«Carrera Capital Finance Limited (incorporated with limited liability in Jersey) and Carrera Capital Finance LLC (organized with limited liability in ...»
The Issuers' obligation to pay principal of, interest on and other amounts in respect of any Capital Note or any Senior Subordinated Note is subordinated to their respective obligations to pay any amounts due and payable to the other Secured Creditors. In addition, the Issuers' obligation to pay principal of, interest on and other amounts in respect of any Tier of Notes is subordinated to their respective obligations to pay amounts due and payable on higher-ranking Tiers of Notes of the same Class.
Limited Recourse The Senior Subordinated Notes and the Capital Notes will be Allocated to one or more Specified Portfolios for the purposes of distributing all funds received from time to time in respect of such Specified Portfolio(s). Subject as provided in "Distribution Reallocation" below, the Senior Subordinated Notes and the Capital Notes are limited in recourse solely to, and holders of Senior Subordinated and Capital Notes must rely solely on, funds received in respect of the one or more Specified Portfolios to which such Class of Notes is Allocated. If funds received from time to time in respect of the Specified Portfolio(s) to which any such Note is Allocated (and reallocated, if applicable, as provided below) are insufficient to make payments on such Notes, no other assets will be available for payment of the deficiency and, following the realisation of such Specified Portfolio(s), the obligation of the Issuers to pay any such deficiency will be extinguished. However, all Senior Notes will rank pari passu amongst themselves and shall have recourse to all Assets of the Issuers regardless of any Allocation of any other Note to one or more Specified Portfolio(s).
Each of the Senior Subordinated Notes and Capital Notes is limited in recourse solely to the amounts payable under or in respect of one or more Specified Portfolios to which such Subordinated Notes have been Allocated. As a result, such Senior Subordinated and Capital Noteholders must rely solely on amounts payable under or in respect of one or more Specified Portfolios to which such Subordinated Notes have been Allocated as a source for the payment of principal and interest on such Securities. See "The Issuer's Business – Restricted Funding Procedures" and "The Security and its Enforcement – Limited Recourse".
The Senior Notes are payable pari passu out of all the assets of the Issuer including the entire Portfolio.
Distribution Reallocation As specified in the Security Trust Deed, in circumstances where losses in a Specified Portfolio are greater than the amount of Senior Subordinated Notes and/or Capital Notes Allocated to that Specified Portfolio, losses will be borne by holders of the Senior Subordinated Notes and/or Capital Notes Allocated to other Specified Portfolios.
Such losses will be Allocated in the inverse order of seniority of the Notes (that is, losses in a Specified Portfolio will be Allocated first to Capital Notes and other subordinated liabilities Allocated to such Specified Portfolio, then to Senior Subordinated Notes Allocated to such Specified Portfolio, then to Capital Notes and other subordinated obligations Allocated to other Specified Portfolios, then to Senior Subordinated Notes Allocated to such other Specified Portfolios, and finally to all Senior Notes and other liabilities senior to the Senior Subordinated Notes which have been Allocated to all Specified Portfolios pari passu with each other). See "The Issuer's Business – Restricted Funding Procedures" and "The Security and its Enforcement – Limited Recourse".
In circumstances where losses in a Specified Portfolio are greater than both the amount of Senior Subordinated Notes and Capital Notes Allocated to that Specified Portfolio, losses will be borne by all holders of Senior Subordinated Notes and/or Capital Notes on a pro rata basis. Such losses will not be Allocated to a particular Specified Portfolio (other than the Allocated Specified Portfolio). In circumstances where losses are greater than both the amount of all Senior Subordinated Notes and all Capital Notes, losses will be borne by all holders of Senior Notes and other liabilities senior to the Senior Subordinated Notes which have been Allocated to all Specified Portfolios on a pro rata basis.
Risk relating to the Notes Limited Secondary Market for Notes The Notes have not been registered under the Securities Act, or under any U.S. state securities or "blue sky" laws or the securities laws of any other jurisdiction and are being issued and sold in reliance upon exemptions from registration provided by such laws. There is no market for the Notes being offered pursuant to the Programme and, as a result, a purchaser must be prepared to hold the Notes for an indefinite period of time or until the maturity thereof. No Note may be sold or transferred unless such sale or transfer (i) is exempt from the registration requirements of the Securities Act (for example, in reliance on exemptions provided by Rule 144A or Regulation S under the Securities Act) and applicable U.S. state securities laws and (ii) does not cause either Issuer or the Portfolio or any Specified Portfolio to become subject to the registration requirements of the Investment Company Act. In addition, no Note may be sold or transferred to any employee benefit plan subject to ERISA, any plan subject to Section 4975 of the Code, any other plan subject to any federal, state, local or non-U.S. law that is substantially similar to Section 406 of ERISA or Section 4975 of the Code or to any person acting on behalf of or with "plan assets" of any of the foregoing, including an insurance company general account.
The Issuers will not provide registration rights to any purchaser of the Notes. The Notes will be owned by a relatively small number of investors and it is highly unlikely that an active secondary market for the Notes will develop. Purchasers of the Notes may find it difficult or uneconomic to realize their investment at any particular time.
Notes issued under the Programme will be new securities that may not be widely distributed and for which there is currently no active trading market (unless in the case of any particular Tranche, such Tranche is to be consolidated with and form a single series with a Tranche of Notes which is already issued). If the Notes are traded after their initial issuance, they may trade at a discount to their initial offering price, depending upon prevailing interest rates, the market for similar securities, general economic conditions and the financial condition of the Issuers. Although application has been made to the Financial Regulator for the Notes issued under the Programme within 12 months of the date of this Base Prospectus to be admitted to trading on the Irish Stock Exchange's regulated market and to be listed on the Irish Stock Exchange, there is no assurance that such applications will be accepted, that any particular Tranche of Notes will be so admitted or that an active trading market will develop.
Accordingly, there is no assurance as to the development or liquidity of any trading market for any particular Tranche of Notes.
Restrictions on Transfer
Neither the Issuer nor the Co-Issuer has registered as an investment company under the Investment Company Act in reliance on the exception provided under Section 3(c)(7) thereof for companies whose outstanding securities (other than securities sold outside the United States in reliance on Regulation S) are beneficially owned by "Qualified Purchasers" (as defined in Section 3(c)(7) of the Investment Company Act) and which do not make a public offering of their securities in the United States. While counsel will opine in connection with the initial sale of Notes that neither the Issuer nor the Co-Issuer is on such date required to register as an investment company (assuming the Notes are sold in accordance with the terms of the relevant Term Note Dealer Agreement), no opinion or no-action position has been requested of the United States Securities and Exchange Commission (the "SEC"). If the SEC or a court of competent jurisdiction were to find that either the Issuer or the Co-Issuer is required to register as an investment company, possible consequences include, but are not limited to, the SEC applying to enjoin the violation, investors suing the Issuer or the Co-Issuer, as applicable, to recover any damages caused by the violation and any contract to which the Issuer or the Co-Issuer, as applicable, is a party made in violation or whose performance involves a violation of the Investment Company Act being unenforceable unless enforcing such contract would produce a more equitable result. Should the Issuer or the Co-Issuer, as applicable, be subjected to any or all of the foregoing or to any other consequences, the Issuer or the Co-Issuer, as applicable, would be materially and adversely affected.
Each transferee of a Note (other than transferees of Notes sold outside the United States in reliance on Regulation S) will be deemed to make certain representations at the time of transfer relating to compliance with Section 3(c)(7) of the Investment Company Act. See "Subscription and Sale – United States – Initial Offers and Sales of Notes".
If, notwithstanding the restrictions on transfer contained therein, either Issuer determines any beneficial owner or holder of a Note (other than a Note transferred in reliance on Regulation S of the Securities Act) is not a Qualified Institutional Buyer and a Qualified Purchaser, the Issuers will require that such beneficial owner or holder sell all of its right, title and interest in such Note to a person who is so qualified, with such sale to be effected within 30 days after notice of such sale requirement is given. If such sale is not effected within such 30 days, the Issuers (or an investment banker selected by the Issuers) will be authorised to conduct a commercially reasonable sale of such Note to a person who does so qualify and, pending such sale, no further payments will be made in respect of such Note or any beneficial interest therein. See "Subscription and Sale – United States – Representations and Restrictions on Purchasers and Transferees".
The Notes may be redeemed prior to maturity
Notes may be redeemed if the circumstances and other conditions specified in the relevant Final Terms relating to such Notes, if any, are satisfied. Redemption may occur other than at the option of the Noteholder. The redemption price specified in the relevant Final Terms may not always result in the relevant Noteholder receiving all amounts owing to it in respect of the Notes being redeemed.
In addition, in the circumstances where a redemption has been triggered by a Noteholder in accordance with the relevant Final Terms, such Noteholder's Note may not be redeemed if an Enforcement Event, a Restricted Funding Event or a Restricted Investment Event has occurred and is continuing or would occur as a result of such redemption, unless all Notes are being redeemed in connection with an Enforcement Event.
The Notes are subordinated to the payment of certain fees and expenses as described herein. In addition, the Capital Notes are subordinated to the Senior Subordinated Notes and the Senior Notes.
Senior Subordinated Notes are subordinated to the Senior Notes. Payments of principal of, interest on and other amounts due in respect of the Notes are subject to the Priority of Payments described herein.
After the Enforcement Date has occurred, or if an Enforcement Event would occur as a result thereof, the holders of the Capital Notes are not entitled to be paid any amounts with respect thereto unless all amounts in respect of the Senior Subordinated Notes, Senior Notes and all other obligations of the Issuers more senior to such Capital Notes in the Priority of Payments have been paid in full. After the Enforcement Date has occurred, or if an Enforcement Event would occur as a result thereof, the holders of the Senior Subordinated Notes are not entitled to be paid any amounts with respect thereto unless all amounts in respect of the Senior Notes and all other obligations of the Issuers more senior to such Senior Subordinated Notes in the Priority of Payments have been paid in full. In addition, in the event of enforcement, remedies pursued by the Enforcement Manager or the Security Trustee could be adverse to the interests of the holders of subordinated Classes of Notes.
The Capital Notes and the Senior Subordinated Notes represent a leveraged investment in the relevant Specified Portfolio or Specified Portfolios to which such Capital Notes and Senior Subordinated Notes are Allocated. Utilisation of leverage is a speculative investment technique and involves certain risks to investors. The use of leverage generally magnifies holders' opportunities for gain and risk of loss.
Dilution of Notes Subject to the satisfaction of the condition that each additional issuance of Notes will not result in any reduction or withdrawal of the rating then in effect of any Note then outstanding, the Issuer and/or the Co-Issuer may, without the consent of any holders of Notes, issue additional Series of Notes from time to time. Such additional Notes may have maturity dates, interest rates and other terms that are different from, and potentially adverse to the holders of, the other Notes then outstanding. If any holder of Notes does not purchase a proportionate amount of additional Notes so issued, after the issuance of such additional Notes such holder's relative voting power and proportionate share of distributions made by the Issuers to holders of the Notes of such Class will decrease, and may decrease disproportionately relative to the voting power and shares of distributions of other holders of Notes. See Condition 20 (Further Issues).
Limitation on Certain Payments