which the amounts are received; and
(B) represent part or all of the Break Costs charged during a
prior period on those Mortgage Loans in respect of which the amounts are
received,
less the aggregate of:
(iv) any reversals made during that period in respect of interest or
other charges in relation to any of the accounts established in the records
for those Mortgage Loans where the original debit entry (or part thereof) was
in error;
(v) any Break Benefits paid to a Borrower in relation to those
Mortgage Loans during that period; and
(vi) any Break Costs charged to the accounts established in the records
for those Mortgage Loans during that period that have not been received by or
on behalf of the Covered Bond Guarantor during that period;
(b) in respect of any sale or transfer of Mortgage Loans during
that Collection Period pursuant to the terms of the Establishment Deed or the
Mortgage Sale Agreement:
(i) the proceeds of such sale or transfer to the extent the proceeds
comprise accrued interest or arrears of interest (if any) that has been, or is
to be, on the immediately following Distribution Date credited to the Income
Ledger of the GIC Account; and
(ii) that are purchased by the Seller in accordance with clause 8 of
the Mortgage Sale Agreement, interest on the related amount that will be paid
by the Seller on the immediately following Distribution Date in accordance
with clause 8.3 of the Mortgage Sale Agreement; and
(c) any amount in respect of damages or pursuant to an indemnity
received by or on behalf of the Covered Bond Guarantor as a result of a breach
of any representation or warranty or undertaking by any party to the Programme
Documents which represents amounts on account of interest, as determined by
the Trust Manager,
but excluding, for the avoidance of doubt any amount debited during the period
to the accounts established in the records for those Mortgage Loans
representing fees or charges imposed by any Governmental Authority, bank
accounts debits tax or similar tax or duty imposed by any Governmental
Authority (including any tax or duty in respect of payments or receipts to or
from bank or other accounts) or insurance premiums paid.
Financial Reports has the same meaning given to the term "financial statements" in section 9 of
the Corporations Act.
Financial Year means, in relation to the Trust, a period of 12 months ending on and including
the next following Annual Accounting Date, except for the first Financial Year
which is the period beginning on the Programme Date and ending on 31 August
2017, unless the Trust is a member of a Tax Consolidated Group, in which case
Financial Year means the same period as the 'income year' of the head company
of the Tax Consolidated Group for the purposes of the Tax Act, provided in
either case that:
(a) the first Financial Year of the Trust is the period
commencing on the date of constitution of the Trust and ending on the next
succeeding 30 June or the last day of the then current period which is the
income year of the head company of the Tax Consolidated Group for the purposes
of the Tax Act; and
(b) the last Financial Year of the Trust is the period to the
date of termination of the Trust from the immediately preceding 1 July or the
commencement of the then current period which is the income year of the head
company of the Tax Consolidated Group for the purposes of the Tax Act.
Fitch means Fitch Australia Pty Ltd. and includes any successor to its ratings
business.
Fitch Specified Ratings means a credit rating of:
(a) short-term, unsecured, unsubordinated and unguaranteed debt
obligations of at least F1 by Fitch; or
(b) long term, unsecured, unsubordinated and unguaranteed debt
obligations of at least A by Fitch.
First Determination Date has the meaning given to it in the Section "Overview of the Principal
Documents - Establishment Deed - Asset Coverage Test" of this Prospectus.
First Refinance Date has the meaning given to it in the Section "Overview of the Principal
Documents - Establishment Deed - Sale of Selected Mortgage Loan Rights
following service of a Notice to Pay" of this Prospectus.
First Layer of Collateral Securities in relation to a Mortgage Loan means:
(a) the Collateral Securities (other than any Mortgage Insurance
Policy relating to that Mortgage Loan or any related Insurance Policies) from
time to time appearing in the records of the Seller in relation to that
Mortgage Loan to be intended as security for that Mortgage Loan;
(b) any Mortgage Insurance Policy relating to that Mortgage
Loan; and
(c) any Insurance Policies relating to that Mortgage Loan,
notwithstanding that by their terms the Collateral Securities (other than the
Mortgage Insurance Policies or any Insurance Policies) may also secure other
liabilities to the Seller.
Fixed Coupon Amount has the meaning given to it in Condition 4(a).
Fixed Interest Period has the meaning given to it in Condition 4(a).
Fixed Rate Mortgage Loans means each Mortgage Loan which is subject to a fixed interest rate for a
specified period of time and at the expiration of that period is generally
subject to a variable rate.
Fixed Rate Swap means each fixed rate swap transaction as evidenced by a confirmation that
supplements, forms part of and is subject to, an Interest Rate Swap Master
Agreement pursuant to which the Covered Bond Guarantor pays the relevant
Interest Rate Swap Provider an amount in respect of Fixed Rate Mortgage Loans
forming part of the Assets of the Trust and the relevant Interest Rate Swap
Provider pays to the Covered Bond Guarantor an amount calculated by reference
to the Bank Bill Rate.
Floating Rate Convention has the meaning given to it in Condition 4(b)(C).
Following Business Day Convention has the meaning given to it in Condition 4(b)(D).
FSMA means the United Kingdom Financial Services and Markets Act 2000.
Further Advances means in relation to a Mortgage Loan forming part of the Assets of the Trust,
any advances of further money by the Seller to the relevant Borrower which is
recorded as a debit to the account in respect of that Mortgage Loan in the
Seller's records in accordance with the Mortgage Sale Agreement, and each a
Further Advance.
GIC Account means the account in the name of the Covered Bond Guarantor held with the
Account Bank and maintained subject to the terms of the Account Bank Agreement
and the GIC Account Mandate and/or such additional or replacement account as
may from time to time be in place pursuant to the terms of the Account Bank
Agreement.
GIC Account Mandate means the resolutions, instructions and signature authorities relating to the
GIC Account substantially in the form set out in schedule 1 to the Account
Bank Agreement.
Global Covered Bond has the meaning given to it in the Conditions.
Governmental Authority means any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government in any relevant
jurisdiction.
GST means the goods and services tax imposed pursuant to the GST Act.
GST Act means A New Tax System (Goods and Services Tax) Act 1999 (Cth).
Guarantee Priority of Payments has the meaning given to it in the section "Cashflows - Guarantee Priority of
Payments" of this Prospectus.
Guaranteed Amounts means (a) prior to the service of a Covered Bond Guarantee Acceleration
Notice, with respect to any Original Due for Payment Date or any Extended Due
for Payment Date, the sum of Scheduled Interest and Scheduled Principal, in
each case, payable on that Original Due for Payment Date or any Extended Due
for Payment Date, or (b) after service of a Covered Bond Guarantee
Acceleration Notice, an amount equal to the relevant Early Redemption Amount
as specified in the Conditions or, if applicable, the Applicable Final Terms
(or, in the case of Exempt Covered Bonds, the Applicable Pricing Supplement)
plus all accrued and unpaid interest and at other amounts due and payable in
respect of the Covered Bonds, Excluded Scheduled Interest Amounts, all
Excluded Scheduled Principal Amounts (whenever the same arose) and all amounts
payable by the Covered Bond Guarantor under the Bond Trust Deed.
HIBOR has the meaning given to it in Condition 4(b)(ii)(A)(3).
Higher Redemption Amount means the amount (if any) specified in the Applicable Final Terms (or, in the
case of Exempt Covered Bonds, the Applicable Pricing Supplement).
In Specie Failure means a failure (as determined by the Demand Noteholder) for any reason
whatsoever by the Covered Bond Guarantor (acting at the direction of the Trust
Manager) or the Security Trustee, as applicable, to distribute Mortgage Loan
Rights to the Demand Noteholder as an in specie distribution in satisfaction
of the Demand Note.
In Specie Mortgage Loan Rights means any Mortgage Loan Rights identified by the Trust Manager for the
purposes of an in specie distribution to the Demand Noteholder in accordance
with the applicable Priority of Payments.
Income Ledger means the ledger of such name maintained by the Trust Manager pursuant to the
Management Agreement to record credits of certain items described in the
definition of Available Income Amount and debits in accordance with the terms
of the Establishment Deed.
Income Unit means the Unit in the Trust which is designated as the "Income Unit" in the
Instrument Register.
Income Unitholder means the person registered as the holder of the Income Unit in the Trust in
the Instrument Register.
Increase means the funding of an increase in the principal amount outstanding of the
Demand Note previously issued to the Demand Note Subscriber.
Indexed Valuation means at any date in relation to any Mortgage Loan secured over any Mortgaged
Property:
(a) where the Latest Valuation of that Mortgaged Property is
equal to or greater than the Australian Bureau of Statistics Indexed Valuation
as at that date, the Australian Bureau of Statistics Indexed Valuation; or
(b) where the Latest Valuation of that Mortgaged Property is
less than the Australian Bureau of Statistics Indexed Valuation as at that
date, the Latest Valuation plus 85 per cent. of the difference between the
Latest Valuation and the Australian Bureau of Statistics Indexed Valuation.
Insolvency Event in relation to a person (for the purposes of this definition, the Relevant
Entity), means any of the following events:
(a) an order is made that the Relevant Entity be wound up;
(b) a liquidator, provisional liquidator, controller (as defined
in the Corporations Act) or administrator is appointed in respect of the
Relevant Entity or a substantial portion of its assets whether or not under an
order;
(c) except to reconstruct or amalgamate on terms reasonably
approved by the Covered Bond Guarantor (or in the case of a reconstruction or
amalgamation of the Covered Bond Guarantor, on terms reasonably approved by
the Trust Manager), the Relevant Entity enters into, or resolves to enter
into, a scheme of arrangement, deed of company arrangement or composition
with, or assignment for the benefit of, all or any class of its creditors;
(d) the Relevant Entity resolves to wind itself up, or otherwise
dissolve itself, or gives notice of its intention to do so, except to
reconstruct or amalgamate on terms reasonably approved by the Covered Bond
Guarantor (or in the case of a reconstruction or amalgamation of the Covered
Bond Guarantor, except on terms reasonably approved by the Trust Manager) or
is otherwise wound up or dissolved;
(e) the Relevant Entity is or states that it is insolvent;
(f) as a result of the operation of section 459F(1) of the
Corporations Act, the Relevant Entity is taken to have failed to comply with a
statutory demand;
(g) the Relevant Entity takes any step to obtain protection or
is granted protection from its creditors, under any applicable legislation;
(h) any writ of execution, attachment, distress or similar
process is made, levied or issued against or in relation to a substantial
portion of the body corporate's assets and is not satisfied or withdrawn or
contested in good faith by the body corporate within 21 days; or
(i) anything analogous or having a substantially similar
effect to any of the events specified above happens under the law of any
applicable jurisdiction.
Instrument Holder means a Unitholder, Intercompany Noteholder and Demand Noteholder.
Instrument Register means the register of Instrument Holders in the Trust established and
maintained in accordance with the Establishment Deed.
Instruments means the Units, Intercompany Notes and Demand Note.
Insurance Policies means any insurance policy (both present or future), other than a Mortgage
Insurance Policy, in which the Seller has an interest and which is in force
from time to time in respect of Land the subject of a Mortgage or a Collateral
Security which forms part of the Assets of the Trust.
Intercompany Noteholder means at any given time the person then appearing in the Instrument Register
as the holder of an Intercompany Note.
Intercompany Note means a note issued or to be issued by the Covered Bond Guarantor to the
Intercompany Note Subscriber pursuant to the Intercompany Note Subscription
Agreement.
Intercompany Note Interest Payment Date means, unless otherwise specified in the relevant Intercompany Note Notice (in
the form set out in schedule 2 of the Intercompany Note Subscription
Agreement), each date on which interest is payable on the relevant Covered
Bonds to which the Intercompany Note is referable.
Intercompany Note Issue Date means, in relation to an Intercompany Note, the date specified in the
Intercompany Note Subscription Request for the issue of that Intercompany
Note, which must be a Business Day.
Intercompany Note Subscriber means BOQ.
Intercompany Note Subscription Agreement means the intercompany note subscription agreement dated on or about the
Programme Date, between the Intercompany Note Subscriber, the Covered Bond
Guarantor, the Trust Manager, the Seller and the Security Trustee, as amended,
restated, supplemented, replaced or novated from time to time.
Intercompany Note Subscription Request means a request substantially in the form set out in the Intercompany Note
Subscription Agreement.
Interest Amount has the meaning given to it in Condition 4(b)(iv).
Interest Commencement Date has the meaning given to it in Condition 4(a).
Interest Off-Set Account means any interest off-set account or deposit account maintained by a Borrower
with the Seller under which interest that would otherwise be earned in respect
of the account is off-set (to the extent thereof) against interest that would
otherwise be payable on a Mortgage Loan provided by the Seller to the
Borrower.
Interest Payment Date has the meaning given to it in Condition 4(b)(i)(B).
Interest Period has the meaning given to it in Condition 4(b)(i).
Interest Rate Shortfall has the meaning given to it in the section "Overview of the Principal
Documents - Servicing Deed - Interest Rate Shortfall Test" of this Prospectus.
Interest Rate Shortfall Demand Note Funding means an Increase in the Demand Note in accordance with the Demand Note
Subscription Agreement on account of an Interest Rate Shortfall.
Interest Rate Shortfall Test has the meaning given to it in the section "Overview of the Principal
Documents - Servicing Deed - Interest Rate Shortfall Test" of this Prospectus.
Interest Rate Swap means a Basis Swap and/or a Fixed Rate Swap, as applicable.
Interest Rate Swap Agreement means an Interest Rate Swap Master Agreement, together with one or more
confirmations thereunder evidencing an Interests Rate Swap.
Interest Rate Swap Master Agreement means a Swap Master Agreement entered into between the Covered Bond Guarantor,
the Trust Manager, the Security Trustee, an Interest Rate Swap Provider and a
Standby Swap Provider, governing one or more Interest Rate Swaps, as amended,
restated, supplemented, replaced or novated from time to time.
Interest Rate Swap Provider means, in respect of an Interest Rate Swap BOQ in its capacity as interest
rate swap provider under the relevant Interest Rate Swap Agreement together
with any transferee, successor thereto or replacement Interest Rate Swap
Provider and, in respect of a Fixed Rate Swap, the relevant Standby Swap
Provider when acting as the fixed rate swap provider under that Fixed Rate
Swap together with any transferee, successor thereto or replacement Standby
Swap Provider.
ISDA means the International Swaps and Derivatives Association, Inc.
ISDA 1995 Credit Support Annex means the ISDA 1995 Credit Support Annex (Bilateral Form - Transfer) as
published by ISDA.
ISDA Master Agreement means the 2002 ISDA master agreement, as published by ISDA.
Issue Date means a date on which the Issuer issues Covered Bonds under the Programme.
Issue Price means, in relation to a Series or Tranche (as applicable) of Covered Bonds,
the price, generally expressed as a percentage of the nominal amount of the
Covered Bonds, at which the Covered Bonds will be issued and which is
specified in the Applicable Final Terms (or, in the case of Exempt Covered
Bonds, the Applicable Pricing Supplement).
Issuer means BOQ.
Issuer Acceleration Notice has the meaning given to it in Condition9(a).
Issuer Event of Default has the meaning given to it in Condition 9(a).
Junior Demand Note Component has the meaning given to it in the section "Overview of the Principal
Documents - Demand Note Subscription Agreement" of this Prospectus.
Land means:
(a) land (including tenements and hereditaments corporeal and
incorporeal and every estate and interest in it whether vested or contingent,
freehold or Crown leasehold, the term of which lease is expressed to expire
not earlier than five years after the maturity of the relevant Mortgage, and
whether at law or in equity) situated in Australia and including any fixtures
to land; and
(b) any parcel and any lot, common property and land comprising
a parcel within the meaning of the Strata Schemes (Freehold Development) Act
1973 (New South Wales) or the Community Land Development Act 1989 (New South
Wales) or any equivalent legislation in any other Australian jurisdiction.
Latest Valuation means, in relation to the Land the subject of a Mortgaged Property, the value:
(a) given to the Land by the most recent valuation report held
by the Seller; or
(b) in the absence of such a valuation report, the value of the
Land most recently determined by the Seller or the Servicer in accordance with
its credit policies.
Lead Manager means, in relation to any Series or Tranche of Covered Bonds, the person named
as the Lead Manager in the applicable Subscription Agreement.
Ledgers means each of the following ledgers established and maintained by the Covered
Bond Guarantor or the Trust Manager on its behalf:
(a) the Principal Ledger;
(b) the Income Ledger; and
(c) the Reserve Ledger.
Legislated Collateralisation Test has the meaning given to it in the section "Structure Overview - Structure
Overview -Legislated Collateralisation Test" of this Prospectus.
Liabilities means, in respect of any person, any losses, damages, costs, charges, awards,
claims, demands, expenses, judgments, actions, proceedings or other
liabilities whatsoever including properly incurred legal fees and penalties
incurred by that person, and Liability is to be construed accordingly.
Loan Agreement means, with respect to a Mortgage Loan, such of the following as evidence the
obligation of a Mortgagor to repay that Housing Loan and the other terms of
that Mortgage Loan:
(a) any agreement (other than a document referred to in
paragraph (b)); or
(b) the relevant Mortgage, the relevant letter of offer or both,
countersigned by, or accepted in writing by, or by the conduct of, the
Borrower,
as such may be amended or replaced from time to time.
Long Maturity Covered Bond has the meaning given to it in Condition 5(b).
LVR Adjusted Mortgage Loan Balance Amount has the meaning given to it in the section "Overview of the Principal
Documents - Establishment Deed - Asset Coverage Test" of this Prospectus.
Majority Secured Creditors means Secured Creditors whose Secured Obligations amount in aggregate to more
than 66 per cent. of the total Secured Obligations.
Management Agreement means the management agreement dated on or about the Programme Date between
the Seller, the Issuer, the Servicer, the Covered Bond Guarantor, the Trust
Manager and the Security Trustee, as amended, restated, supplemented, replaced
or novated from time to time.
Minimum Redemption Amount means in respect of a Series or Tranche of Covered Bonds, the amount (if any)
specified in the Applicable Final Terms (or, in the case of Exempt Covered
Bonds, the Applicable Pricing Supplement).
Modified Following Business Day Convention has the meaning given to it in Condition 4(b)(i)(E).
Moody's means Moody's Investors Service Pty Limited ABN 61 003 399 657 and includes
any successor to its rating business.
Moody's Specified Rating means a credit rating of short-term deposit rating of at least P-1 by Moody's.
Mortgage in relation to a Mortgage Loan means each registered mortgage over Land
situated in any State or Territory of Australia and appearing on the Seller's
records as securing, amongst other things, the repayment of that Mortgage Loan
and the payment of interest and all other moneys in respect of that Mortgage
Loan notwithstanding that by its terms the mortgage may secure other
liabilities to the Seller. If, at any time after the date of the
corresponding Sale Notice, a mortgage is substituted, or added as security,
for an existing Mortgage, then with effect from the date of such addition or
substitution the definition of Mortgage will mean the substituted mortgage or
include the additional mortgage, as the case may be.
Mortgage Documents in relation to a Mortgage Loan means:
(a) the Loan Agreement (other than the Mortgage) relating to
that Mortgage Loan;
(b) the original or duplicate Mortgage documents in relation to
that Mortgage Loan (including any document evidencing any substituted or
additional Mortgage);
(c) the certificate of title, registration confirmation
statement or other indicia of title (if any) in respect of the Land the
subject of the Mortgage in relation to that Mortgage Loan;
(d) the original or duplicate of the First Layer of Collateral
Securities documents (other than the Mortgage Insurance Policies and the
Insurance Policies) in relation to that Mortgage Loan;
(e) each Mortgage Insurance Policy;
(f) any Insurance Policy (or certificate of currency for the
Insurance Policy) held by the Seller (if any) in respect of the Mortgage or
the First Layer of Collateral Securities in relation to that Mortgage Loan;
(g) each valuation report (or similar document) obtained from a
third party in connection with the Mortgage or the First Layer of Collateral
Securities in relation to that Mortgage Loan;
(h) each deed of priority or its equivalent in writing entered
into in connection with the Mortgage or the First Layer of Collateral
Securities in relation to that Mortgage Loan;
(i) each other document required to evidence the Seller's or
the Covered Bond Guarantor's interest in the above Land, the above Mortgage
and the above First Layer of Collateral Securities; and
(j) any amendment or replacement of or to any of the foregoing
such documents which is entered into, and under which rights arise, whether
before or after the commencement of business on the Cut-Off Date for that
Mortgage Loan.
Mortgage Insurance Policy means each policy in force in respect of a Mortgage Loan which forms part of
the Assets of the Trust for the insurance of principal and interest losses on
that Mortgage Loan.
Mortgage Loan means each mortgage loan assigned or to be assigned (as the case may be) to
the Covered Bond Guarantor and referred to in a Sale Notice (if issued) and,
in relation to the Seller, means a Mortgage Loan assigned to the Covered Bond
Guarantor by the Seller.
Mortgage Loan Rights means each of the following items (together with all rights, title and
interest in each of those items) assigned, or which may be assigned, as the
case may be, in accordance with the Mortgage Sale Agreement to the Covered
Bond Guarantor as trustee of the Trust or the BOQ Trust:
(a) each Mortgage Loan identified in the schedule accompanying
the Sale Notice;
(b) all Other Loans in existence from time to time in relation
to the above Mortgage Loans;
(c) all Mortgages in existence from time to time in relation to
the above Mortgage Loans;
(d) all Collateral Securities in existence from time to time in
relation to the above Mortgage Loans;
(e) all Mortgage Receivables in existence from time to time in
relation to the above Mortgage Loans; and
(f) all Mortgage Documents in existence from time to time in
relation to the above Mortgage Loans.
Mortgage Loan Scheduled Payment means in respect of a Mortgage Loan, the amount which the applicable Mortgage
Documents require a Borrower to pay on a Mortgage Loan Scheduled Payment Date
in respect of such Mortgage Loan.
Mortgage Loan Scheduled Payment Date means, in relation to any Mortgage Loan, the day on which a Borrower is
required to make a payment of interest and, if applicable, principal in
accordance with the Mortgage Documents applicable to such Mortgage Loan.
Mortgage Loan System means the electronic and manual reporting database and record keeping system
used by the Servicer to monitor Mortgage Loans, as updated and amended or
replaced from time to time.
Mortgage Receivables in relation to a Mortgage Loan means all moneys, present and future, actual or
contingent, owing at any time in respect of or in connection with that
Mortgage Loan under the corresponding Mortgage Documents, including all
principal, interest, reimbursable costs and expenses and any other amounts
incurred by or payable to the Seller (including any payments made by the
Seller on behalf of the Borrower in relation to that Mortgage Loan)
irrespective of whether:
(a) such amounts become due and payable before or after the
Cut-Off Date; and
(b) such amounts relate to advances made or other financial
accommodation provided by the Seller to the Borrower before or after the
Cut-Off Date.
Mortgage Sale Agreement means the mortgage sale agreement dated on or about the Programme Date,
between the Seller, the Covered Bond Guarantor, the Trust Manager and the
Security Trustee, as amended, restated, supplemented, replaced or novated from
time to time.
Mortgage Transfer means in relation to a Mortgage a duly executed land titles office transfer
which, upon registration at the land titles office in the relevant Australian
jurisdiction, is effective to transfer the legal title to the Mortgage to the
Covered Bond Guarantor or in accordance with the Mortgage Sale Agreement, the
Seller.
Mortgaged Property in relation to a Mortgage means the Land and all other property which is
subject to that Mortgage.
N Covered Bond means a Registered Covered Bond in definitive form made out in the name of a
specified N Covered Bondholder issued or to be issued by the Issuer in the
form of a German "Namensschuldverschreibung" and having the N Covered Bond
Conditions applicable to it annexed thereto and subject to the provisions of
the N Covered Bond Agreement relating thereto.
N Covered Bond Agreement means, in respect of any N Covered Bond, an agreement relating to an N Covered
Bond between the initial N Covered Bondholder, the Issuer, the Covered Bond
Guarantor, the Trust Manager and the Bond Trustee.
N Covered Bond Conditions means the terms and conditions of each N Covered Bond annexed thereto.
N Covered Bondholder means the registered holder of an N Covered Bond.
NAB means National Australia Bank Limited ABN 12 004 044 937.
National Consumer Credit Protection Laws means:
(a) the NCCP;
(b) the National Consumer Credit Protection (Fees) Act 2009
(Cth);
(c) the National Consumer Credit Protection (Transitional and
Consequential Provisions) Act 2009 (Cth) (Transitional Act);
(d) regulations made under any of the legislation described at
paragraphs (a) through (c) above; and
(e) Division 2 of Part 2 of the Australian Securities and
Investment Commission Act 2001 (Cth), so far as it relates to obligations in
respect of an Australian Credit Licence issued under the National Consumer
Credit Protection Act 2009 (Cth) or registration as a registered person under
the Transitional Act.
NCCP means the National Consumer Credit Protection Act 2009 (Cth) including the
National Credit Code annexed to that Act.
Negative Carry Factor has the meaning given in the section "Overview of the Principal Documents -
Establishment Deed - Asset Coverage Test" of this Prospectus.
Net Trust Income means, in respect of a Financial Year in relation to the Trust, the income of
the Trust for that Financial Year as determined by the Trust Manager under the
Establishment Deed.
New Secured Creditor means any person which becomes a Secured Creditor after the date upon which
the Security Deed was executed pursuant to and in accordance with the Security
Deed.
NIBOR has the meaning given to it in Condition 4(b)(ii)(A)(3).
Notice to Pay means the notice to pay (substantially in the form set out in schedule 3 to
the Bond Trust Deed) served by the Bond Trustee on the Covered Bond Guarantor
(and copied to the Security Trustee and the Trust Manager) pursuant to the
Covered Bond Guarantee which requires the Covered Bond Guarantor to make
payments of Guaranteed Amounts when they become Due for Payment in accordance
with the terms of the Covered Bond Guarantee.
Observation Period has the meaning given to it in Condition 4(b)(ii)(C)(1) of the Conditions.
Note Certificate means a certificate issued by the Covered Bond Guarantor to the Noteholder
recorded in the Instrument Register in relation to an Intercompany Note or a
Demand Note.
Objected Modification has the meaning given to it in Condition 14.
Offshore Associate has the meaning given in the section "Taxation - Australian Taxation -
Taxation of interest on Covered Bonds" of this Prospectus.
Original Due for Payment Date means, in respect of the payment of Guaranteed Amounts, prior to the
occurrence of a Covered Bond Guarantor Event of Default and following the
delivery of a Notice to Pay on the Covered Bond Guarantor, the date on which
the Scheduled Payment Date in respect of such Guaranteed Amounts occurs or, if
later, the day which is two Business Days following the date of service of a
Notice to Pay on the Covered Bond Guarantor in respect of such Guaranteed
Amounts and the Scheduled Payment Date falling on the Final Maturity Date of
such Series of Covered Bonds as if such date had been the Extended Due for
Payment Date.
Other Loan in relation to a Mortgage Loan means all loans, credit and financial
accommodation of whatever nature (other than that Mortgage Loan or any other
Mortgage Loan) the payment or repayment of which is secured by a Mortgage, or
by a Collateral Security, which also secures that Mortgage Loan.
Outstanding or outstanding means, in relation to the Covered Bonds of all or any Series, all the Covered
Bonds of such Series issued other than:
(a) those Covered Bonds which have been redeemed in full and
cancelled pursuant to the Bond Trust Deed and/or the Conditions;
(b) those Covered Bonds in respect of which the date (including,
where applicable, any deferred date) for redemption in accordance with the
Conditions has occurred and the redemption moneys (including all interest
payable thereon) have been duly paid to the Bond Trustee or to the Principal
Paying Agent in the manner provided in the Agency Agreement (and where
appropriate notice to that effect has been given to the relative Covered
Bondholders in accordance with Condition 13 and remain available for payment
against presentation of the relevant Covered Bonds and/or Coupons;
(c) those Covered Bonds which have been purchased and cancelled
in accordance with Conditions 6(g) and 6(h);
(d) those Covered Bonds which have become void or in respect of
which claims have become prescribed, in each case under Condition 8;
(e) those mutilated or defaced Covered Bonds which have been
surrendered and cancelled and in respect of which replacements have been
issued pursuant to Condition 10;
(f) (for the purpose only of ascertaining the Principal Amount
Outstanding of the Covered Bonds outstanding and without prejudice to the
status for any other purpose of the relevant Covered Bonds) those Covered
Bonds which are alleged to have been lost, stolen or destroyed and in respect
of which replacements have been issued pursuant to Condition 10; and
(g) any Global Covered Bond to the extent that it has been
exchanged for definitive Covered Bonds or another Global Covered Bond pursuant
to its provisions, the provisions of the Bond Trust Deed and the Agency
Agreement,
provided that for each of the following purposes, namely:
(i) the right to attend and vote at any meeting of the holders
of the Covered Bonds of any Series, to give instruction or direction to the
Bond Trustee and for the purposes of a resolution in writing as envisaged by
paragraph 20 of schedule 4 to the Bond Trust Deed;
(ii) the determination of how many and which Covered Bonds of
any Series are for the time being outstanding for the purposes the Bond Trust
Deed, Conditions 9 and 14and paragraphs 2, 5, 6, and 9 of schedule 4 to the
Bond Trust Deed;
(iii) any discretion, power or authority (whether contained in the
Bond Trust Deed or vested by operation of law) which the Bond Trustee is
required, expressly or impliedly, to exercise in or by reference to the
interests of the holders of the Covered Bonds of any Series; and
(iv) the determination by the Bond Trustee whether any event,
circumstance, matter or thing is, in its opinion, materially prejudicial to
the interests of the holders of the Covered Bonds of any Series,
those Covered Bonds of the relevant Series (if any) which are for the time
being held by or on behalf of or for the benefit of the Issuer or the Covered
Bond Guarantor, any Subsidiary or holding company of any of them or any other
Subsidiary of any such holding company, in each case as beneficial owner, will
(unless and until ceasing to be so held) be deemed not to remain outstanding
except in the case of the Issuer or the Covered Bond Guarantor, any Subsidiary
or holding company of any of them or any other Subsidiary of any such holding
company (each a Relevant Person) holding, by itself or together with any other
Relevant Person, all of the Covered Bonds then outstanding or, in respect of a
Series of Covered Bonds holds all Covered Bond of such Series.
Partial Portfolio means part of any portfolio of Selected Mortgage Loan Rights offered for sale
to purchasers by the Covered Bond Guarantor, or the Trust Manager on its
behalf.
Pass-Through Covered Bonds has the meaning given to it in Condition 6(a).
Paying Agents means the Principal Paying Agent (including where the Principal Paying Agent
is acting as Calculation Agent) and any other paying agent appointed pursuant
to the Principal Agency Agreement, including any additional or successor
paying agents.
Payment Day has the meaning given to it in Condition 5(g).
Penalty Payment means:
(a) any civil or criminal penalty incurred by the Covered Bond
Guarantor under the Consumer Credit Code, the National Consumer Credit
Protection Laws, section 11B of the Land Title Act 1994 (QLD), section 56C or
117 of the Real Property Act 1900 (NSW) or The Verification of Identity
Practice issued jointly by the Western Australian Registrar of Titles and
Commissioner of Titles;
(b) any money ordered to be paid by the Covered Bond Guarantor
in relation to any claim against the Covered Bond Guarantor under the Consumer
Credit Code, the National Consumer Credit Protection Laws, section 11B of the
Land Title Act 1994 (QLD), section 56C or 117 of the Real Property Act 1900
(NSW) or The Verification of Identity Practice issued jointly by the Western
Australian Registrar of Titles and Commissioner of Titles; or
(c) a payment by the Covered Bond Guarantor, with the consent of
the Servicer, in settlement of a liability or alleged liability under the
Consumer Credit Code, the National Consumer Credit Legislation, section 11B of
the Land Title Act 1994 (QLD), section 56C or 117 of the Real Property Act
1900 (NSW) or The Verification of Identity Practice issued jointly by the
Western Australian Registrar of Titles and Commissioner of Titles,
in each case in respect of an Asset of the Trust and includes any legal costs
and expenses incurred by the Covered Bond Guarantor or which the Covered Bond
Guarantor is ordered to pay (in each case charged at the usual commercial
rates of the relevant legal services provider) in connection with paragraphs
(a) to (c) above.
Perfection of Title means, in relation to a Mortgage or Mortgage Loan forming part of the Assets
of the Trust, the date following the occurrence of a Perfection of Title Event
on which the legal title to that Mortgage or Mortgage Loan, as the case may
be, has been perfected in the name of the Covered Bond Guarantor in accordance
with the Mortgage Sale Agreement.
Perfection of Title Event has the meaning given to it in the section "Overview of the Principal
Documents - Mortgage Sale Agreement - Transfer of Title to the Mortgage Loan
Rights to the Covered Bond Guarantor" of this Prospectus.
Permanent Bearer Global Covered Bond means a global bearer covered bond in the form or substantially in the form
set out in Part 2 of schedule 2 to the Bond Trust Deed together with the copy
of the Applicable Final Terms (or, in the case of Exempt Covered Bonds, the
Applicable Pricing Supplement) annexed thereto and with such modifications (if
any) as may be agreed between the Issuer, the Principal Paying Agent, the Bond
Trustee and the relevant Dealer(s), comprising some or all of the Covered
Bonds of the same Series, issued by the Issuer and the relevant Dealer(s)
relating to the Programme, the Principal Agency Agreement and the Bond Trust
Deed in exchange for the whole or part of any Temporary Bearer Global Covered
Bond issued in respect of such Covered Bonds.
Permitted Investments means:
(a) Mortgage Loan Rights;
(b) Substitution Assets;
(c) Authorised Investments; and
(d) amounts deposited in the Trust Accounts,
in each case, acquired in accordance with the Programme Documents, and
Permitted Investment means any of them.
Post-Enforcement Priority of Payments has the meaning given to it in the section "Cashflows - Post-Enforcement
Priority of Payments" of this Prospectus.
Potential Covered Bond Guarantor Event of Default has the meaning given to it in Condition 14.
Potential Issuer Event of Default has the meaning given to it in Condition 14.
PPSA means the Personal Property Securities Act 2009 (Cth).
PPS Law means:
(a) the PPSA;
(b) any regulations made at any time under the PPSA;
(c) any provision of the PPSA or regulations referred to in
paragraph (b) above; or
(d) any amendment made at any time to any other legislation as a
consequence of the PPS Law referred to in paragraphs (a) to (c) above.
PPSR means the Personal Property Securities Register established under section 147
of the PPSA.
Pre-Issuer Event of Default Income Priority of Payments has the meaning given to it in the section "Cashflows - Pre-Issuer Event of
Default Income Priority of Payments" of this Prospectus.
Pre-Issuer Event of Default Principal Priority of Payments has the meaning given to it in the section "Cashflows - Pre-Issuer Event of
Default Principal Priority of Payments" of this Prospectus.
Pre-Issuer Event of Default Priorities of Payments means the Pre-Issuer Event of Default Principal Priority of Payments and the
Pre‑Issuer Event of Default Income Priority of Payments and each, a
Pre-Issuer Event of Default Priority of Payments.
Preceding Business Day Convention has the meaning given to it in Condition 4(b)(i)(F).
Pricing Supplement means the Pricing Supplement prepared in relation to each Series or Tranche of
Exempt Covered Bonds issued under the Programme (substantially in the form set
out in this Prospectus) and giving details of that Series or Tranche.
Principal Agency Agreement means the agency agreement dated on or about the Programme Date and made
between the Issuer, the Covered Bond Guarantor, the Trust Manager, the Bond
Trustee, the Principal Paying Agent, the Transfer Agent and the Registrar., as
amended, restated, supplemented, replaced or novated from time to time.
Principal Amount Outstanding has the meaning given to it in Condition 4(a).
Principal Ledger means the ledger of the GIC Account with such name maintained by the Trust
Manager pursuant to the Management Agreement to record the credits of certain
items described in the definition of Available Principal Amount and the debits
in accordance with the terms of the Establishment Deed.
Principal Paying Agent means The Bank of New York Mellon, London Branch, or any other person from
time to time appointed to perform the role of principal paying agent under the
Principal Agency Agreement.
Priorities of Payments means the orders of priority for the allocation and distribution of amounts
standing to the credit of the Trust Accounts in different circumstances
including:
(a) the Pre-Issuer Event of Default Income Priority of Payments;
(b) the Pre-Issuer Event of Default Principal Priority of
Payments;
(c) the Post-Enforcement Priority of Payments; and
(d) the Guarantee Priority of Payments,
each a Priority of Payments.
Priority Agreements means any agreement between the Seller and a subsequent mortgagee of Land the
subject of a Mortgage or Collateral Security:
(a) under which the Seller and the subsequent mortgagee agree to
a ranking of their respective securities over the said Land which provides for
the Seller's security to be a first ranking security to an agreed amount and
the subsequent mortgagee's security to be a second ranking security; and
(b) whose sole subject matter is the agreement as to ranking
referred to in paragraph (a) above of this definition and matters ordinarily
incidental thereto.
Privacy Act means the Privacy Act 1988 (Cth).
Programme means the covered bond programme established by the Issuer pursuant to the
Programme Agreement.
Programme Agreement means the agreement dated on or about the Programme Date, entered into by the
Issuer, the Covered Bond Guarantor, the Trust Manager, the Seller, the
Arranger and the Dealers to agree a basis upon which the Dealer(s) may from
time to time agree to purchase Covered Bonds, as amended, restated,
supplemented, replaced or novated from time to time.
Programme Asset Percentage means 90.9%.
Programme Date means on or about 4 May 2017.
Programme Documents means the following documents:
(a) Mortgage Sale Agreement (and any documents entered into
(including but not limited to any document setting out particulars of any
Mortgage Loan Rights sold by the Seller to the Covered Bond Guarantor)
pursuant to the Mortgage Sale Agreement);
(b) Servicing Deed;
(c) Cover Pool Monitor Agreement;
(d) Intercompany Note Subscription Agreement;
(e) Demand Note Subscription Agreement;
(f) Establishment Deed;
(g) Management Agreement;
(h) Interest Rate Swap Agreement;
(i) each Covered Bond Swap Agreement;
(j) Account Bank Agreement;
(k) Security Deed (and any documents entered into pursuant to
the Security Deed, including each Deed of Accession);
(l) Bond Trust Deed;
(m) Programme Agreement;
(n) each Agency Agreement;
(o) each Subscription Agreement;
(p) Seller Power of Attorney;
(q) Definitions Schedule; and
(r) Deed of Amendment in relation to the Establishment Deed, the
Definitions Schedule and the Security Deed,
and each document, agreement or deed ancillary or supplemental to any of such
documents and each a Programme Document.
Programme Limit means AUD6,000,000,000, subject to increase as provided in the Programme
Agreement.
Programme Resolution has the meaning given to it in Condition 14.
Prospectus means this prospectus.
Prospectus Regulation means Regulation (EU) 2017/1129.
Purchaser means the Seller or any third party to whom the Covered Bond Guarantor offers
to sell Selected Mortgage Loan Rights.
Put Notice has the meaning given to it in Condition 6(d).
Qualified Institution means an ADI:
(a) which pays any relevant interest in the ordinary course of
its business;
(b) whose short-term deposit rating is at least P-1 by Moody's;
and
(c) whose:
(i) short term, unsecured, unsubordinated and unguaranteed
debt obligations are rated at least F1 by Fitch; or
(ii) long term unsecured, unsubordinated and unguaranteed debt
obligations are rated at least A by Fitch,
or, in the case of paragraphs (b) and (c) (inclusive) above of this
definition, such other lower rating as Fitch and/or Moody's may publish in
order to maintain the then current ratings of the Covered Bonds.
Rate of Interest has the meaning given to it in Condition 5(j).
Rating Agencies means Moody's and Fitch or their successors, to the extent they provide
ratings in respect of the Covered Bonds, and each a Rating Agency.
Rating Affirmation Notice means in relation to an event or circumstances, a notice in writing from the
Issuer to the Covered Bond Guarantor confirming that it has notified the
Rating Agencies of the event or circumstances and that:
(a) the Issuer is satisfied, for the purposes of the Programme
Documents, following discussions with the Rating Agencies, that the event or
circumstances, as applicable, will not result in a reduction, qualification or
withdrawal of the ratings then assigned by the Rating Agencies; or
(b) the relevant Rating Agency has indicated to the Issuer that,
notwithstanding that a Rating Agency confirmation may be stated in a Programme
Document to be required in respect of the relevant event or circumstance, it
does not consider such confirmation necessary. In such a case, the Issuer will
be entitled to assume that the then current rating of the Covered Bonds from
that Rating Agency will not be downgraded or withdrawn by such Rating Agency
as a result of such event or circumstance.
RBA means the Reserve Bank of Australia.
Receiver means any person or persons appointed (and any additional person or persons
appointed or substituted pursuant thereto) by the Security Trustee as a
receiver, manager, or receiver and manager of the property charged or secured
under the Security Deed.
Record Date has the meaning given to it in Condition 5(d).
Recoveries in relation to a Mortgage Loan means all amounts recovered in respect of the
principal of that Mortgage Loan that was part (or the whole) of a Defaulted
Amount.
Redeemed Covered Bonds has the meaning given to it in Condition 6(c).
Redenomination Date has the meaning given to it in Condition 5(j).
Refinance Date has the meaning given to it in the section "Overview of the Principal
Documents - Establishment Deed - Method of Sale of Selected Mortgage Loan
Rights" of this Prospectus.
Register means the register of holders of the Registered Covered Bonds maintained by
the Registrar.
Registered Covered Bonds means Covered Bonds (other than A$ Registered Covered Bonds) issued in
registered form (being Registered Global Covered Bonds and/or Registered
Definitive Covered Bonds, as the case may be).
Registered Definitive Covered Bond has the meaning given to it in the Conditions.
Registered Global Covered Bond has the meaning given to it in Condition 2(a).
Registrar means The Bank of New York Mellon SA/NV, Luxembourg Branch, or any other
person from time to time appointed to perform the role of registrar under the
Principal Agency Agreement.
Regulation S means Regulation S under the Securities Act.
Regulatory Event means that the value of assets in cover pools securing covered bonds issued by
the Issuer exceeds 8 per cent., or such other percentage as is prescribed by
the regulations made under the Australian Banking Act, of the value of the
Issuer's assets in Australia for the purposes of sections 28 and 31D(2) of the
Australian Banking Act or such other event as determined by the Issuer and
notified to the Covered Bond Guarantor and the Trust Manager.
Related Entity has the meaning given to it in the Corporations Act.
Relevant Acquired Covered Bonds means Covered Bonds which, having been purchased or otherwise acquired by the
Covered Bond Guarantor, are cancelled in accordance with Condition 6(g) or
Condition 6(h).
Relevant Covered Bonds means, together with any Relevant Acquired Covered Bonds, any Covered Bonds in
respect of which the Covered Bond Guarantor makes, or there is made on its
behalf, a payment under the Covered Bond Guarantee.
Relevant Date means the date on which such payment first becomes due, except that, if the
full amount of the moneys payable has not been duly received by the Bond
Trustee or the Agent on or prior to such due date, it means the date on which,
the full amount of such moneys having been so received, notice to that effect
is duly given to the Covered Bondholders in accordance with Condition 13.
Representations and Warranties means the representations and warranties made by the Seller in relation to the
Mortgage Loan Rights as set out in the section "Overview of the Principal
Documents - Mortgage Sale Agreement - Representations and Warranties" of this
Prospectus.
Required Current Principal Balance Amount has the meaning given to it in the section "Overview of the Principal
Documents - Establishment Deed - Method of Sale of Selected Mortgage Loan
Rights" of this Prospectus.
Required Redemption Amount means, in respect of a Series of Covered Bonds, the amount calculated in
accordance with the following formula:
where,
A = the Principal Amount Outstanding of the relevant Series of Covered Bonds;
B = the Negative Carry Factor; and
C = days to maturity of the relevant Series of Covered Bonds.
Reserve Fund means the reserve fund established by the Covered Bond Guarantor in the GIC
Account which will be credited with the proceeds of the Available Income
Amount and/or (after the service of a Notice to Pay on the Covered Bond
Guarantor but prior to the service of a Covered Bond Guarantee Acceleration
Notice on the Covered Bond Guarantor and the Issuer) the Available Principal
Amount, proceeds from the issue of Intercompany Notes and/or the proceeds from
the issue of, or Increase, the Demand Note up to an amount equal to the
Reserve Fund Required Amount in accordance with the applicable Priority of
Payments.
Reserve Fund Required Amount means:
(a) if, and for so long as, the Issuer's credit rating or
deposit rating, as applicable, is equal to or higher than the Moody's
Specified Rating and the Fitch Specified Ratings, nil or such other amount as
the Issuer will direct the Covered Bond Guarantor from time to time; or
(b) if, and for so long as:
(i) the Issuer's credit rating or deposit rating, as
applicable, is less than the Moody's Specified Rating but are higher than or
equal to the Fitch Specified Ratings, an amount equal to the Australian Dollar
Equivalent of: (i) in relation to each Series of Covered Bonds where a Covered
Bond Swap is in place, the aggregate amounts due to each relevant Covered Bond
Swap Provider in the immediately following three months; and/or (ii) in
relation to each Series of Covered Bonds where a Covered Bond Swap is not in
place, the aggregate amount of interest due in respect of each such Series of
Covered Bonds in the immediately following three months; and (iii) an amount
equal to one quarter of the anticipated aggregate annual amount payable in
respect of the items specified in paragraphs (a) to (d), and if applicable
(e), of the Pre-Issuer Event of Default Income Priority of Payments provided
that in determining the amount of the Reserve Fund Required Amount where any
amount in respect of the Covered Bonds or the Covered Bond Swaps is by
reference to a floating rate, the rate will be at the then current floating
rate as at the date on which the amount is calculated; or
(ii) the Issuer's credit rating or deposit rating, as
applicable, is less than the Fitch Specified Ratings but are equal to or
higher than the Moody's Specified Rating, an amount equal to the Australian
Dollar Equivalent of: (i) in relation to each Series of Covered Bonds where a
Covered Bond Swap is in place and is provided by a party other than the Issuer
(or a related party), the aggregate amounts due to each relevant Covered Bond
Swap Provider in the immediately following three months; and/or (ii) in
relation to each Series of Covered Bonds where a Covered Bond Swap is not in
place and/or is provided by the Issuer (or a related party) or is guaranteed
by a third party with an appropriate rating, the aggregate amount of interest
due in respect of each such Series of Covered Bonds in the immediately
following three months; and, the aggregate amount of interest due in respect
of each such Series of Covered Bonds in the immediately following three
months; and (b) an amount equal to the anticipated amount payable in respect
of the items specified in paragraphs (a) to (d) and if applicable (e), of the
Pre-Issuer Event of Default Income Priority of Payments in the immediately
following three months provided that in determining the amount of the Reserve
Fund Required Amount where any amount in respect of the Covered Bonds or the
Covered Bond Swaps is by reference to a floating rate, the rate will be at the
then current floating rate as at the date on which the amount is calculated;
or
(iii) the Issuer's credit ratings are less than both the Moody's
Specified Rating and the Fitch Specified Ratings, the higher of the amounts
determined in accordance with paragraphs (b)(i) and (b)(ii) above.
Reserve Ledger means the ledger of such name maintained by the Trust Manager pursuant to the
Management Agreement, to record the crediting of amounts to the Reserve Fund
and the debiting of such Reserve Fund in accordance with the terms of the
Establishment Deed.
Sale Notice means a notice from the Seller to the Covered Bond Guarantor (and copied to
the Bond Trustee) in or substantially in the form of schedule 4 to the
Mortgage Sale Agreement (or in such other form agreed between the Seller, the
Trust Manager and the Covered Bond Guarantor).
Sale Proceeds means the cash proceeds realised from the sale of Selected Mortgage Loan
Rights.
Scheduled Balance means in relation to a Mortgage Loan means the amount that would be owing on
that Mortgage Loan at the date of determination if the Borrower had made prior
to that date the minimum payments required on that Mortgage Loan.
Scheduled Interest means an amount equal to the amount in respect of interest which would have
been due and payable under the Covered Bonds on each Interest Payment Date as
specified in Condition 4 (but excluding any additional amounts relating to
premiums, default interest or interest upon interest (Excluded Scheduled
Interest Amounts) payable by the Issuer following service of an Issuer
Acceleration Notice but including such amounts (whenever the same arose)
following service of a Covered Bond Guarantee Acceleration Notice) as if the
Covered Bonds had not become due and repayable prior to their Final Maturity
Date or, if the Issuer has failed to pay the Final Redemption Amount on the
Final Maturity Date or following a Conversion, as if the maturity date of the
Covered Bonds had been the Extended Due for Payment Date (but taking into
account any principal repaid in respect of such Covered Bonds or any
Guaranteed Amounts paid in respect of such principal prior to the Extended Due
for Payment Date), less any additional amounts the Issuer would be obliged to
pay are as a result of any gross-up in respect of any withholding or deduction
made under the circumstances set out in Condition 7.
Scheduled Payment Date means in relation to payments under the Covered Bond Guarantee:
(a) each Interest Payment Date; or
(b) the Final Maturity Date as if the Covered Bonds had not
become due and repayable prior to their Final Maturity Date.
Scheduled Principal means an amount equal to the amount in respect of principal which would have
been due and repayable under the Covered Bonds on each Interest Payment Date
or the Final Maturity Date (as the case may be) as specified in Condition 6(a)
and Condition 6(e) (but excluding any additional amounts relating to
prepayments, early redemption, broken funding indemnities, penalties, premiums
or default interest (Excluded Scheduled Principal Amounts) payable by the
Issuer following service of an Issuer Acceleration Notice but including such
amounts (whenever the same arose) following service of a Covered Bond
Guarantee Acceleration Notice) as if the Covered Bonds had not become due and
repayable prior to their Final Maturity Date or, if the Issuer has failed to
pay the Final Redemption Amount on the Final Maturity Date or following a
Conversion, as if the maturity date of the Covered Bonds had been the Extended
Due for Payment Date.
Second Layer of Collateral Securities in relation to a Mortgage Loan means all Collateral Securities in respect of
that Mortgage Loan which do not constitute the First Layer of Collateral
Securities for that Mortgage Loan.
Secured Creditors means the Security Trustee (in its own capacity and on behalf of the other
Secured Creditors), the Covered Bond Guarantor (in its own capacity), the Bond
Trustee (in its own capacity and on behalf of the Covered Bondholders), the
Covered Bondholders, the Couponholders, the Issuer, the Seller, the Servicer,
the Intercompany Note Subscriber, each Intercompany Noteholder, the Demand
Note Subscriber, each Demand Noteholder, the Account Bank, the Swap Providers,
the Trust Manager, the Cover Pool Monitor, the Agents and any other person who
becomes a Secured Creditor pursuant to the Security Deed, and each a Secured
Creditor.
Second Determination Date has the meaning given to it in the Section "Overview of the Principal
Documents - Establishment Deed - Asset Coverage Test" of this Prospectus.
Secured Obligations means all amounts (whether actual or contingent, present or future) which at
any time for any reason or circumstance in connection with any Programme
Document that relates to, or applies to, the Trust or the Security Deed or any
transactions contemplated by any of them (insofar as such transactions relate
to, or apply to, the Trust), whatsoever whether at law, in equity, under
statute or otherwise:
(a) are payable, are owing but not currently payable, are
contingently owing, or remain unpaid by the Covered Bond Guarantor to the
Security Trustee on its own account or for the account of the Secured
Creditors or to any Secured Creditor or to any Receiver;
(b) have been advanced or paid by the Security Trustee on its
own account or for the account of the Secured Creditors or by any Secured
Creditor:
(i) at the express request of the Covered Bond Guarantor; and
(ii) on behalf of the Covered Bond Guarantor;
(c) which the Security Trustee on its own account or for the
account of the Secured Creditors or any Secured Creditor is liable to pay by
reason of any act or omission of the Covered Bond Guarantor or has paid or
advanced in the protection or maintenance of the Charged Property or the
Security and the charge created by the Security Deed following an act or
omission by the Covered Bond Guarantor; or
(d) are reasonably foreseeable as likely, after that time, to
fall within any of paragraphs (a), (b) or (c) above,
and references to Secured Obligations includes references to any of them but
excludes Liability Payments.
This definition applies:
(i) irrespective of the capacity in which the Covered Bond
Guarantor, the Security Trustee or any Secured Creditor became entitled or is
liable in respect of the amount concerned;
(ii) whether the Covered Bond Guarantor, the Security Trustee or
any Secured Creditor is liable as principal debtor or surety or otherwise;
(iii) whether the Covered Bond Guarantor is liable alone or
jointly, or jointly and severally with another person;
(iv) whether the Security Trustee or any Secured Creditor is the
original obligee or an assignee or a transferee of the Secured Obligations and
whether or not:
(A) the assignment or transfer took place before or after the
delivery of the Security Deed; or
(B) the Covered Bond Guarantor consented to or was aware of the
assignment or transfer; or
(C) the assigned or transferred obligation was secured; or
(v) whether the Security Trustee or any Secured Creditor is the
original Security Trustee or an original Secured Creditor or an assignee or a
transferee of the original Security Trustee or an original Secured Creditor,
and whether or not the Covered Bond Guarantor consented to or was aware of the
assignment or transfer.
Securities Act means the United States Securities Act of 1933, as amended.
Security means the Security Interests over the Charged Property granted pursuant to the
Security Deed.
Security Deed means the security deed dated on or about the Programme Date and made between,
among others, the Covered Bond Guarantor, the Trust Manager and the Security
Trustee, as amended, restated, supplemented, replaced or novated from time to
time.
Security Interest means any mortgage, security interest, charge, encumbrance, pledge, lien,
hypothecation, assignment by way of security or other security interest or
title retention arrangement and any agreement, trust or arrangement having
substantially the same economic or financial effect as any of the foregoing
(other than a lien arising in the ordinary course of business or by operation
of law). It also includes a security interest within the meaning of section 12
of the PPSA, other than an interest in personal property that would not be a
security interest but for section 12(3) of the PPSA.
Security Trust means the trust formed under the Security Deed.
Security Trustee means P.T. Limited ABN 67 004 454 666, in its capacity as security trustee
under the Establishment Deed and the Security Deed together with any
additional security trustee appointed from time to time in accordance with the
terms of the Security Deed.
Selected Mortgage Loan Rights Offer Notice means a notice substantially in the form of schedule 6 of the Mortgage Sale
Agreement from the Covered Bond Guarantor served on the Seller offering to
sell Selected Mortgage Loan Rights to the Seller.
Selected Mortgage Loan Rights means Mortgage Loan Rights to be sold by the Covered Bond Guarantor pursuant
to the terms of the Establishment Deed having in aggregate the Required
Current Principal Balance Amount.
Selection Date has the meaning given to it in Condition 6(c).
Seller means BOQ in its capacity as seller pursuant to the Mortgage Sale Agreement.
Seller Powers of Attorney has the meaning given to it in the section "Overview of the Principal
Documents - Mortgage Sale Agreement - Transfer of Title to the Mortgage Loan
Rights to the Covered Bond Guarantor" of this Prospectus.
Senior Demand Note Component has the meaning given to it in the section "Overview of the Principal
Documents - Demand Note Subscription Agreement" of this Prospectus.
Series means a Tranche of Covered Bonds together with any further Tranche or Tranches
of Covered Bonds which are:
(a) expressed to be consolidated and form a single series; and
(b) identical in all respects (including as to listing) except
for their respective Issue Dates, Interest Commencement Dates and/or Issue
Prices.
Series Reserved Matter has the meaning given to it in Condition 14.
Servicer means BOQ or any other person from time to time appointed to perform the role
of servicer under the Servicing Deed.
Servicer Default has the meaning given to it in the section "Overview of the Principal
Documents - Servicing Deed - Removal or resignation of the Servicer" of this
Prospectus.
Services means the services to be performed by the Servicer in accordance with the
Servicing Deed.
Servicing Deed means the Servicing Deed dated on or about the Programme Date, between the
Covered Bond Guarantor, the Trust Manager, the Servicer and the Security
Trustee, as amended, restated, supplemented, replaced or novated from time to
time.
Servicing Guidelines means the relevant written guidelines, policies and procedures established by
the Servicer for servicing mortgage loans recorded on the Mortgage Loan
System, including the Mortgages Loans, as amended or updated in writing from
time to time.
Servicing Standards at any time means the relevant standards and practices set out in the then
Servicing Guidelines and, to the extent that a servicing function is not
covered by the Servicing Guidelines, the standards of a prudent lender in the
business of making retail home loans.
Shared Security means any Security Interest, guarantee, indemnity or other form of assurance
that by its terms secures both (on the one hand) the payment or repayment of
any Mortgage Loan forming or to form part of the Assets of the Trust and (on
the other hand) any Other Loan forming or to form part of the BOQ Trust
Assets.
SIBOR has the meaning given to it in Condition 4(b)(ii)(A)(3).
Specified Currency means subject to any applicable legal or regulatory restrictions, Australian
Dollars, Euro, Sterling, U.S. dollars, Yen, Swiss Franc and such other
currency or currencies as may be agreed from time to time by the Issuer, the
relevant Dealer(s), the Principal Paying Agent and the Bond Trustee and
specified in the Applicable Final Terms (or, in the case of Exempt Covered
Bonds, the Applicable Pricing Supplement).
Specified Denomination means in respect of a Series of Covered Bonds, the denomination or
denominations of such Covered Bonds specified in the Applicable Final Terms
(or, in the case of Exempt Covered Bonds, the Applicable Pricing Supplement).
Standby Swap Provider means, in respect of a Fixed Rate Swap, the entity appointed as the standby
swap provider from time to time under that Fixed Rate Swap together with any
transferee, successor thereto or replacement Standby Swap Provider.
Standby Swap Provider Fee in relation to an Interest Rate Swap Agreement and a Standby Swap Provider,
has the meaning given in that Interest Rate Swap Agreement.
Stock Exchange means the London Stock Exchange or any other or further stock exchange(s) on
which any Covered Bonds may from time to time be listed or admitted to trading
and references to the relevant Stock Exchange will, in relation to any Covered
Bonds, be references to the Stock Exchange on which such Covered Bonds are,
from time to time, or are intended to be, listed or admitted to trading.
Subordinated Additional Spread means in relation to a Covered Bond Swap Provider, if applicable, that
additional spread payable to the Covered Bond Swap Provider by the Covered
Bond Guarantor for the period from, in respect of the relevant Series of
Covered Bonds, the earlier of (a) the Final Maturity Date; or (b) the date on
which a Conversion occurs, to the Extended Due for Payment Date which is
identified as "Subordinated Additional Spread" in the relevant Covered Bond
Swap.
Subsidiary has the meaning given in the Corporations Act.
Substitute Covered Bond Guarantor at any given time means the entity then appointed as Covered Bond Guarantor in
accordance with the Establishment Deed.
Substitute Servicer at any given time means the entity then appointed as Servicer in accordance
with the Servicing Deed.
Substitute Trust Manager at any given time means the entity then appointed as Trust Manager in
accordance with the Management Agreement.
Substituted Debtor has the meaning given to it in Condition 14.
Substitution Assets means:
(a) Australian Dollar bank accepted bills and certificates of
deposit held with a Qualified Institution, with a remaining period to maturity
of 100 days or less, provided that such Qualified Institution accepted bills
and certificates of deposit are not issued by BOQ and satisfy the requirements
for eligible assets that may collateralise covered bonds in accordance with
RBA repo eligibility requirements (if any);
(b) Australian Dollar at call deposits held with a Qualified
Institution and convertible into cash within two AU Business Days;
(c) Australian Dollar denominated bonds, notes, debentures or
other instruments issued or guaranteed by the Commonwealth of Australia or an
Australian state or territory, provided that such investments have a remaining
period to maturity of one year or less and which are rated at least Aaa by
Moody's and AA- or F1+ by Fitch or their equivalents by two other
internationally recognised rating agencies; and
(d) any other asset of a kind prescribed in section 31(1) of the
Australian Banking Act or by regulations for the purposes of section 31(1)(i)
of the Australian Banking Act in respect of which the Issuer has issued a
Rating Affirmation Notice,
and, for the avoidance of doubt, does not include any assets of a kind
prescribed by regulation for the purposes of section 31(3) of the Australian
Banking Act.
sub-unit has the meaning given to it in Condition 4(a).
Swap Agreements means the Interest Rate Swap Agreement and the Covered Bond Swap Agreements
and each, a Swap Agreement.
Swap Agreement Credit Support Document means a credit support document entered into between the Covered Bond
Guarantor and a Swap Provider in the form of the ISDA 1995 Credit Support
Annex (Bilateral Form - Transfer) published by ISDA.
Swap Collateral means at any time, an amount of cash or securities which is paid or
transferred by a Swap Provider to the Covered Bond Guarantor as collateral to
secure the performance by such Swap Provider of its obligations under the
relevant Swap Agreement together with any interest or income received in
respect of such asset and any equivalent of such cash or securities, as
applicable.
Swap Collateral Cash Account Mandate means the resolutions, instructions and signature authorities relating to the
Swap Collateral Cash Accounts, substantially in the form set out in schedule 2
to the Account Bank Agreement.
Swap Collateral Cash Account means the account in the name of the Covered Bond Guarantor held with the
Account Bank and maintained subject to the terms of the Account Bank
Agreement, the Swap Collateral Cash Account Mandate and the relevant Swap
Agreement Credit Support Document into which cash is deposited by an Interest
Rate Swap Provider as collateral to secure the performance by that Interest
Rate Swap Provider of its obligations under the relevant Interest Rate Swap
Agreement.
Swap Collateral Excluded Amounts means at any time, the amount of Swap Collateral which may not be applied
under the terms of the relevant Swap Agreement at that time in satisfaction of
the relevant Swap Provider's obligations to the Covered Bond Guarantor,
including Swap Collateral, which is to be returned or paid to the relevant
Swap Provider from time to time in accordance with the terms of the Swap
Agreements and ultimately upon termination of the relevant Swap Agreement.
Swap Master Agreement means an agreement between the Covered Bond Guarantor, the Trust Manager, a
Swap Provider and the Security Trustee governing Swaps entered into with such
Swap Provider in the form of a 2002 Master Agreement, as published by ISDA,
together with the schedule thereto and any relevant Swap Agreement Credit
Support Document.
Swap Provider Default means, in relation to a Swap Agreement, the occurrence of an Event of Default
or Termination Event (each as defined in such Swap Agreement) where the
relevant Swap Provider is the Defaulting Party or sole the Affected Party (as
defined in such Swap Agreement), as applicable, other than a Swap Provider
Downgrade Event.
Swap Provider Downgrade Event means, in relation to a Swap Agreement, the occurrence of an Additional
Termination Event (as defined in such Swap Agreement) following a failure by
the relevant Swap Provider to comply with the requirements of the ratings
downgrade provisions set out in such Swap Agreement.
Swap Providers means the Interest Rate Swap Providers, the Standby Swap Providers and the
Covered Bond Swap Providers, and each a Swap Provider.
Swaps means the Interest Rate Swap and the Covered Bond Swaps and each, a Swap.
T2 has the meaning given to it in Condition 4(b)(i).
Talons means, if indicated in the Applicable Final Terms (or, in the case of Exempt
Covered Bonds, the Applicable Pricing Supplement), talons for further Coupons
on interest-bearing Bearer Definitive Covered Bonds.
Taxes mean all present and future taxes, levies, imposts, duties, fees, deductions,
withholdings or charges of any nature whatsoever and wheresoever imposed,
including income tax, corporation tax, GST or other tax in respect of added
value, stamp duties, and any franchise, transfer, sales, gross receipts, use,
business, occupation, excise, personal property, real property or other tax
imposed by any national, local or supranational taxing or fiscal authority or
agency together with any penalties, fines or interest thereon and Tax or
Taxation is to be construed accordingly.
Tax Act means the means the Income Tax Assessment Act 1936 (Cth) or the Income Tax
Assessment Act 1997 (Cth) as applicable.
Tax Authority means any government, state, municipal, local, federal or other fiscal,
revenue, customs or excise authority, body or official anywhere in the world
and includes the Australian Taxation Office.
Tax Resident in Australia means resident in Australia for the purposes of the Tax Act.
Temporary Bearer Global Covered Bond means a temporary bearer global covered bond in the form or substantially in
the form set out in Part 1 of schedule 2 to the Bond Trust Deed together with
the copy of the Applicable Final Terms (or, in the case of Exempt Covered
Bonds, the Applicable Pricing Supplement) annexed thereto with such
modifications (if any) as may be agreed between the Issuer, the Principal
Paying Agent, the Bond Trustee and the relevant Dealer(s), comprising some or
all of the Covered Bonds of the same series, issued by the Issuer pursuant to
the Programme Agreement or any other agreement between the Issuer and the
relevant Dealer(s) relating to the Programme, the Agency Agreement and the
Bond Trust Deed.
Third Party Amounts means any of the following amounts which are identified by the Seller and
notified to the Trust Manager and Covered Bond Guarantor in respect of:
(a) payments by a Borrower of any fees (including Break Costs)
and other charges which are due to the Seller; and
(b) any amount received from a Borrower for the express purpose
of payment being made to a third party for the provision of a service
(including giving insurance cover) to any of that Borrower or the Seller or
the Covered Bond Guarantor,
which amounts, if received by the Covered Bond Guarantor, may be paid daily
from moneys on deposit in the GIC Account. It does not, for the avoidance of
doubt, include interest payable on the Mortgage Loans.
Total Demand Note Commitment means such amount agreed between the Demand Note Subscriber, the Trust Manager
and the Issuer (and notified to the Covered Bond Guarantor and the Security
Trustee), as amended from time to time in accordance with the Demand Note
Subscription Agreement.
Total Intercompany Note Commitment means such amount agreed between the Intercompany Note Subscriber, the Trust
Manager and the Issuer (and notified to the Covered Bond Guarantor and the
Security Trustee), as amended from time to time in accordance with the
Intercompany Note Subscription Agreement.
Tranche means Covered Bonds which are identical in all respects (including as to
listing).
Transaction Party means any person who is a party to a Programme Document and Transaction
Parties means some or all of them.
Transfer Agent means The Bank of New York Mellon, London Branch, or any other person from
time to time appointed to perform the role of transfer agent under the
Principal Agency Agreement.
Treaty has the meaning given to it in Condition 5(j).
Trust means the trust known as the "BOQ Covered Bond Trust" formed under the
Establishment Deed.
Trust Accounts means each of the GIC Account and the Swap Collateral Cash Account and each, a
Trust Account.
Trust Corporation means a corporation (as defined in the Law of Property Act 1925 (UK)) or a
corporation entitled to act as trustee pursuant to any other comparable
legislation applicable to a trustee in any other jurisdiction.
Trust Further Advance has the meaning given to it in the section "Overview of the Principal
Documents - Mortgage Sale Agreement - Further Advances" of this Prospectus.
Trust Manager means BQLM or any other person from time to time appointed to perform the role
of trust manager under the Management Agreement.
Trust Manager Default has the meaning given to it in the Section "Overview of Principal Documents
- Management Agreement" of this Prospectus.
Trust Management Services means the trust management services set out in the Programme Documents which
are expressed to be performed by the Trust Manager (including the services set
out in schedule 1 and schedule 2 of the Management Agreement).
Trust Payment Period means the period from (and including) a Distribution Date (or the first
Transfer Date in the case of the first Trust Payment Period) to (but
excluding) the next Distribution Date.
UK Benchmarks Regulation means the Regulation (EU) No 2016/1011 as it forms part of domestic law by
virtue of the EUWA.
UK Prospectus Regulation means the Regulation (EU) 2017/1129 as it forms part of domestic law by virtue
of the EUWA.
Unit means, in respect of the Trust, the Income Unit and each Capital Unit in that
Trust.
Unitholder means each person registered as the holder of a Unit in the Trust in the
Instrument Register.
US$ or U.S. dollars means the lawful currency for the time being of the United States of America.
Vesting Date means, in relation to the Trust, the earliest of:
(a) the day preceding the eightieth anniversary of the date upon
which the Trust was established;
(b) the date upon which the Trust terminates by operation of law
or in accordance with the Establishment Deed; and
(c) following the occurrence of a Covered Bond Guarantor Event
of Default, the date on which the Security Trustee has notified the Covered
Bond Guarantor in writing that it has enforced the Security and has
distributed all of the amounts which it is required to distribute under the
Security Deed.
Written Resolution means a written resolution of Covered Bondholders passed as such under the
terms of the Bond Trust Deed.
Yield Shortfall has the meaning given to it the section "Overview of the Principal Documents -
Servicing Deed - Yield Shortfall Test" of this Prospectus.
Yield Shortfall Test has the meaning given to it in the section "Overview of the Principal
Documents - Servicing Deed - Yield Shortfall Test" of this Prospectus.
ISSUER
Bank of Queensland Limited
Level 6
100 Skyring Terrace
Newstead QLD 4006
Australia
COVERED BOND GUARANTOR
Perpetual Corporate Trust Limited
Level 18
123 Pitt Street
Sydney NSW 2000
Australia
TRUST MANAGER
B.Q.L. Management Pty Ltd
Level 6
100 Skyring Terrace
Newstead QLD 4006
Australia
ARRANGER
National Australia Bank Limited
Level 6
2 Carrington Street
Sydney NSW 2000
Australia
DEALERS
Australia and New Zealand Banking Group Limited BNP Paribas Commerzbank Aktiengesellschaft
(ABN 11 005 357 522)
16, boulevard des Italiens Kaiserstraβe 16 (Kaiserplatz)
Level 5, ANZ Tower
75009 Paris 60311 Frankfurt am Main
242 Pitt Street
France Federal Republic of Germany
Sydney NSW 2000
Australia
ING Bank N.V. National Australia Bank Limited UBS AG London Branch
Foppingadreef 7 Level 6 5 Broadgate
2 Carrington Street
1102 BD Amsterdam
London EC2M 2QS
Sydney NSW 2000
The Netherlands
England
Australia
SECURITY TRUSTEE BOND TRUSTEE
P.T. Limited BNY Trust Company of Australia Limited
Level 18 Level 2
1 Bligh Street
123 Pitt Street
Sydney NSW 2000
Sydney NSW 2000 Australia
Australia
PRINCIPAL PAYING AGENT AND TRANSFER AGENT A$ REGISTRAR
The Bank of New York Mellon, London Branch Austraclear Services Limited
160 Queen Victoria Street 20 Bridge Street
London EC4V 4LA Sydney NSW 2000
United Kingdom Australia
REGISTRAR COVER POOL MONITOR
The Bank of New York Mellon SA/NV, Luxembourg Branch KPMG
2-4 Eugene Ruppert, Vertigo Building Riparian Plaza
71 Eagle Street
Polaris L-2453 Luxembourg
Brisbane QLD 4000
LEGAL ADVISERS
To the Issuer as to English Law To the Issuer as to Australian law
Allen & Overy LLP Allen & Overy
One Bishops Square Level 25, 85 Castlereagh Street
Sydney NSW 2000
London E1 6AD
Australia
United Kingdom
To the Covered Bond Guarantor and the Security Trustee as to Australian law To the Bond Trustee as to English law
Minter Ellison
Level 40, Governor Macquarie Tower Ashurst
1 Farrer Place Level 11, 5 Martin Place
Sydney NSW 2000 Sydney NSW 2000
Australia Australia
To the Arranger and Dealers as to Australian law
Ashurst
Level 11, 5 Martin Place
Sydney NSW 2000
Australia
AUDITORS
For the financial year ended 31 August 2021 For the financial year ended 31 August 2022 and the half-years ended 28
February 2022 and 28 February 2023
KPMG PricewaterhouseCoopers
Riparian Plaza
71 Eagle Street One International Towers Sydney
Brisbane QLD 4000
Australia Watermans Quay
Barangaroo
NSW 2000
Australia
1 (#_ftnref1) This version of the legend to be included on front of the
Final Terms if transaction involves one or more manufacturer(s) subject to
MiFID II or/and UK MiFIR, and if following the "ICMA 1" approach.
2 (#_ftnref2) Relevant Dealer(s) to consider whether it/they have received
the necessary product classification from the Issuer prior to the launch of
the offer, pursuant to Section 309B of the SFA. If there is a change as to
product classification for the relevant drawdown, from the upfront product
classification embedded in the programme documentation, then the legend is to
be completed and used (if no change as to product classification, then the
legend may be deleted in its entirety)
3 (#_ftnref3) Legend to be included on the front of the Pricing Supplement
if one or more of the Dealers in relation to the Covered Bonds is a MiFID and
/or UK MiFIR regulated entity.
4 (#_ftnref4) Relevant Dealer(s) to consider whether it/they have received
the necessary product classification from the Issuer prior to the launch of
the offer, pursuant to Section 309B of the SFA. If there is a change as to
product classification for the relevant drawdown, from the upfront product
classification embedded in the programme documentation, then the legend is to
be completed and used (if no change as to product classification, then the
legend may be deleted in its entirety).
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