«Carrera Capital Finance Limited (incorporated with limited liability in Jersey) and Carrera Capital Finance LLC (organized with limited liability in ...»
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A. FOR A
DESCRIPTION OF THESE AND CERTAIN FURTHER RESTRICTIONS ON OFFERS AND
SALES OF THE NOTES AND DISTRIBUTION OF THIS BASE PROSPECTUS, SEE
"SUBSCRIPTION AND SALE". NEITHER CARRERA CAPITAL FINANCE LIMITED (THE
"ISSUER") NOR CARRERA CAPITAL FINANCE LLC (THE "CO-ISSUER") HAS
REGISTERED AND DOES NOT INTEND TO REGISTER AS AN INVESTMENT COMPANY
UNDER THE UNITED STATES INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE
"INVESTMENT COMPANY ACT"), IN RELIANCE ON THE EXCEPTION PROVIDED BYSECTION 3(c)(7) OF THE INVESTMENT COMPANY ACT.
To permit compliance with Rule 144A under the Securities Act in connection with the sale of the Notes, the Issuer and, if applicable, the Co-Issuer will furnish, upon request of a holder of a Note, to such holder or prospective purchaser designated by such holder, as the case may be, the information required to be delivered under Rule 144A(d)(4) under the Securities Act if at the time of the request the Issuer or, if applicable, the Co-Issuer is not a reporting company under Section 13 or Section 15(d) of the United States Securities Exchange Act of 1934, as amended (the "Exchange Act"), or not exempt from reporting pursuant to Rule 12g3-2(b) under the Exchange Act. All information made available by the Issuer pursuant to the terms of this paragraph may also be obtained during usual business hours free of charge at the specified office of the Principal Paying Agent. Notwithstanding the foregoing, the Issuers agree to furnish the information required to be delivered under Rule 144A(d)(4) under the Securities Act for so long as the Issuers rely on Section 3(c)(7) of the Investment Company Act.
TERMS AND CONDITIONS OF THE NOTES
USE OF PROCEEDS
FORM OF FINAL TERMS
SUMMARY OF PROVISIONS RELATING TO THE NOTES WHILE IN GLOBAL FORM......... 80 DESCRIPTION OF THE ISSUER AND THE CO-ISSUER
THE ISSUER'S BUSINESS
DESCRIPTION OF THE MANAGER
DESCRIPTION OF THE MANAGEMENT AGREEMENT
THE ADMINISTRATION AGREEMENT
THE SECURITY AND ITS ENFORCEMENT
SUBSCRIPTION AND SALE
CERTAIN ERISA AND OTHER CONSIDERATIONS
The following general description is a summary only and is taken from, and is qualified in its entirety by the remainder of this Base Prospectus and, in relation to the terms and conditions of any particular Note, the relevant Final Terms. It should be read as an introduction to this Base Prospectus and any decision to invest in any Notes should be based on consideration of this Base Prospectus as a whole by any investor. No civil liability will attach to the Issuer or the Co-Issuer in any Member State of the European Economic Area in respect of this general description, including any translation hereof, unless it is misleading, inaccurate or inconsistent when read together with the other parts of this Base Prospectus. Where a claim relating to the information contained in this Base Prospectus is brought before a court in a Member State of the European Economic Area, the claimant may, under the national legislation of such Member State where the claim is brought, be required to bear the costs of translating this Base Prospectus before the legal proceedings are initiated. Words and expressions defined in "Certain Definitions", "Terms and Conditions of the Notes" and "Description of the Issuer and Co-Issuer" shall have the same meanings in this general description and in the remainder of this Base Prospectus.
The Notes have not been, and are not expected to be, registered
under the Securities Act, the securities laws of any state of the United States or the securities laws of any other jurisdiction. Neither the Issuer nor the Co-Issuer has registered nor does either the Issuer or the Co-Issuer intend to register as an investment company under the Investment Company Act, in reliance on the exception from registration provided by Section 3(c)(7) thereunder.
The Notes may be offered (i) outside the United States to non-U.S.
Persons in reliance on Regulation S, and (ii) within the United States or to or for the account or benefit of U.S. Persons in reliance on Rule 144A. The Notes may not be offered, sold or delivered within the United States or to or for the account or benefit of any person that is a U.S. Person unless, among other things, such person is both (1) a QIB and (2) a QP, acting for its own account or the account of another QIB that is a QP, and meets the other requirements set forth herein.
Interests in the Notes may not be reoffered, resold, pledged or otherwise transferred unless restricted pursuant to, or in transactions exempt from or not subject to the registration requirements of, the Securities Act and any other applicable securities laws. By its purchase of Notes (or beneficial interest therein), such purchaser will be deemed to agree or, in the case of registered definitive notes, will be required to certify that it will only resell or otherwise transfer such Notes (or beneficial interest therein) in accordance with the applicable restrictions set forth therein. Any resale or other transfer of a Note (or beneficial interest therein) which is not made in compliance with the transfer restrictions set forth therein shall be null and void and not honoured by the Issuers.
Sales or transfers that would cause the Issuer or Co-Issuer to be required to register as an investment company under the Investment Company Act will be void, and will not be honoured by the Issuers.
If, at any time, the holding or transfer of a Note (or beneficial interest therein) by or to or for the benefit of a U.S. person would cause the Issuer or Co-Issuer to be required to register as an investment company under the Investment Company Act, the Issuers may require any holder who holds any Note (or beneficial interest therein) in violation of the applicable transfer restrictions set forth herein to sell such Note (or beneficial interest herein) in accordance with the provisions set forth therein.
For a description of certain restrictions on offers, sales and deliveries of Notes and on the distribution of offering material in the United States of America, the United Kingdom, Ireland, Jersey and the European Economic Area see "Subscription and Sale".
The Issuers believe that the following factors may affect their ability to fulfil their respective obligations in respect of Notes issued under the Programme. These factors are contingencies which may or may not occur and neither of the Issuers is in a position to express a view on the likelihood of any such contingency occurring. Factors (although not exhaustive) that could be material for the purpose of assessing the market risks associated with Notes issued under the Programme are described below.
Each Issuer believes that the factors described below represent the principal risks inherent in investing in Notes issued under the Programme, but the inability of such Issuer to pay interest, principal or other amounts on or in connection with any Notes may occur for other reasons and neither Issuer represents that the statements below regarding the risks of holding any Notes are exhaustive. The risks described below are not the only risks the Issuers face. Additional risks and uncertainties not presently known to the Issuers or that are currently believed to be immaterial could also have a material impact on the Issuers' operations and prospects. Prospective investors should also read the detailed information set out elsewhere in this Base Prospectus and reach their own views prior to making any investment decision.
Words and expressions defined in the "Terms and Conditions of the Notes" below or elsewhere in this Base Prospectus have the same meanings in this section, unless otherwise stated.
Noteholders will be exposed to the general risks of the Issuer's business as well as the risks of any Specified Portfolio to which the relevant Notes may have been Allocated in the relevant Final Terms.
The principal business risks are described below in "The Issuer's Business". These include credit risk, market risk, liquidity risk and operational risk. In addition, returns to Noteholders will be sensitive to any rating changes to the Notes and/or to the Commercial Paper. Any such rating changes could result from any one or all of the following risks materialising and could have a material adverse effect on the ability of the Issuer or the Issuers, as applicable, to pay interest, principal or any other sums otherwise payable in respect of the Notes.
In addition, each Class of Notes is limited in recourse solely to the amounts payable under or in respect of one or more Specified Portfolios to which the relevant Class of Notes have been Allocated.
Noteholders of any such Class must rely solely on amounts payable under or in respect of one or more Specified Portfolios to which such Class has been Allocated as a source for the payment of principal and interest on the Notes of such Class. Moreover, without prejudice to the foregoing, losses in one or more Specified Portfolios may in certain circumstances affect Noteholders of every Class. See "The Issuer's Business – Restricted Funding Procedures" and "The Security and its Enforcement – Limited Recourse".
Potential investors should also pay particular attention to the events that may lead to, and the consequences of, an Enforcement Event, a Restricted Funding Event or a Restricted Investment Event. These events and the operating restrictions and/or other requirements they trigger, may mitigate for Noteholders certain risks relating to the Issuers. However, these events and restrictions/requirements are primarily intended to protect the Senior Creditors and therefore the occurrence of an Enforcement Event, a Restricted Funding Event or a Restricted Investment Event may actually result in additional losses to holders of Capital Notes. See "The Security and its Enforcement".
Noteholders will be exposed to credit risk relating both to Investments purchased by the Issuer and to Derivatives entered into with Derivative Counterparties. The Issuer intends to manage its credit risk relating to Investments and Derivative Counterparties by complying with the Portfolio Limits and Eligibility Criteria described herein. See "The Issuer's Business".
To the extent credit defaults occur, the value of the Portfolio will be reduced, which may reduce amounts available to pay Noteholders in respect of interest on and principal of the Notes. In addition, credit defaults and credit rating downgrades of Investments and of Derivative Counterparties may adversely affect the ability of the Issuer to comply with its operating limits described herein and, in certain circumstances, its requirements in respect of Committed Liquidity. Finally, a credit default with respect to an Investment, or with respect to a Derivative, could introduce market risk and, if not eliminated within five Business Days, could result in a breach of a portfolio limit. Accordingly such defaults could trigger an Enforcement Event, a Restricted Funding Event or a Restricted Investment Event, which could result in a loss to Noteholders.
Since the Issuer may acquire Investments and borrow in a variety of currencies and interest rate benchmarks, Noteholders could be exposed to risks in fluctuations in interest and currency exchange rates. To hedge these risks, the Issuer will enter into Associated Derivatives in accordance with procedures intended to reduce interest and currency exchange rate risk to de minimis levels. See "The Issuer's Business". Failure to follow these procedures could trigger an Enforcement Event or a Restricted Funding Event, which could result in a loss to the Noteholders.
Any increase or decrease in the market value of the Investments affects the value of the Portfolio and may, as a consequence, affect the amount payable to Noteholders in respect of interest and principal and other amounts, particularly in circumstances where an Enforcement Event, a Restricted Funding Event or a Restricted Investment Event has been triggered. In addition, decreases in the market value of Investments may result in sales by the Issuer of such Investments at a loss in order to reduce the Issuer's continuing credit exposures and may adversely affect the ability of the Issuer to comply with the portfolio limits, which could in certain circumstances result in an Enforcement Event, a Restricted Funding Event or a Restricted Investment Event, and could thus result in losses to the Noteholders.
Noteholders are exposed to liquidity risks arising out of the funding by the Issuer of longer term assets with short or medium term liabilities. These risks will be addressed by managing the maturity dates of the Issuer's assets and liabilities in such a way as to maintain the then current ratings of the Notes and the Commercial Paper and by arranging for Committed Liquidity and Liquidity Eligible Assets to cover particular periods of net cumulative outflow concentrations. If the Issuer were unable to access competitive financing for periods beyond those provided for by Committed Liquidity, a gradual (or, if an Enforcement Event was triggered, forced) wind-down of the Issuer could occur in order to meet the Issuer's maturing senior liabilities. In such a case, Investments may need to be sold and any losses on sales could result in losses to the Noteholders.
The ability of the Issuer to meet its business objectives and to manage its risks in such a way as to maintain the required ratings on the Notes is in part dependent upon the operational performance of the Manager. Failure to maintain the required ratings on the Notes could have adverse effects on the Notes, for example by triggering an Enforcement Event, a Restricted Funding Event or a Restricted Investment Event.