Pricing, Conflicts and Voting Policy

Pricing Policy

Prices of Fractional Bonds will be established by the Arranger on behalf of the Issuer based on the pricing policy set out below. The pricing policy is subject to change at any time.

Introduction

Prices of the Fractional Bonds are different from the prices of its corresponding underlying investment (the “Underlying Investment”). Prices of Fractional Bonds will however be dependent on the price of the Underlying Investment.

Prices of Underlying Investments

  • Prices of the Underlying Investment will ordinarily and initially be sourced from Bloomberg as being at “offer” (the “UI Price”)

  • Where the Arranger deems that Bloomberg is not available, relevant or accurate for any particular Underlying Investment, the UI Price will be sourced from such other provider of pricing services for debt obligations as may be determined by the Arranger.

  • Where the Arranger determines that no electronic pricing source is available for the Underlying Investment or that any such UI Price is not relevant or accurate, the Arranger may source the price directly from third party broker/dealers.

  • Where the UI Price cannot be obtained from these sources, and/or where the Arranger determines that the provided is not an accurate representation of the fair value of the Underlying Investment, the Arranger may in good faith and in its sole and absolute discretion determine a UI Price that more accurately reflects the relevant Underlying Investment’s fair value. It should be noted that the UI Price is intended to reflect the market “offer” price of the relevant Underlying Investment and the Arranger may reflect the liquidity of or other factors relating to the Underlying Investment in any fair value adjustment of the UI Price (including, for example, a “bid – offer” spread that would market for the relevant Underlying Investment).

  • The UI Price may be sourced in this manner as set out above on such frequency as the Arranger determines.

Prices for Fractional Bonds

  • Once the UI Price has been established as set out above, the same price is listed on the Platform (ie the website) for an investment in the relevant Fractional Bonds (the “FB Subscription Price”).

  • All Fractional Bonds are listed on the “Market” page of the Platform (whether available to invest or not) with an FB Subscription Price.

  • The repurchase price of the Fractional Bonds, reflecting a purchase by the Issuer of the investor’s tendered Fractional Bonds, will be the FB Subscription Price, save that a “sales fee” equal to 0.25% of the principal amount of the Fractional Bonds being redeemed will be deducted from the investor’s redemption amount in respect of an early redemption (the“FB Early Redemption Price”) (see https://www.wisealpha.com/fees). Note that the “sales fee” may be increased and that the Issuer is not obliged to repurchase any Fractional Bonds and may offer to repurchase any such Fractional Bonds at any price. As set out above, the Issuer’s current policy is to repurchase the FB Early Redemption Price but that policy may change and, in particular, the sales fee may be increased to reflect prevailing market ”bid-offer” spreads where 0.25% is deemed by the Arranger in its sole and absolute discretion to be not reflective of such market.

  • The FB Subscription Price and FB Early Redemption Price will be made available on a daily basis and may be updated at any time (to reflect the price of the Underlying Investment and other factors impacting on the Fractional Bonds).

Worked Example

  • DP World Senior Secured Bonds is an Underlying Investment listed on the “Market” page of the Platform

  • It is available both for subscription and redemption

  • The price of this Underlying Investment, as sourced in accordance with the “Pricing of Underlying Investments” procedure described above, as at 7 May 2020, is 91.0

  • This means that a direct investor in this Underlying Investment could acquire the Underlying Investment at 91% of the bond’s face value

  • The FB Subscription Price of the Fractional Bond (that represents this Underlying Investment) is also 91.0 (being the same as the Underlying Investment) which means that:

  • The current FB Early Redemption Price available to an investor seeking to redeem any such Fractional Bond will be 90.75, meaning that, if the Issuer agrees to re-purchase the relevant Fractional Bond, the investor will receive £90.75 (being £91 less £0.25, being the“sales fee”)

Voting Policy

WiseAlpha has a potential conflict of interest with its Platform clients when it has discretion to exercise voting authority in respect to corporate bonds and other investments that may underlie the Fractional Bonds. The Issuer will rely on WiseAlpha Technologies ("WAT") to advise it in relation to any suchvotes.

WAT’s voting policy is to advise the Issuer to vote any such securities in what it perceives to be the best interests of the holders of the Fractional Bonds.