Macquarie Tailored Equity Collar

Features

Macquarie's Tailored Equity Collars (TECs) provide investors with a flexible, tailored platform to gain exposure to ASX listed shares with protection⁺ at expiry. Investors can choose to borrow up to 100 per cent of the purchase price of an ASX listed share with 95 per cent protection⁺ on expiry^, with no risk of margin calls.

TECs may also provide a funding and risk management solution for investors with large single shareholdings or employee option positions.

Key benefits

• Access a wide range of ASX listed shares, with the comfort of protection⁺ at expiry
• Potentially borrow up to 100 per cent^ with no margin calls
• Receive any ordinary cash dividends and franking credits* throughout the investment
• Flexible investment time frames and the freedom to tailor structures
• Reduce the cost of protection⁺ by creating a "collar" structure where participation in upside growth is capped
• Interest Assistance Loans (IALs) are a cashflow management tool potentially available in conjunction with a Tailored Equity Collar^.

Risks

Some of the risks of investing through a Tailored Equity Collar Facility include:

• the value of the ASX listed shares may fall substantially, even over a short period of time. The more volatile the price of the shares is, the riskier your investment will be
• if you set a cap price for your option(s), you will need to pay to us any gains in the value of the shares above the cap price on the expiry of the option(s)
• you will have to pay all amounts owing in relation to your investment, even if the investment performs poorly
• in certain circumstances, which include events nominated by us and events beyond your control, your options and loans may be terminated or lapsed early. In some circumstances, you may be required to make further payments to us
• the more highly geared your investment is, the riskier the investment will be
• us exercising a discretion we have under the terms of the TEC in a way which adversely affects you (although we will exercise any discretions in a reasonable manner) and
• if we fail to perform our obligations, you may not receive any payment which you are entitled to receive from us.

You should carefully consider the risks that may affect the value of your investment before making any investment decision. You should refer to the PDS for more detailed information about the risks of investing through a Tailored Equity Collar Facility.

Terms and conditions

Please click here for the Terms and Conditions for Tailored Equity Collars

More information

Shares available	Wide range of ASX listed shares available (subject to Macquarie's approval)
Gearing level	Optional and flexible. Investors can potentially borrow up to 100% of the funds with 95% protection+^ or contribute all of their own capital
Protection level+	Investors have the flexibility to set preferred protection levels (up to a maximum of 100%)
Investment term	Flexible investment terms of six months to five years available
Minimum investment amount	$100,000 per share
Distributions	Receive any ordinary cash dividends and franking credits* from the shares over the life of the investment
Prepay interest	Potential to prepay interest up to 12 months in advance
IAL	Investors have the potential to access an IAL, to assist with interest payment obligations and minimise their up front cash outlay by funding the prepayment of interest prior to the end of each financial year^

Who might consider TECs?

• Investors wishing to gain ASX listed equity exposure, with the added comfort of protection⁺ at expiry
• Investors with a shorter-term view on the market, or reluctance to commence long-term gearing commitments
• Investors who may wish to contribute some of their own capital in order to lower their loan to value ratio (LVR), and in doing so, reduce the overall cost of protection⁺
• Executives with large shareholdings or option positions whom are looking for a funding and risk management solution.

How do they work?

This information is only a summary of some of the main features of a TEC. You should refer to the PDS for full details of how a TEC works.

TECs enable you to purchase ASX listed shares, protect the value of your investment at expiry, and access an optional linked loan facility.

A TEC enables you to set a protection⁺ level which applies to your shares at expiry (protection price⁺). To reduce the upfront cost of this protection⁺, you can also set an upside cap which limits your ability to benefit from positive movements in the value of the relevant ASX listed share (cap price) (as shown below).

TEC investment cycle

Upfront	During the investment	On expiry
Choose your preferred protection+ level (up to a maximum of 100%) Borrow up to 100%^ of the purchase price of the share Contribute the difference between the investment amount and the loan amount (if any) plus any interest and protection+ costs You have the option to reduce the upfront cost of protection+ by creating a "collar" structure where upside growth is capped Potential to prepay interest (for up to 12 months) with an Interest Assistance Loan.	Receive any ordinary dividends and franking credits* No risk of margin calls Pay any additional interest and protection+ costs, where the term of the option(s) and/or loan are greater than 12 months. In some circumstances: the terms of the option(s) may also be adjusted (eg where corporate actions occur) and the options and any loans may be terminated early in which case further payments may be required from your client to us.	When your TEC expires, you can choose to: Extend the investment for a further term#^ Retain the shares by paying any amounts owed to us (eg any loan and variable premium, that is, the amount by which the shares exceed the cap price) or Sell your shares and receive the sale proceeds (if any) less any amounts owed to us (eg any loan and variable premium). If there is any shortfall, you will need to pay the balance to us from your own funds.