28090556_19 Westlink M7 Information Memorandum FINAL

Information Memorandum
A$1,500,000,000
Medium Term Note Programme
Issuer
WSO Finance Pty Limited
(ABN 60 102 757 871)
Arrangers and Dealers
National Australia Bank Limited
(ABN 12 004 044 937)
Westpac Banking Corporation
(ABN 33 007 457 141)
The date of this Information Memorandum is 6 June 2016
28090556_19
Contents
Important Notice
1
Summary of the Programme
8
Corporate Profile
15
Project Deed
34
Interrelationship between NorthConnex and Westlink
50
Security Arrangements
55
Note Conditions
81
Form of Pricing Supplement
121
Selling Restrictions
126
Taxation
133
Directory
138
Important Notice
Introduction
This Information Memorandum relates to the medium term note programme (“Programme”)
established by WSO Finance Pty Limited (ABN 60 102 757 871) (“Issuer”). Medium term notes
(“Notes”) that may be issued from time to time under the Programme up to the then applicable
Programme Limit (as defined in the section entitled “Summary of the Programme” below) will have
the benefit of the Security (as described in the section entitled “Security Arrangements” below).
Responsibility
This Information Memorandum has been prepared by, and issued with the authority of, the Issuer.
The Issuer accepts responsibility for the information contained in this Information Memorandum
other than information provided by the Note Trustee, the Security Trustee, the Arrangers, the Dealers
and the Agents (each as defined in the section entitled “Summary of the Programme” below) in
relation to their respective address details in the section entitled “Directory” below.
Place of issuance
Subject to applicable laws, regulations and directives, the Issuer may issue Notes under the
Programme in any country, including Australia and countries in Europe and Asia, but not in the
United States of America unless such Notes are registered under the Securities Act of 1933 of the
United States of America (as amended) (“US Securities Act”) or an exemption from the registration
requirements under the US Securities Act is available.
Notes may be lodged in the Austraclear System (as defined in the section entitled “Summary of the
Programme” below) and, if so, will be issued in Australia in accordance with the relevant regulations
of the Austraclear System. Notes may also be lodged in such other clearing system, as may be
specified in the relevant Pricing Supplement (as defined below) for such Notes. The Issuer may also
issue notes, bonds or other debt obligations (including dematerialised securities) otherwise than
under the Programme.
Terms and conditions of issue
Notes will be issued in series (each a “Series”). Each Series may comprise one or more tranches
(each a “Tranche”) having one or more issue dates and on terms and conditions that are otherwise
identical to each other Tranche comprising that Series (other than, to the extent relevant, in respect
of the issue price, the amount and date of the first payment of interest).
Each issue of Notes will be made pursuant to such documentation as the Issuer may determine. A
pricing supplement and/or another supplement to this Information Memorandum (each a “Pricing
Supplement”) will be issued for each Tranche of Notes. A Pricing Supplement will contain details of
the initial aggregate principal amount, issue price, issue date, maturity date, details of interest (if any)
payable together with any other terms and conditions not set out in this Information Memorandum
that may be applicable to that Tranche or Series of Notes. The terms and conditions (“Conditions”)
applicable to the Notes are included in this Information Memorandum and may be supplemented,
amended, modified or replaced by the Pricing Supplement applicable to those Notes.
The Issuer may also publish a supplement to this Information Memorandum (or additional
Information Memoranda) which describes the issue of Notes (or particular classes of Notes) not
otherwise described in this Information Memorandum. A Pricing Supplement or a supplement to this
Information Memorandum may also supplement, amend, modify or replace any statement or
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information set out in a Pricing Supplement or incorporated by reference in this Information
Memorandum or a supplement to this Information Memorandum.
Documents incorporated by reference
This Information Memorandum is to be read in conjunction with all documents which are deemed to
be incorporated into it by reference as set out below. This Information Memorandum shall, unless
otherwise expressly stated, be read and construed on the basis that such documents are so
incorporated and form part of this Information Memorandum. References to “Information
Memorandum” are to this Information Memorandum and any other document incorporated by
reference and to any of them individually.
The following documents (including any that are published or issued from time to time after the date
of this Information Memorandum) are incorporated in, and taken to form part of, this Information
Memorandum:
•
all amendments and supplements to this Information Memorandum prepared by the Issuer
from time to time;
•
the audited accounts for the Issuer, WSO Co Pty Ltd (ACN 102 757 924), Westlink
Motorway Limited (ACN 096 512 300) and the Westlink Motorway Partnership (which have
been prepared as an aggregation for those entities as a combined group (notwithstanding
that none of those entities controls any of the others)) for the financial year ending 30 June
2015;
•
the half yearly management accounts of the Issuer, WSO Co Pty Ltd (ACN 102 757 924),
Westlink Motorway Limited (ACN 096 512 300) and the Westlink Motorway Partnership
(which have been prepared as an aggregation for those entities as a combined group
(notwithstanding that none of those entities controls any of the others)) for the half year
ended 31 December 2015;
•
each Pricing Supplement and all documents stated therein to be incorporated in this
Information Memorandum; and
•
all other documents issued by the Issuer and stated to be incorporated in this Information
Memorandum by reference.
Any statement contained in this Information Memorandum shall be modified or superseded in this
Information Memorandum to the extent that a statement contained in any document subsequently
incorporated by reference into this Information Memorandum modifies or supersedes such statement
(including whether expressly or by implication).
Except as provided above, no other information, including any information on the internet sites of any
Westlink Entity or any Related Body Corporate (as defined in the Conditions) or in any document
incorporated by reference in any of the documents described above, is incorporated by reference
into this Information Memorandum.
Copies of the Note Trust Deed, the Security Trust Deed, each Security, each Pricing Supplement
(each as defined in the Conditions) and documents incorporated by reference in this Information
Memorandum may be obtained during normal business hours from the offices of the Note Trustee or
such other person specified in a Pricing Supplement.
Investors should review, amongst other things, the documents which are deemed to be incorporated
by reference in this Information Memorandum when deciding whether or not to purchase, or
otherwise deal in any Notes or rights in respect of any Notes.
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No offer
This Information Memorandum does not, and is not intended to, constitute an offer or invitation by or
on behalf of the Issuer, any of its affiliates, the Note Trustee, the Security Trustee, the Arrangers, the
Dealers or any Agent to any person to subscribe for, purchase or otherwise deal in any Notes.
References to internet site addresses
Any internet site addresses provided in this Information Memorandum are for reference only and,
unless expressly stated otherwise, the content of any such internet site is not incorporated by
reference into, and does not form part of, this Information Memorandum.
No independent verification
The only role of the Note Trustee, the Security Trustee, the Arrangers, the Dealers and the Agents in
the preparation of this Information Memorandum has been to confirm to the Issuer that their address
in the section entitled “Directory” below is accurate as at the Preparation Date (as defined below).
Apart from the foregoing, none of the Note Trustee, the Security Trustee, the Arrangers, the Dealers
or the Agents has independently verified the information contained in this Information Memorandum.
Accordingly, no representation, warranty or undertaking, express or implied, is made, and no
responsibility is accepted, by any of them, as to the accuracy or completeness of this Information
Memorandum or any further information supplied by the Issuer in connection with the Programme or
any Notes.
The Note Trustee, the Security Trustee, the Arrangers, the Dealers and the Agents expressly do not
undertake to review the financial condition or affairs of the Issuer or any of its affiliates at any time or
to advise any holder of a Note (“Noteholder”) of any information coming to their attention with
respect to the Issuer, the Programme or the Notes and make no representations as to the ability of
the Issuer to comply with its obligations under the Notes.
Intending purchasers to make independent investment decision and obtain tax advice
This Information Memorandum contains only summary information concerning the Notes. Neither
the information contained in this Information Memorandum nor any other information supplied in
connection with the Programme or the issue of any Notes is intended to provide the basis of any
credit or other evaluation in respect of the Issuer or any Notes and should not be considered or relied
on as a recommendation or a statement of opinion (or a report of either of those things) by any of the
Issuer or any of its affiliates, the Note Trustee, the Security Trustee, the Arrangers, the Dealers or
the Agents that any recipient of this Information Memorandum or any other information supplied in
connection with the Programme or the issue of any Notes should subscribe for, purchase or
otherwise deal in Notes, or any rights in respect of any Notes.
Each investor contemplating subscribing for, purchasing or otherwise dealing in any Notes or any
rights in respect of any Notes, should:
•
make and rely upon (and shall be taken to have made and relied upon) its own independent
investigation of the financial condition and affairs of, and its own appraisal of the
creditworthiness of, the Issuer and its affiliates;
•
determine for itself the relevance of the information contained in this Information
Memorandum and any other information supplied in connection with the Programme or the
issue of any Notes, and must base its investment decision solely upon its independent
assessment and such investigations as it considers necessary; and
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•
consult their own tax advisers concerning the application of any tax laws applicable to their
particular situation.
No advice is given in respect of the legal or taxation treatment of investors or purchasers in
connection with an investment in any Notes or rights in respect of them and each investor is advised
to consult its own professional adviser.
Risks
Neither this Information Memorandum nor any other information supplied in connection with the
Programme or the issue of any Notes describes the risks of an investment in any Notes. Prospective
investors should consult their own professional, financial, legal and tax advisers about risks
associated with an investment in any Notes and the suitability of investing in the Notes in light of their
particular circumstances.
Foreign Account Tax Compliance Act
The Foreign Account Tax Compliance Act provisions of the U.S. Hiring Incentives to Restore
Employment Act of 2010 (“FATCA”) establish a new due diligence, reporting and withholding regime.
FATCA aims to detect U.S. taxpayers who use accounts with “foreign financial institutions” (“FFIs”)
to conceal income and assets from the U.S. Internal Revenue Service (“IRS”).
FATCA withholding
Under FATCA, a 30% withholding may be imposed (i) in respect of certain payments of U.S. source
income, (ii) from 1 January 2019 in respect of gross proceeds from the sale or disposition of property
that produce interest or dividends which are U.S. source income and (iii) from 1 January 2019, at the
earliest, in respect of “foreign passthru payments” (a term which is not yet defined under FATCA),
which are, in each case, paid to or in respect of entities that fail to meet certain certification or
reporting requirements (“FATCA withholding”).
A FATCA withholding may be required if (i) an investor does not provide information sufficient for the
Issuer or any other financial institution through which payments on the Notes are made to determine
whether the investor is subject to FATCA withholding or (ii) an FFI to or through which payments on
the Notes are made is a “non-participating FFI”.
FATCA withholding is not expected to apply if the Notes are treated as debt for U.S. federal income
tax purposes and the grandfathering provisions from withholding under FATCA are applicable. The
grandfathering provisions require, amongst other things, that the Notes are issued on or before the
date that is six months after the date on which final regulations defining the term “foreign passthru
payment” are filed with the U.S. Federal Register.
Australian IGA
Australia and the United States signed an intergovernmental agreement (“Australian IGA”) in
respect of FATCA on 28 April 2014. The Australian Government has enacted legislation amending
the Taxation Administration Act 1953 of Australia and the Income Tax Assessment Act 1997 of
Australia to give effect to the Australian IGA (“FATCA Amendments”).
Australian financial institutions which are Reporting Australian Financial Institutions under the
Australian IGA must comply with specific due diligence procedures to identify their account holders
(e.g. the Noteholders) and provide the Australian Taxation Office (“ATO”) with information on
financial accounts (for example, the Notes) held by U.S. persons and recalcitrant account holders
and on payments made to non-participating FFIs. The ATO is required to provide such information
to the IRS. Consequently, Noteholders may be requested to provide certain information and
4
certifications to the Issuer and to any other financial institutions through which payments on the
Notes are made in order for the Issuer and such other financial institutions to comply with their
FATCA obligations.
A Reporting Australian Financial Institution that complies with its obligations under the Australian IGA
will not generally be subject to FATCA withholding on amounts it receives, and will not generally be
required to deduct FATCA withholding from payments it makes with respect to the Notes, other than
in certain prescribed circumstances.
No additional amounts paid as a result of FATCA withholding
If an amount of, or in respect of, FATCA withholding were to be deducted or withheld from interest,
principal or other payments on the Notes, the Issuer would not, pursuant to the applicable terms and
conditions of the Notes, be required to pay additional amounts as a result of such deduction or
withholding.
FATCA is particularly complex legislation.
Investors should consult their own tax advisers on how FATCA and the Australian IGA may apply to
them under the Notes.
Common Reporting Standard
The OECD Common Reporting Standard for Automatic Exchange of Financial Account Information
(“CRS”) will require certain financial institutions to report information regarding certain accounts
(which may include the Notes) to their local tax authority and follow related due diligence procedures.
Noteholders may be requested to provide certain information and certifications to ensure compliance
with the CRS. A jurisdiction that has signed the CRS Competent Authority Agreement may provide
this information to other jurisdictions that have signed the CRS Competent Authority Agreement.
The Australian Government has enacted legislation amending, among other things, the Taxation
Administration Act 1953 of Australia to give effect to the CRS. The CRS will apply to Australian
financial institutions with effect from 1 July 2017.
Selling restrictions and no disclosure
Neither this Information Memorandum nor any other disclosure document in relation to the Notes has
been, or will be, lodged with the Australian Securities and Investments Commission (“ASIC”). A
person may not make or invite an offer of the Notes for issue or sale in Australia (including an offer
or invitation which is received by a person in Australia) or distribute or publish this Information
Memorandum or any other offering material or advertisement relating to the Notes in Australia unless
the minimum aggregate consideration payable by each offeree is at least A$500,000 (or its
equivalent in another currency, in each case disregarding moneys lent by the offeror or its
associates) or the offer or invitation otherwise does not require disclosure to investors in accordance
with Part 6D.2 or Chapter 7 of the Corporations Act 2001 of Australia (“Corporations Act”) and such
action complies with all applicable laws and regulations (see the section entitled “Selling Restrictions”
below).
This Information Memorandum is not a prospectus or other disclosure document for the purposes of
the Corporations Act.
The distribution and use of this Information Memorandum, including any Pricing Supplement,
advertisement or other offering material, and the offer or sale of Notes may be restricted by law in
certain jurisdictions and intending purchasers and other investors should inform themselves about,
and observe, any such restrictions. In particular, no action has been taken by any of the Issuer, the
Note Trustee, the Security Trustee, the Arrangers, the Dealers or the Agents which would permit a
5
public offering of any Notes or distribution of this Information Memorandum in any jurisdiction where
action for that purpose is required.
For a description of certain restrictions on offers, sales and deliveries of the Notes, and on
distribution of this Information Memorandum, any Pricing Supplement or other offering material
relating to the Notes, see the section entitled “Selling Restrictions” below.
None of the Issuer or any of its affiliates, the Note Trustee, the Security Trustee, the Arrangers, the
Dealers or the Agents represents that this Information Memorandum may be lawfully distributed, or
that any Notes may be lawfully offered in compliance with any applicable registration or other
requirements in any jurisdiction, or under an exemption available in such jurisdiction, or assume any
responsibility for facilitating any such distribution or offering. In particular, no action has been taken
by any of those parties which would permit a public offering of any Notes or distribution of this
Information Memorandum in any jurisdiction where action for that purpose is required.
A person may not (directly or indirectly) offer for subscription or purchase or issue an invitation to
subscribe for or buy Notes, nor distribute or publish this Information Memorandum or any other
offering material or advertisement relating to the Notes except if the offer or invitation, or distribution
or publication, complies with all applicable laws, regulations and directives.
No authorisation
No person has been authorised to give any information or make any representations not contained in
or consistent with this Information Memorandum in connection with the Issuer or any of its affiliates,
the Programme or the issue or sale of the Notes and, if given or made, such information or
representation must not be relied on as having been authorised by the Issuer or any of its affiliates,
the Note Trustee, the Security Trustee, the Arrangers, the Dealers or any of the Agents.
No registration in the United States
The Notes have not been, and will not be, registered under the US Securities Act or with any
securities regulatory authority of any state or other jurisdiction of the United States of America. The
Notes may not be offered, sold, delivered or transferred, at any time, within the United States of
America, its territories or possessions or to, or for the account or benefit of, U.S. persons (as defined
in Regulation S under the US Securities Act) except in a transaction exempt from, or not subject to,
the registration requirements of the US Securities Act.
Agency and distribution arrangements
The Issuer has agreed to pay fees for the Agents, the Note Trustee and the Security Trustee for
undertaking their respective roles and reimburse them for certain of their expenses incurred in
connection with the Programme and the offer and sale of Notes.
The Issuer may also pay a Dealer a fee in respect of the Notes subscribed by it, may agree to
reimburse the Arrangers and/or the Dealers for certain expenses incurred in connection with this
Programme and may indemnify the Dealers against certain liabilities in connection with the offer and
sale of Notes.
The Issuer, the Arrangers, the Dealers, the Agents, the Note Trustee and the Security Trustee and
their respective subsidiaries, directors, officers and employees may have pecuniary or other interests
in the Notes and may also have interests pursuant to other arrangements and may receive fees,
brokerage and commissions and may act as a principal in dealing in any Notes.
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References to credit ratings
There may be references to credit ratings in this Information Memorandum. A credit rating is not a
recommendation to buy, sell or hold securities, including securities such as the Notes, and may be
subject to revision, suspension or withdrawal at any time by the relevant assigning organisation.
Each credit rating should be evaluated independently of any other credit rating.
Credit ratings are for distribution only to a person (a) who is not a “retail client” within the meaning of
section 761G of the Corporations Act and is also a sophisticated investor, professional investor or
other investor in respect of whom disclosure is not required under Part 6D.2 or 7.9 of the
Corporations Act, and (b) who is otherwise permitted to receive credit ratings in accordance with
applicable law in any jurisdiction in which the person may be located. Anyone who is not such a
person is not entitled to receive this Information Memorandum and anyone who receives this
Information Memorandum must not distribute it to any person who is not entitled to receive it.
Currencies
In this Information Memorandum references to “A$” or “Australian Dollars” are to the lawful
currency of the Commonwealth of Australia.
Currency of information
The information contained in this Information Memorandum is prepared as of its Preparation Date.
Neither the delivery of this Information Memorandum nor any offer, issue or sale made in connection
with this Information Memorandum at any time implies that the information contained in it (or
incorporated by reference) is correct at any time subsequent to the Preparation Date or that any
other information supplied in connection with the Programme or issue of Notes is correct or that
there has not been any change (adverse or otherwise) in the financial conditions or affairs of the
Issuer as of any time subsequent to the Preparation Date. In particular, neither the Issuer nor any of
its affiliates is under any obligation to Noteholders to update this Information Memorandum at any
time after an issue of Notes.
In this Information Memorandum, “Preparation Date” means:
•
in relation to this Information Memorandum, the date indicated on its face or, if the
Information Memorandum has been amended or supplemented, the date indicated on the
face of that amendment or supplement;
•
in relation to any annual reports and financial statements incorporated in this Information
Memorandum, the date up to, or as at, the date on which such annual reports and financial
statements relate; and
•
in relation to any other item of information which is to be read in conjunction with this
Information Memorandum, the date indicated on its face as being its date of release or
effectiveness.
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Summary of the Programme
The following is a brief summary only and should be read in conjunction with the rest of this
Information Memorandum and, in relation to any Notes, the applicable Conditions and any relevant
Pricing Supplement. A term used below but not otherwise defined has the meaning given to it in the
Conditions. A reference to a “Pricing Supplement” does not limit the provisions or features of this
Programme which may be supplemented, amended, modified or replaced by a Pricing Supplement in
relation to a particular Tranche or Series of Notes.
Issuer:
WSO Finance Pty Limited (ABN 60 102 757 871).
Programme description:
A non-underwritten secured medium term note programme
(“Programme”) under which, subject to applicable laws, regulations and
directives, the Issuer may elect to issue medium term notes and other
debt securities (collectively referred to as “Notes”) in the Australian
domestic capital market in registered uncertificated form.
Subject to all applicable laws, regulations and directives, the Issuer may
issue Notes in any country including Australia and countries in Europe
and Asia but not in the United States of America unless such Notes are
registered under the Securities Act or an exemption from the registration
requirements is available.
Programme Limit:
A$1,500,000,000 (or its equivalent in other currencies).
The Programme Limit may be increased by the Issuer from time to time.
Programme Term:
The term of the Programme continues until terminated by the Issuer
giving 30 days’ notice to the Arrangers and any Dealers appointed to the
Programme generally or earlier by agreement between such parties.
Arrangers
and Dealers:
National Australia Bank Limited (ABN 12 004 044 937)
Westpac Banking Corporation (ABN 33 007 457 141)
Additional Dealers may be appointed by the Issuer from time to time for
any Tranche of Notes or to the Programme generally.
Note Trustee:
BNY Trust Company of Australia Limited (ABN 49 050 294 052) in its
capacity as trustee of the Westlink M7 Programme Trust or any person
who becomes the “Note Trustee” under the Note Trust Deed.
Security Trustee:
National Australia Bank Limited (ABN 12 004 044 937) or any person
who becomes the “Security Trustee” under the Security Trust Deed.
Registrar and Issuing
and Paying Agent:
BTA Institutional Services Australia Limited (ABN 48 002 916 396)
and/or any other person appointed by the Issuer to establish and
maintain a Register (as defined below) in or outside Australia on the
Issuer’s behalf from time to time and/or to perform registry and issuing
and paying agency functions (each a “Registrar” and together, the
“Registrars”).
8
Details of any other appointments of any person appointed by the Issuer
to act as a registrar, issuing and paying agent or other agent on the
Issuer’s behalf from time to time (and whether inside or outside
Australia) in respect of a Tranche or Series will be notified in the relevant
Pricing Supplement.
Calculation Agents:
If a calculation agent is required for the purpose of calculating any
amount or making any determination under a Note (each a “Calculation
Agent”), such appointment will be notified in the relevant Pricing
Supplement.
The Issuer 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 the
relevant Notes will be made by the Issuer.
Agents:
Each Registrar and Issuing and Paying Agent, Calculation Agent and
any other person appointed by the Issuer to perform other registry or
agency functions with respect to any Series or Tranche of Notes (details
of such appointment may be set out in the relevant Pricing Supplement).
Currencies:
Subject to all applicable laws, regulations and directives, Notes will be
denominated in Australian Dollars or such other freely tradeable
currency or currencies as may be specified in the relevant Pricing
Supplement.
Maturities:
Subject to all applicable laws, regulations and directives, Notes may
have any maturity as may be specified in the relevant Pricing
Supplement or as may be agreed between the Issuer and the relevant
Dealer.
Denomination:
Subject to all applicable laws, regulations and directives, Notes will be
issued in denominations of A$10,000 (or its equivalent in other
currencies) or, in each case, such other single denominations as may be
specified in the relevant Pricing Supplement or determined by the Issuer
in compliance with all applicable laws and directives.
Status and ranking:
The Notes will constitute direct, secured, unconditional and
unsubordinated obligations of the Issuer ranking equally among
themselves and in priority to all unsecured obligations of the Issuer,
except liabilities mandatorily preferred by law.
Security:
The Notes will have the benefit of the Security as more fully described in
the section entitled “Security Arrangements” below.
Negative pledge
and undertakings:
The Noteholders will have the benefit of a negative pledge and the
undertakings set out in the Conditions. Any additional undertakings that
apply in relation to a Series of Notes will be set out in the relevant Pricing
Supplement for that Series of Notes.
Cross acceleration:
The terms of the Notes will contain a cross acceleration provision as
further described in Condition 12.1(c) (“Cross acceleration”).
Issuance in Series:
Notes will be issued in Series. A Series may comprise one or more
Tranches having one or more Issue Dates and on terms and conditions
otherwise identical (other than, to the extent relevant, in respect of the
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issue price and the first payment of interest).
Interest:
Notes may or may not bear interest. Interest (if any) may be at a fixed,
floating or other variable rate and may vary during the lifetime of the
relevant Series.
Clearing Systems:
Notes may be transacted either within or outside any Clearing System
(as defined below).
The Issuer may apply to Austraclear Ltd (ABN 94 002 060 773)
(“Austraclear”) for approval for Notes to be traded on the settlement
system operated by Austraclear (“Austraclear System”).
Upon
approval by Austraclear, the Notes will be traded through Austraclear in
accordance with the rules and regulations of the Austraclear System.
Such approval by Austraclear is not a recommendation or endorsement
by Austraclear of such Notes.
Transactions relating to interests in the Notes may also be carried out
through the settlement system operated by Euroclear Bank S.A./N.V.
(“Euroclear”), the settlement system operated by Clearstream Banking,
société anonyme (“Clearstream, Luxembourg”) or any other clearing
system outside Australia specified in the relevant Pricing Supplement
(the Austraclear System, Euroclear, Clearstream, Luxembourg, and any
other clearing system specified in the relevant Pricing Supplement, each
a “Clearing System”).
Interests in the Notes traded in the Austraclear System may be held for
the benefit of Euroclear or Clearstream, Luxembourg.
In these
circumstances, entitlements in respect of holdings of interests in Notes
in Euroclear would be held in the Austraclear System by a nominee of
Euroclear (currently HSBC Custody Nominees (Australia) Limited) while
entitlements in respect of holdings of interests in Notes in Clearstream,
Luxembourg would be held in the Austraclear System by a nominee of
J.P. Morgan Chase Bank, N.A. as custodian for Clearstream,
Luxembourg.
The rights of a holder of interests in a Note 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 rules and regulations of the Austraclear System. In addition, any
transfer of interests in a Note, which is held through Euroclear or
Clearstream, Luxembourg will, to the extent such transfer will be
recorded on the Austraclear System, be subject to the Corporations Act
and the requirements for minimum consideration as set out in the
Conditions.
The Issuer will not be responsible for the operation of the clearing
arrangements which is a matter for the clearing institutions, their
nominees, their participants and the investors.
Form:
Notes will be issued in registered uncertificated form and will be debt
obligations of the Issuer which are constituted by, and owing under a
note trust deed to be entered into between the Issuer and the Note
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Trustee (“Note Trust Deed”) or, such other deed or deed poll made by
the Issuer as is specified in the relevant Pricing Supplement. Notes will
take the form of entries in a register (“Register”) maintained by a
Registrar.
Title:
Entry of the name of the person in the Register in respect of a Note in
registered form constitutes the obtaining or passing of title and is
conclusive evidence that the person so entered is the registered holder
of that Note subject to correction for fraud or proven error.
Title to Notes which are held in a Clearing System will be determined in
accordance with the rules and regulations of the relevant Clearing
System. Notes which are held in the Austraclear System will be
registered in the name of Austraclear.
No certificate or other evidence of title in respect of any Notes will be
issued unless the Issuer determines that certificates should be available
or it is required to do so pursuant to any applicable law, regulation or
directive.
Use of proceeds:
The net proceeds realised from the issue of Notes will be used for
payment of a distribution by the Westlink Entities, payment of
transaction costs,
for general corporate purposes and/or to prepay
existing indebtedness of the Issuer.
Transfer procedure:
Notes may only be transferred in whole and in accordance with the
Conditions.
Notes may only be transferred between persons if the transfer is in
compliance with the laws and directives of the jurisdiction in which the
transfer takes place.
In particular, Notes may only be transferred if:
(a)
(b)
in the case of Notes to be transferred in, or into, Australia:
(i)
the offer or invitation giving rise to the transfer is for an
aggregate consideration of at least A$500,000 (or its
equivalent in an alternative currency and, in either case,
disregarding moneys lent by the transferor or its
associates to the transferee) or does not otherwise
require disclosure to investors under Parts 6D.2 or 7.9
of the Corporations Act; and
(ii)
the transfer is not to a “retail client” for the purposes of
section 761G of the Corporations Act; and
at all times, the transfer complies with all applicable laws,
regulations and directives of the jurisdiction where the transfer
takes place.
Transfers of Notes held in a Clearing System will be made in
accordance with the rules and regulations of the relevant Clearing
System.
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Payments and Record
Date:
Payments to persons who hold Notes through a Clearing System will be
made in accordance with the rules and regulations of the relevant
Clearing System.
If Notes are not lodged in a Clearing System, payments of interest in
respect of those Notes will be made to the account of the registered
holder noted in the Register as at close of business in the place where
the Register is maintained on the relevant Record Date. If no account is
notified, then such payments will be made by cheque mailed on the
Business Day immediately preceding the relevant payment date to the
registered holder at its address appearing in the Register on the Record
Date or in such other manner as the Issuer considers appropriate.
The Record Date is close of business in the place where the Register is
maintained on the date which is seven clear days before a payment date
or such other date so specified in the relevant Pricing Supplement.
Stamp duty:
Any stamp duty incurred at the time of issue of the Notes will be for the
account of the Issuer. Any stamp duty incurred on a transfer or
redemption of Notes will be for the account of the relevant investors.
As at the date of this Information Memorandum, no ad valorem stamp
duty is payable in any Australian State or Territory on the transfer or
redemption of the Notes. The issue of the Notes may give rise to
mortgage duty consequences, although any such duty (if applicable) will
be for the account of the Issuer. Investors are advised to seek
independent advice regarding any stamp duty or other taxes imposed by
another jurisdiction upon the transfer of Notes, or interests in Notes, in
any jurisdiction.
Taxes:
A brief overview of the Australian taxation treatment of payments of
interest on Notes is set out below and in the section entitled “Taxation”
below.
Investors should obtain their own taxation and other applicable
advice regarding the taxation and other fiscal status of investing in
any Notes.
Withholding Tax:
Unless otherwise specified in any relevant Pricing Supplement for a
particular Tranche of Notes:
(a)
the Issuer intends to issue Notes in a manner which enables
interest or amounts in the nature of, or in substitution for,
interest (as specified in section 128A(1AB) of the Income Tax
Assessment Act 1936 of Australia (“1936 Tax Act”)) to be paid
to Noteholders free of Australian interest withholding tax
pursuant to the exemption available under section 128F of the
1936 Tax Act; and
(b)
all payments by the Issuer in respect of the Notes will be made
free and clear of and without withholding or deduction for, or on
account of Taxes, unless the Issuer is required to make a
withholding or deduction under law or for or on account of
FATCA. If the Issuer is required to make such withholding or
deduction, then, subject to certain customary exceptions as set
12
out in more detail in the Conditions, the Issuer will be required to
pay an additional amount to the relevant Noteholders in respect
of such withholding or deduction.
Selling restrictions:
The offer, sale and delivery of Notes and the distribution of this
Information Memorandum and other material in relation to any Notes are
subject to such restrictions as may apply in any country relevantly
connected with that offer and sale.
In particular, restrictions on the offer or sale of Notes in Australia, New
Zealand, the United Kingdom, the European Economic Area, the United
States of America, Hong Kong, Japan and Singapore are set out in the
section entitled “Selling Restrictions” below.
Restrictions on the sale and/or distribution of a particular Tranche or
Series of Notes may also be set out in the relevant Pricing Supplement.
Direct issues by Issuer:
The Issuer may issue Notes directly to purchasers or investors (as
applicable) procured by it.
Listing:
It is not currently intended that the Notes be listed on any stock
exchange.
An application may be made for the Issuer to be admitted to the official
list of, and/or Notes of a particular Series to be quoted on, the Australian
Securities Exchange operated by ASX Limited (ABN 98 008 624 691)
(“ASX”), or on any other stock or securities exchange (in accordance
with applicable law). Any Notes which are quoted on the ASX will not be
transferred through, or registered on, the Clearing House Electronic
Sub-Register System (“CHESS”) operated by ASX Settlement Pty
Limited (ABN 49 008 504 532) and will not be “Approved Financial
Products” for the purposes of that system. Interests in the Notes will
instead be held in, and transferable through, the Austraclear System.
The relevant Pricing Supplement in respect of the issue of any Tranche
of Notes will specify whether or not such Notes will be quoted on the
ASX (or any other stock or securities exchange).
Investors to obtain
independent advice with
respect to investment
risks:
This Information Memorandum does not describe the risks of an
investment in the Notes. Prospective investors or purchasers should
consult their own professional, financial, legal and tax advisers about
risks associated with an investment in a particular Tranche of Notes and
the suitability of investing in the Notes in light of their particular
circumstances.
Governing law:
Unless expressly specified otherwise, the Notes, and all related
documents, will be governed by the laws of the State of New South
Wales, Australia.
Credit rating:
Notes to be issued under the Programme may be rated by one or more
rating agencies. The credit rating of an individual Tranche or Series of
Notes will be specified in the relevant Pricing Supplement for those
Notes (or another supplement to this Information Memorandum).
A credit rating is not a recommendation to buy, sell or hold Notes
13
and may be subject to revision, suspension or withdrawal at any
time by the assigning rating agency.
Credit ratings are for distribution only to a person (a) who is not a “retail
client” within the meaning of section 761G of the Corporations Act and is
also a sophisticated investor, professional investor or other investor in
respect of whom disclosure is not required under Parts 6D.2 or 7.9 of the
Corporations Act, and (b) who is otherwise permitted to receive credit
ratings in accordance with applicable law in any jurisdiction in which the
person may be located. Anyone who is not such a person is not entitled
to receive this Information Memorandum and anyone who receives this
Information Memorandum must not distribute it to any person who is not
entitled to receive it.
14
Corporate Profile
15
1
Overview
The Westlink Motorway Group comprises WSO Co Pty Limited (“WSO Co”), Westlink
Motorway Partnership, WSO Finance Pty Limited (“Issuer”) and Westlink Motorway Limited.
Westlink Motorway Limited (as nominee of the Westlink Motorway Partnership) and WSO Co
(together, the “Westlink M7 Concessionaires”) are the concessionaires for the Westlink M7
Motorway (“Westlink M7”).
Westlink M7 is a 40 kilometre toll road that runs north-south through Sydney’s western
suburbs and forms a critical link in Sydney’s 110 kilometre orbital network. Westlink M7 links
major residential growth centres, distribution centres and areas of industrial development in
Sydney’s west and connects three key Sydney motorways, the M2, M4 and M5 motorways,
three of Sydney’s busiest motorways.
The concession for Westlink M7 is granted pursuant to a Project Deed between Roads and
Maritime Services (“RMS”), a NSW government agency and the Westlink M7
Concessionaires. Subject to the successful completion of the design and construction of the
NorthConnex Project (discussed in section 3 below), at 31 December 2015 the concession
had a remaining term of 32.5 years, expiring on 30 June 2048 (or 14 February 2037 if the
design and construction of the NorthConnex Project is not completed).
Traffic (Annual Average Daily Trips) has increased year on year for the 9 year period to 30
June 2015 to 164,829 Annual Average Daily Trips, representing a CAGR of 6.2%. Revenue
and EBITDA for the year ending 30 June 2015 reached $273.3 million and $233.9 million
respectively, representing 5 year CAGRs of 8.5% and 11.1% for the same period.
16
KEY ASSET INFORMATION
General
Location
Sydney, New South Wales
Width
Four lanes (two lanes each direction)
Length
40 kilometres
Completion
December 2005
Concession
Concession Expiry
30 June 2048 (or 14 February 2037 if the design and construction of
the NorthConnex Project is not successfully completed)
Counterparty
RMS
Traffic & Tolling
Annual Average
Daily Trips1 (FY15)
164,829
Current Tolls (1 April
2016 – 30 June
2016)
Class A: 38.88 cents / kilometre capped at $7.782
Indexation of toll
rates for Class A
vehicles
The Class A vehicle toll rate is varied only by the quarterly CPI
Class B (“Truck toll”)
Multiplier
Class B vehicle toll rate is currently a 2.33 multiple of the Class A
vehicle toll rate. The multiplier is increasing quarterly to a multiple of 3
times by 1 January 20174
Tolling Method
Distance based using a ‘cents per kilometre’ rate that is capped after
20 kilometres
Tolling Points
14
Tolling Payment
Electronic tolling
Class B: 90.59 cents / kilometre capped at $18.123
1
“Annual Average Daily Trips” is defined as the number of Trips (based on start time (i.e. the day upon which the first
Passage is recorded)) in a year divided by the number of days in the year. A “Trip” is comprised of two Passages. A
“Passage” is when a vehicle enters or leaves the motorway.
2
A vehicle that is 12.5 metres or less in length and 2.8 metres or less in height.
3
Any vehicle that exceeds the dimensions for a Class A vehicle.
4 The
3 times multiplier will apply from 1 January 2017 until the end of the concession term on 30 June 2048 subject to
successful completion of the design and construction of the NorthConnex Project. Class B tolls will return to parity with Class
A tolls if the design and construction of the NorthConnex Project is not successfully completed.
17
2
Structure
The Westlink Motorway Group is ultimately owned by:
(a)
the Transurban Group (as defined below) (“Transurban”, 50%);
(b)
Canada Pension Plan Investment Board (“CPPIB”, 25%); and
(c)
funds and clients managed by QIC Limited, being QSuper (12.5%) and QTC
(12.5%) respectively,
(collectively “Westlink Investors”).
On 31 October 2014, the Westlink Investors established the NorthWestern Roads Group
(the “NWRG”) and transferred the Westlink Motorway Group (and certain holding entities)
into the ownership of NWRG. NWRG was formed to create a single group to hold both
Westlink M7 and the NorthConnex Project (discussed in section 3 below). A simplified
ownership diagram is set out below.
For the purposes of this section, “Transurban Group” means: (a) Transurban Holdings
Limited (ABN 86 098 143 429), Transurban Holding Trust (ARSN 098 807 419) by its
responsible entity Transurban Infrastructure Management Limited (ACN 098 147 678) and
Transurban International Limited (ACN 121 746 825) (together the “Stapled Entities”); (b)
each company in which the Stapled Entities, whether individually or collectively, own (directly
or indirectly) 50% or more of the voting shares; and/or (c) each company which is for the
purposes of section 50AA of the Corporations Act 2001 under the “control” of the Stapled
Entities, whether individually or collectively.
18
NWRG Structure
Notes
•
This is a simplified structure diagram and does not show:
•
all of the interposed holding entities (“Westlink Holding Entities”) in the ownership
chain between NorthWestern Roads Group Trust and Westlink Motorway
Partnership and between NorthWestern Roads Group Pty Limited and WSO Co; or
•
holding entities interposed between the ultimate investors and the NWRG holding
entities.
•
Westlink entities shown in light green boxes and triangles in the diagram above are all
security providers under Westlink’s finance documents - various Westlink Holding Entities
are also security providers.
•
Companies involved in the NorthConnex Project (as defined below) (which are shown in light
blue boxes in the diagram above) are ring-fenced from the Westlink Motorway Group as a
result of the NWRG holding structure.
19
3
NorthConnex Project
NorthConnex Company Pty Ltd (“NCX Project Co”) reached financial close with the NSW
Government on 31 January 2015 for the design, construction, operation and ongoing
maintenance of NorthConnex (“NorthConnex Project”), a nine kilometre twin motorway
tunnel linking M1 Pacific Motorway at Wahroonga to the Hills M2 Motorway at West Pennant
Hills.
In connection with the NorthConnex Project transaction, the concession term under the M7
Project Deed was extended by 11.4 years to 30 June 2048 and Class B vehicle (“truck”) tolls
are in the process of being increased over 9 quarters to 1 January 2017 from one times to
three times the Class A vehicle (“car”) tolls. Subject to successful completion of the design
and construction of NorthConnex, the 3 times multiplier for truck tolls will apply until the
expiry of the concession in June 2048.
NCX Project Co will design, construct, operate and maintain NorthConnex and be entitled to
collect the toll revenue under the terms of the NorthConnex Project Deed.
Subject to the matters summarised in the section headed “Interrelationship between
NorthConnex and Westlink” below, the Westlink Motorway Group is effectively ring-fenced
from the NorthConnex Project through the corporate holding structure (see above), the use
of separate companies to undertake the NorthConnex Project and no cross default between
the M7 Project Deed and the NorthConnex Project Deed (i.e. termination of the NorthConnex
Project Deed will not lead to termination of the M7 Project Deed or vice versa). No member
of the Westlink Motorway Group is party to the NorthConnex D&C Deed.
Additional details of the relationship between Westlink M7 and the NorthConnex Project is
set out in the section headed “Interrelationship between NorthConnex and Westlink” below.
4
Directors
The Boards of the NWRG entities (including Westlink Motorway Group entities) comprise
representatives of Transurban (3 representatives), QIC (2 representatives), CPPIB (2
representatives) and an independent chairperson.
The Boards of the Westlink Motorway Group entities comprise:
•
Robin Aldis (Independent Chairperson - Director)
•
Scott Charlton (Transurban - Director)
•
Andrew Head (Transurban - Director)
•
Anthony Adams (Transurban - Director)
•
Andrew Hay (CPPIB - Director)
•
Andrew Sims (CPPIB - Director)
•
Leisel Moorhead (QIC - Director)
•
Brendan Bourke (QIC - Director)
Alternate Directors
•
Bruce Hogg (CPPIB – Alternate Director to Andrew Hay)
•
James Millar (CPPIB – Alternate Director to Andrew Sims)
20
•
Raymond Golzar (Transurban – Alternate to Scott Charlton, Andrew Head and
Anthony Adams)
•
Matina Papathanassiou (QIC - Alternate Director to Leisel Moorhead and Brendan
Bourke)
Company Secretary
•
Laura McFarlane
21
5
Operations and Management
Management of Westlink M7 is undertaken by NorthWestern Roads Management Services
Company Pty Ltd (“NWR”), a wholly owned subsidiary of NorthWestern Roads Group Pty
Limited, under a Management Services Agreement (“MSA”) with the Westlink M7
Concessionaires.
The scope of services provided by NWR under the MSA (collectively the “Core Services”)
encompasses all management and corporate administration services required by the
Westlink M7 Concessionaires in relation to the day to day running of Westlink M7.
WSO Co, as operator of Westlink M7, has engaged a number of service providers/key
subcontractors as described below, which are managed by NWR under the MSA.
Operating Model
Service provider contracts
Shareholders
CPPIB
QIC
Transurban
Corporate
Management of
management:
suppliers
North Western
Management of
Roads
Project Documents
Management
WSO Co Board
Services
Management of
Company Pty
stakeholders
Limited (a wholly
Service Providers
owned
Reporting to Board
subsidiary of
NorthWestern
Strategy
Roads Group
NorthWestern Roads Management
Services Company Pty
Pty Limited)
Asset lifecycle
management
Management and
Roam Tolling Pty Ltd
administration
Westlink (Services) Pty Ltd
Tolling and
Call centre operations
customer
Transurban Limited
management:
Credit and billing
functions
Kapsch
UGL
Roam Tolling
Pty Ltd (a wholly
Retail brand back
owned
office
subsidiary of
Transurban)
Enforcement
Tag logistics
Image processing
Technology:
Back-office tolling as
a service
Transurban
IT services in support
of WSO Co’s
corporate IT functions
22
Roadside
Roadside tolling
technology:
equipment
Kapsch/UGL
Electronic traffic
management system
Operations &
Roadside operations:
maintenance:
traffic control and
incident response
Westlink
(Services) Pty
Maintenance: road
Ltd (a wholly
and structures,
owned
mechanical and
subsidiary of
electronic road tolling
Lend Lease
systems, electronic
Services)
traffic management,
landscape
Tolling and Customer Management – Roam Tolling Pty Ltd
Tolling and customer management (“TCM”) functions are performed by Roam Tolling Pty Ltd
(“Roam”), a wholly owned subsidiary of the Transurban Group, under the terms of an
agreement with WSO Co (“TCM Agreement”). Roam e-tags are fully interoperable with all
Australian toll roads. Likewise, Westlink M7 accepts e-tags from all Australian toll road
operators. The TCM Agreement with Roam runs until December 2020 with yearly price
reviews.
Technology Implementation – Transurban Limited
WSO Co has entered into an agreement with Transurban Limited, a wholly owned subsidiary
of the Transurban Group, for the implementation and ongoing provision of its “GLIDe” tolling
bureau service. Transurban Limited provides ongoing IT services to operate, maintain and
refresh the GLIDe System following “go-live” (which occurred in June 2015). The agreement
has an initial term ending five years after “implementation completion” of the GLIDe System,
and is renewable for two further five-year periods on notice from WSO.
Operation and Maintenance – Westlink (Services) Pty Ltd
Westlink (Services) Pty Ltd provides operations and maintenance services for Westlink M7,
under the terms of an agreement with WSO Co (“O&M Agreement”). The O&M Agreement
runs until February 2037 with specified five yearly price resets, with optional annual price
resets.
23
6
Historical Traffic Information
Westlink M7 – Average Daily Trips (Quarterly)
Heavy commercial vehicles (HCV) have historically accounted for approximately 15% (14.8%
- 15.7%) of annual Passages on the M7. HCV as a percentage of Passages for the nine
months ended March 2016 was 15.2%.
During the period FY11 to FY13, traffic volumes were impacted by the upgrade project on the
adjacent Hills M2. After the completion of the Hills M2 upgrade, between FY13 and FY15,
traffic grew at a CAGR of 7.6%.
24
Commuter Traffic Drivers:
The last decade has seen a large number of industrial businesses relocate to Sydney’s outer
ring along the M7. The completion of the NorthConnex Project will provide a direct
connection from north to western and southern roads via the Westlink M7 and M2
motorways. Sydney’s designated residential growth areas (North West, South West) are
adjacent to each end of Westlink M7.
Freight Traffic Drivers:
60% of freight moved by road in the Sydney metropolitan region is either palletised freight or
building materials (as revealed in a 2014 survey).5 The ongoing development of North West
Growth Centre, South West Growth Centre and Western Sydney Employment Area will
require the delivery of building materials.6 The M7 corridor is well positioned adjacent to
these priority growth areas to cater for these needs. In addition it is forecast that container
movements through Port Botany are expected to increase from 2.3 million 20 foot equivalent
units (TEU) per annum in 2015 to approximately 6.0 million TEU per annum by 2035.7
Approximately 2/3rds of Port Botany container freight goes through Western Sydney and the
M7 corridor is well positioned to facilitate this movement.8
5
Insights from the Sydney Commercial Vehicle Video Study, Australasian Transport Research Forum 2015 Proceedings 30
September – 2 October 2015, Sydney, Australia, http://www.atrf.info/papers/index.aspx page 11.
6
A Plan for Growing Sydney, NSW Government Planning and Environment, December 2014,
http://www.planning.nsw.gov.au/~/media/Files/DPE/Plans-and-policies/a-plan-for-growing-sydney-2014-12.ashx page 15.
7
Navigating the Future, NSW Ports 30 Year Master Plan, NSW Port, http://www.nswports.com.au/publications/ page 37.
8
Navigating the Future, NSW Ports 30 Year Master Plan, NSW Port, http://www.nswports.com.au/publications/ page 39.
25
New South Wales economy
7
Sydney is Australia’s most populous city, and New South Wales is Australia’s largest State
by population. New South Wales has a diversified economy and is not reliant on any single
industry.
Fig 1.
Key statistics
Key statistics – New South Wales
Sydney population (2014)9
4.8m
New South Wales population (2014)10
7.5m
New South Wales population growth (2004 –
2014)11
1.2%
Gross State Product growth (2004 - 2014)12
2.0%
Number of vehicles (2015)13
5.2m
Fig 2.
NSW Gross State Product by Sector (FY14)14
Other
9
Australian Bureau of Statistics, catalogue 3218 Regional Population Growth, June 2014
10
Australian Bureau of Statistics, catalogue 3101 Demographic Statistics, December 2014
11
Australian Bureau of Statistics, catalogue 3101 Demographic Statistics, December 2014
12
Australian Bureau of Statistics , catalogue 5220 Australian National Accounts: State Accounts, 2013-14
13
Australian Bureau of Statistics, catalogue 9309 Motor Vehicle Census, January 2015
14
Top 10 sectors shown, Australian Bureau of Statistics, catalogue 5220 Australian National Accounts: State Accounts,
2013-14
26
8
Financial Information
Westlink Motorway Group Consolidated Income Statement
Six months
Six months
Ended 31
Ended 31
December
December
2015
2014
$'000
Year Ended
Year Ended
Year Ended
30 June
30 June
30 June
2015
2014
2013
$'000
$'000
$'000
167,132
129,851
272,001
886
587
168,018
Year Ended 30
Year Ended 30
June 2012
June 2011
$'000
$'000
$'000
236,231
213,069
203,097
193,087
1,349
2,806
3,733
4,627
3,974
130,438
273,350
239,037
216,802
207,724
197,061
(116,037)
(106,097)
(214,964)
(206,881)
(194,762)
(183,136)
(168,541)
Financing Costs – Other
(47,821)
(50,638)
(97,996)
(98,975)
(97,448)
(93,195)
(90,549)
Amortisation and depreciation
(42,112)
(33,916)
(76,362)
(67,826)
(67,844)
(67,846)
(68,403)
Road operating expenses
(24,143)
(18,253)
(39,463)
(43,372)
(43,594)
(45,859)
(45,107)
(230,113)
(208,904)
(428,785)
(417,054)
(403,648)
(390,036)
(372,600)
(62,095)
(78,466)
(155,435)
(178,017)
(186,846)
(182,312)
(175,539)
7,172
1,572
16,675
13,608
26,749
38,815
35,067
(54,923)
(76,894)
(138,760)
(164,409)
(160,097)
(143,497)
(140,472)
(54,923)
(76,894)
(138,760)
(164,409)
(160,097)
(143,497)
(140,472)
REVENUE FROM
CONTINUING OPERATIONS
Toll and fee revenue
Interest income
Financing costs – Related
Parties
EXPENSES FROM
CONTINUING OPERATIONS
LOSS BEFORE INCOME
TAX
Income tax benefit
NET LOSS FOR THE YEAR
AFTER INCOME TAX
BENEFIT
Loss after income tax for the
year is attributable to:
Owners of Westlink
Motorway Group
27
Westlink Motorway Group Revenue, EBITDA and EBITDA Margin Information
Six months
Ended 31
December
2015
Six months
Ended 31
December
2014
Year Ended
30 June
2015
Year Ended
30 June
2014
Year Ended
30 June
2013
Year Ended
30 June
2012
Year Ended
30 June
2011
$'000
$'000
$'000
$'000
$'000
$'000
$'000
167,132
129,851
272,001
236,231
213,069
203,097
193,087
886
587
1,349
2,806
3,733
4,627
3,974
TOTAL REVENUE
168,018
130,438
273,350
239,037
216,802
207,724
197,061
O&M expenses
(10,949)
(6,218)
(13,176)
(19,992)
(20,435)
(22,215)
(20,309)
TCM expenses
(9,741)
(8,791)
(19,538)
(16,840)
(15,912)
(17,468)
(16,747)
Other expenses
(3,453)
(3,244)
(6,749)
(6,540)
(7,247)
(6,176)
(6,715)
143,875
112,185
233,887
195,665
173,208
161,865
153,290
85.6%
86.0%
85.6%
81.9%
79.9%
77.9%
77.8%
INCOME
STATEMENT
Toll & Fee revenue
Interest income
EBITDA
EBITDA margin (%)
28
Westlink Motorway Group Consolidated Balance Sheet
Six months
Ended 31
December
2015
Six months
Ended 31
December
2014
Year Ended
30 June 2015
Year Ended
30 June 2014
Year Ended
30 June 2013
Year Ended
30 June 2012
Year Ended
30 June 2011
$'000
$'000
$'000
$'000
$'000
$'000
$'000
64,987
38,861
49,186
86,056
73,803
82,877
66,175
Receivables
6,677
6,613
7,519
5,838
5,614
6,919
5,939
Other current
assets
24,462
872
24,088
1,507
1,709
1,459
1,350
TOTAL
CURRENT
ASSETS
96,126
46,346
80,793
93,401
81,126
91,255
73,464
1,392
1,411
1,411
1,361
1,356
1,394
1,386
Intangible
assets –
original
concession
1,414,654
1,499,168
1,456,744
1,533,054
1,600,825
1,668,597
1,736,369
Intangible
assets - CEP
1,321,173
-
1,321,173
-
-
-
-
Deferred tax
assets
-
-
-
263,490
249,882
223,133
184,318
Receivables
287,337
265,063
283,422
-
-
-
-
TOTAL NON
CURRENT
ASSETS
3,024,556
1,765,642
3,062,750
1,797,905
1,852,063
1,893,124
1,922,073
TOTAL
ASSETS
3,120,682
1,811,988
3,143,543
1,891,306
1,933,189
1,984,379
1,995,537
ASSETS
CURRENT
ASSETS
Cash and cash
equivalents
NON
CURRENT
ASSETS
Property, plant
& equipment
LIABILITIES
29
Six months
Ended 31
December
2015
Six months
Ended 31
December
2014
Year Ended
30 June 2015
Year Ended
30 June 2014
Year Ended
30 June 2013
Year Ended
30 June 2012
Year Ended
30 June 2011
Payables
354,892
34,035
343,023
43,672
26,499
19,961
9,556
Provisions
11,758
19,496
8,038
4,313
1,607
2,705
9,978
Derivative
financial
liabilities
9,712
40,020
22,742
-
-
4,128
-
-
-
-
505,000
-
500,000
-
376,362
93,551
373,803
552,985
28,106
526,794
19,534
Payables
844,136
-
929,402
-
-
-
-
Provisions
53,297
42,819
51,917
58,489
52,332
46,857
30,623
-
-
3,257
-
-
-
-
71,812
68,946
70,144
90,469
101,708
112,858
19,692
Interest bearing
financial
liabilities
3,311,286
3,053,537
3,207,671
2,540,837
2,949,347
2,351,355
2,738,382
TOTAL NON
CURRENT
LIABILITIES
4,280,531
3,165,302
4,262,391
2,689,795
3,103,387
2,511,070
2,788,697
TOTAL
LIABILITIES
4,656,893
3,258,853
4,636,194
3,242,780
3,131,493
3,037,864
2,808,231
NET
LIABILITIES
(1,536,211)
(1,446,865)
(1,492,651)
(1,351,474)
(1,198,304)
(1,053,485)
(812,694)
CURRENT
LIABILITIES
Interest bearing
financial
liabilities
TOTAL
CURRENT
LIABILITIES
NON
CURRENT
LIABILITIES
Deferred tax
liabilities
Derivative
financial
liabilities
EQUITY
30
Six months
Ended 31
December
2015
Six months
Ended 31
December
2014
Year Ended
30 June 2015
Year Ended
30 June 2014
Year Ended
30 June 2013
Year Ended
30 June 2012
Year Ended
30 June 2011
1
1
1
1
1
1
1
(72,809)
(100,252)
(84,171)
(81,754)
(92,993)
(108,271)
(10,977)
Accumulated
losses
(1,463,403)
(1,346,614)
(1,408,481)
(1,269,721)
(1,105,312)
(945,215)
(801,718)
TOTAL
EQUITY
(1,536,211)
(1,446,865)
(1,492,651)
(1,198,304)
(1,053,485)
(812,694)
Contributed
equity
Reserves
(1,351,474)
31
9
Debt and Ratings
As at 31 March 2016, Westlink Motorway Group had $1,270 million of senior secured debt in
three tranches maturing between 2017 and 2021. The senior debt is provided by a banking
syndicate comprising Australian and international banks.
As at 31 March 2016, the Westlink Motorway Group senior debt composition is provided
below.
Fig 2.
Westlink M7 Senior Debt Composition (as at 31 March 2016)
Debt
Type
Maturity
Facility A
Term Loan
Facility B
Facility C
Weighted Average Debt Maturity
Total
Limit/Drawn
Undrawn
4 August 2017
$520m
$0m
Term Loan
4 August 2019
$525m
$0m
Term Loan
4 August 2021
$225m
$0m
2.9 years
$1,270m
As at 31 March 2016, Westlink Motorway Limited (as nominee for Westlink Motorway
Partnership) has issued $1,836,444,832 of Subordinated Loan Notes to other entities in the
structure – these are fully subordinated to the senior debt.
The net proceeds realised from the issue of Notes will be used for payment of a distribution
by the Westlink Entities, payment of transaction costs, for general corporate purposes and/or
to prepay existing indebtedness of the Issuer.
RMS has confirmed that no consent is required under the M7 Project Deed for the proposed
Note issuance.
The Programme has been assigned a provisional (P) A3 rating from Moody’s Investors
Service Limited and the Issuer holds an A- rating from Fitch Ratings Limited for its existing
senior secured debt facilities.
32
8
Capital Expenditure
Westlink M7’s capital expenditure (“capex”) has averaged $3.275m per annum over the past
four years from FY2012 to FY2015. Over the next 10 years, Westlink M7 plans to spend
approximately $137.7m of maintenance capex, 91% of which will cover pavements,
electronic traffic management and electronic tolling systems.
9
Hedging and Insurance
Hedging
•
The Westlink Motorway Group has a minimum hedging requirement of 75% under its
bank debt documents.
•
As at 31 March 2016, Westlink M7’s senior debt was 100% hedged.
Insurances
•
Under the Westlink M7 Project Deed and financing documents, the Westlink Motorway
Group is required to hold insurance that a prudent operator would be expected to
maintain, including Property/Industrial Special Risks Insurance and Public and Products
Liability Insurance.
•
A summary of the Westlink Motorway Group’s insurance cover is set out below.
Policy
Property
/
Special Risks
Limits
Industrial
Public and Products
Liability
Combined Single Limit, any one loss or series of losses arising out of any one
event $540,000,000.
Public Liability: In respect of any one claim or series of claims arising out of
any one Occurrence during the Period of Insurance $250,000,000
Products Liability: In respect of any one claim or series of claims arising out of
any one Occurrence and in the aggregate during any one Period of Insurance
$250,000,000
33
Project Deed
The rights and obligations of WSO Co and Westlink (each a “Company”) and RMS in relation to the
operation, maintenance and repair of the Westlink M7 Motorway (“Motorway”) are governed by the
Project Deed dated 13 February 2003 (as amended and restated on 31 January 2015) (“Project
Deed”). Westlink enters into the Project Deed as nominee and agent of the partners in the WestLink
Motorway Partnership.
The terms of the Project Deed are largely consistent with other concession deeds for tollroads in New
South Wales.
However, on 31 January 2015, financial close was achieved on the NorthConnex Project which
involves the construction, operation and maintenance of a tolled motorway tunnel linking the M1
Pacific Motorway at Wahroonga to the Hills M2 Motorway at West Pennant Hills. The NorthConnex
Project and the Motorway are held under common ownership by the sponsors through the
NorthWestern Roads Group. The Project Deed was amended in 2015 to insert a number of
provisions relating to the NorthConnex Project.
The key terms of the Project Deed are summarised below.
Capitalised terms not otherwise defined below have the meaning given in the Project Deed.
The table below is intended as an overview only. It is not exhaustive or a comprehensive summary of
the Project Deed. The comments in the table below are qualified in their entirety by reference to the
provisions of the Project Deed, the Project Documents and the other documents described below.
Parties
Westlink Motorway Limited (“Westlink”)
WSO Co Pty Limited (“WSO Co”)
Roads and Maritime Services (“RMS”) (formerly known as the
Roads and Traffic Authority, New South Wales).
Role of the Companies
Westlink and WSO Co (the “Companies”) were granted the right by
RMS to finance, plan, design, construct and commission the Project
Works and Temporary Works.
WSO Co has been granted the right by RMS, and has the
obligation, to operate, maintain and repair the Motorway and to
maintain and repair Third Party Works (as defined in the Project
Deed).
Concession Period
Unless terminated (for example, due to a Project Default that is not
remedied) or extended, the term of the Project Deed will end on
either:
•
if a NorthConnex Trigger Event or NorthConnex
Termination Event occurs, 14 February 2037; or
•
otherwise, 30 June 2048,
(the “Term”).
34
Project
The construction phase for the Project was completed in December
2005.
The Project now comprises the operation, maintenance, repair and
tolling of the Motorway.
Operation and
Maintenance
WSO Co must operate, maintain and repair the Motorway and
maintain and repair the Third Party Works throughout the Term so
that:
•
all traffic lanes on the Motorway are open to the public at
all times during the Term for safe, continuous and efficient
passage of vehicles (whether or not toll collection systems
are operating);
•
the performance of the Motorway meets specified
standards and the Motorway is in a satisfactory condition
for handover to RMS; and
•
the Motorway at all times remains fit for its purpose and
defects are rectified.
No structural changes or changes to the Motorway inconsistent with
the Scope of Works and Technical Criteria (“SWTC”) are permitted
without RMS consent.
Any entity which is engaged by WSO Co to carry out substantial
operation, maintenance or repair works from time to time must have
sufficient experience in operating, maintaining and repairing
tollroads and have sufficiently high financial and commercial
standing to perform its obligations to the requisite standards. Any
replacement operator must be approved by RMS.
The Project Deed does not contain any KPI regime.
Entitlement to Tolls
WSO Co is entitled to levy tolls in accordance with the Toll
Calculation Schedule in the Project Deed (Schedule 8). WSO CO
may levy a toll for each Trip (as defined) by a Vehicle (as defined)
on the Motorway which does not exceed the Theoretical Toll for that
Trip or the Theoretical Toll Cap. Certain vehicles are exempt from
the toll (being any bus used to provide a regular passenger service
or any other vehicle which is exempt under the Roads Act or its
Regulations at the date of the Project Deed).
The Theoretical Toll is the sum of the lengths of the Tollable
Sections through which a Vehicle passes during a Trip multiplied by
the Theoretical Rate for the Quarter during which the Trip occurs.
The Theoretical Rate for a Quarter is determined by a formula
being the result of multiplying the Base Rate ($0.25 per kilometre
(including GST) as at 1 July 2000) by a fraction being CPI for the
Quarter which is 2 Quarters prior to the current Quarter (“Current
CPI”) over CPI for the Quarter expiring 31 March 2000 (“Base
CPI”).
The Theoretical Toll Cap for a Quarter is determined by a formula
35
being the result of multiplying the Base Toll Cap ($5.00 (including
GST) as at 1 July 2000) by a fraction being Current CPI over Base
CPI.
Because each of the Theoretical Toll and Theoretical Toll Cap is
calculated by reference to a fraction being Current CPI over Base
CPI, tolls for a Quarter may decrease where Current CPI is less
than Base CPI.
WSO Co can increase Tolls quarterly within these parameters
provided it has given RMS 20 Business Days’ prior notice. The
increase will take effect on the next Quarterly Date (i.e. the first day
of the next calendar Quarter). Also, if any new State or
Commonwealth tax is imposed, or an existing State or
Commonwealth tax is increased, on the Tolls levied by WSO Co,
WSO Co can increase its Tolls above the rates otherwise permitted
for each Quarter that the tax applies – the increase cannot exceed
the lesser of the maximum increase permitted by law and an
amount sufficient to ensure that the net position of WSO Co is no
worse than it was prior to the tax being imposed.
The restrictions on toll increase do not apply to the increase in the
Toll for Heavy Vehicles contemplated by clause 9(a) of the Toll
Calculation Schedule. WSO Co is entitled to levy Tolls on each Trip
taken by a Heavy Vehicle on the Motorway in accordance with the
multiplier table set out in clause 9(a)(i) of the Toll Calculation
Schedule commencing 5 Business Days after the date of
NorthConnex Financial Close (which occurred on 31 January 2015).
If NorthConnex RMS Abandonment occurs (i.e. RMS terminates the
NorthConnex Project Deed as a result of RMS issuing an
abandonment notice) or NorthConnex RMS Completion occurs (i.e.
RMS terminates the NorthConnex Project Deed as a result of RMS
issuing a notice of its election to terminate the NorthConnex Project
Deed), then RMS must cancel the Heavy Vehicle Toll allowed under
this clause once it has recovered any NorthConnex Shortfall
Amount from the Heavy Vehicle Toll Uplift Account or earlier if RMS
so elects - if this occurs, Heavy Vehicles will then be tolled at the
same rate as Passenger Vehicles.
If a NorthConnex Termination Event occurs (i.e. termination of the
NorthConnex Project prior to achievement of completion), then
unless otherwise agreed by RMS, as soon as reasonably
practicable after termination of the NorthConnex Project Deed,
RMS must cancel the Heavy Vehicle Toll allowed under this clause
- if this occurs, Heavy Vehicles will then be tolled at the same rate
as Passenger Vehicles.
WSO Co:
•
is obliged to offer a Standard Account (as defined) to all
Users and is not entitled to charge any fee for the provision
or use of that account (unless Additional Account Services
are provided);
36
Transport Network
Management
•
must give Casual Users that complete a Trip an
opportunity to pay the Toll as a deferred toll consistent with
the procedures adopted by other private tollway operators
from time to time;
•
may levy an Administration Fee for any Quarter for
providing a temporary tag or allowing a Casual User to pay
the Toll as a deferred toll, can review that fee once a
Quarter and may increase the fee after giving notice to
RMS; and
•
may levy an Administration Fee for the provisions of
Additional Account Services (as defined), can review that
fee once a Quarter and may increase the fee after giving
notice to RMS.
Consistent with other concession agreements for NSW tollroads,
the Project Deed does not restrict or limit the right of RMS or the
NSW Government to:
•
develop, construct, operate or maintain other tollways,
tunnels, freeways and roads in New South Wales;
•
maintain, manage, change or extend Sydney’s
transportation network or traffic support systems; or
•
extend, alter, close or upgrade existing roads or public
transportation services.
However, if:
•
a Competing Road Project (being one of the projects
specified in schedule 13 to the Project Deed) is completed
and opened to traffic prior to the end of the Term;
•
relevant traffic connections to the Motorway are closed or
materially reduced (other than temporary diversions,
restrictions or closures for agreed reasons);
•
the Motorway ceases to be designated as a National
Highway with relevant connections to other motorways,
(each a “Change in Motorway Status Event”) the “Material
Adverse Effect” provisions described below will apply.
RMS has retained a Public Transport Corridor which does not form
part of the Motorway Stratum for the purpose of accommodating
possible future public transportation services. To this end, RMS or
the NSW Government may:
•
connect any road or other vehicular or pedestrian access to
the Motorway;
•
construct, operate and maintain public transportation
services or other infrastructure in the Public Transport
37
Corridor; or
•
connect Services or other improvements to the Motorway
or structures located in the Public Transportation Corridor,
(“Permitted RMS Activities”).
RMS must coordinate carrying out Permitted RMS Activities with
the Companies to minimise the impacts on operation and use of the
Motorway, and the Companies must cooperate with RMS and
provide access to the Motorway to carry out RMS Permitted
Activities. To date these provisions have been utilised by RMS in
connection with the widening of the M5 Motorway and an upgrade
of the Old Wallgrove Road Interchange and in each case, RMS and
WSO Co has entered into an interface agreement to regulate the
impact of these construction activities on the Motorway.
The carrying out of a Permitted RMS Activity does not trigger the
Material Adverse Effect provisions of the Project Deed unless it
involves:
•
the construction, operation or maintenance of one or more
public transport services in the Public Transport Corridor or
the Motorway Stratum; or
•
connects any such public transport services to the
Motorway or any other structures located within the Public
Transport Corridor or the Motorway Stratum,
(referred to as “Public Transport Corridor Activities”).
Material Adverse Effect
If, among other things:
•
a Change in Motorway Status Event occurs;
•
certain Public Transport Corridor Activities are carried out
by RMS;
•
a Discriminatory Change in State Law occurs; or
•
an Uninsurable Event occurs;
•
there is any change in toll enforcement or recovery
procedures by the Government or any Authority from that
applying at the date of the Project Deed,
and this has had or has started to have a Material Adverse Effect,
upon request from the Companies, RMS must negotiate in good
faith to enable:
•
the Issuer to continue to meet its repayment obligations
under the Finance Documents that are or would have been
owing but for the occurrence of the relevant event on the
due dates for payment of those amounts in accordance
with the Base Case Financial Model (as defined in the
38
Project Deed); and
•
an internal rate of return to still be paid by the Westlink
Partners and WSO Co.
Negotiations must take a flexible approach including giving
consideration to amending the Project Documents, varying the
Term, adjusting the Toll Calculation Schedule, varying financial
contributions of the parties and other appropriate action.
Material Adverse Effect is defined by reference to the ability of the
Issuer to meet its obligations under the Debt Finance Documents
and the ability of the Westlink Partners and WSO Co to provide the
rate of return as specified in the Project Deed.
The rate of return specified by the Project Deed is the lesser of:
(a)
the returns the Equity Investors in the Westlink Motorway
Group and the Concession Enhancement Investor (being
NorthConnex Investor Finco, the funding vehicle which
provides certain loans to WSO Co so WSO Co can in turn
make certain payments to NorthConnex Project Co for M7
concession enhancements) would have received but for
the event causing a Material Adverse Effect; and
(b)
the sum of:
(i)
the Equity Investors’ return on the Initial Equity
(assuming all Initial Equity was contributed on 14
February 2003 and remains invested until the end
of the Term) (assuming no circumstance of early
termination or extension); and
(ii)
on or prior to the NorthConnex Date of
Completion, to the Concession Enhancement
Investor (being NorthConnex Investor Finco), the
Concession Enhancement Pre-Completion Return
on Forecast Concession Enhancement Advances
calculated from the time that each Concession
Enhancement Advance was forecast to be made
under the M7 Model Outputs Schedule (as defined
in the Project Deed) until the end of the Term
(assuming no early termination or extension); or
(iii)
after the NorthConnex Date of Completion, to the
Concession Enhancement Investor (being
NorthConnex Investor Finco), the Concession
Enhancement Post-Completion Returns on
Forecast Concession Enhancement Advances
calculated from the time that each Concession
Enhancement Advance was forecast to be made
under the M7 Model Outputs Schedule until the
end of the Term (assuming no early termination or
extension.
39
In determining whether any Public Transport Corridor Activities
have had a Material Adverse Effect, any effect which either the
existence of the public transport service, or the use of the public
transport service by persons that might otherwise have used the
Motorway, has on traffic usage of the Motorway must be
disregarded.
Similarly, changes to the Project Deed as a result of the
NorthConnex Project or any event or circumstance related to the
NorthConnex Project will not entitle the Companies to trigger the
Material Adverse Effect regime even if those events do have a
Material Adverse Effect.
Project Default
Events of Default under the Project Deed include the following:
(a)
WSO Co closes or permits the closure of traffic lanes on
the Motorway other than as permitted under the Project
Deed;
(b)
either Company fails in a material way to operate, maintain,
repair or insure the Motorway in accordance with the
Project Deed;
(c)
a Company, the Issuer or a Westlink Partner defaults in a
material respect in its observance or performance of any of
its other obligations under the Project Deed or a Project
Document to which RMS is a party;
(d)
an Insolvency Event occurs in relation to a Company, the
Issuer or a Westlink Partner;
(e)
an Insolvency Event occurs in relation to a Contractor,
Operator, TCM Operator or a Contractor Guarantor
(subject to a 60 day period in which to replace that person
with a reputable and solvent replacement with the
resources and expertise to perform the relevant
obligations); or
(f)
an Insolvency Event occurs in relation to the Technology
Operator and the Companies do not demonstrate to RMS
within 60 days of the Insolvency Event that they are able to
continue levying and collecting tolls.
If an Event of Default occurs, RMS may give notice to the
Companies requiring that the Event of Default is remedied.
•
In the case of paragraph (a) above, the remedy period is 2
days.
•
In the case of an Event of Default due to a failure to make
a required payment, the remedy period is 10 Business
Days (or 30 Business Days in the case of a failure to make
a required payment into the Heavy Vehicle Toll Uplift
Account).
40
•
In the case of each other Event of Default, the remedy
period is as specified in RMS’ notice (not to exceed 40
Business Days and having regard to RMS’ opinion as to a
reasonable period to remedy the Event of Default).
Under the RMS Consent Deed (see below), RMS must also notify
the Security Trustee of the Event of Default.
The Companies must consult with RMS and provide a program to
RMS to remedy the Event of Default (other than in the case of a
payment default). If the Companies in good faith consider that the
remedy periods are insufficient they are entitled to notify RMS and
provided the Companies are diligently pursuing the remedy and the
Motorway is open to the public, an extension will be granted. The
aggregate amount of time for which the remedy period can be
extended is 6 months in respect of the relevant Event of Default.
Termination by RMS
If an Event of Default is not remedied (or its effects overcome) in
the required period (as may be extended) or if at any time during
the remedy period:
•
the Motorway is not open to the public; or
•
the Companies are not diligently pursuing the remedy of
the Event of Default,
RMS may give either Company 20 Business Days’ notice that it
intends to terminate the Project Deed. At the end of the 20
Business Day period, if the Event of Default has not been remedied,
RMS can terminate the Project Deed by written notice.
RMS is not liable to pay any compensation or other moneys to the
Companies if it terminates the Project Deed as a result of an Event
of Default. RMS is entitled to recover all Loss that RMS suffers or
incurs arising out of or in any way in connection with the termination
of the Project Deed.
If RMS terminates the Project Deed, it can require the novation of
the O&M Agreement, TCM Agreement and the Technology
Implementation and Services Agreement, in each case under the
relevant consent deed in respect of those contracts.
Termination by the
Companies
The Companies may terminate the Project Deed by giving RMS 30
Business Days’ notice if:
•
a Final Determination by a court prevents a Company
from undertaking the Project substantially in accordance
with the Project Deed (except where a Company or its
contractors are in default under the Project Documents)
and RMS fails to procure that the effects of the Final
Determination are overcome within 12 months;
•
the Government enacts legislation preventing (or which
has the effect of preventing) a Company undertaking the
41
Project substantially in accordance with the Project Deed;
•
an Authority resumes part of the Motorway Stratum and
this results in the Companies being prevented from
undertaking the Project substantially in accordance with
the Project Deed; or
•
RMS breaches the provisions of the Project Deed
requiring the Companies to be given access to the
Project Site and this is not remedied within 12 months
and the Companies are prevented from undertaking the
Project substantially in accordance with the Project Deed.
If the Companies issue a Termination Notice to RMS, RMS may (by
giving notice within 30 Business Days of the termination notice from
the Companies) suspend the Companies’ right to terminate. The
suspension of the Companies’ right to terminate will cease upon the
earlier of:
(a)
12 months from the date of the Companies’ termination
notice;
(b)
RMS giving notice to the Companies that the suspension
no longer applies; or
(c)
when the relevant event is remedied by RMS or no longer
exists.
In the case of (a) and (b) above, the Project Deed will terminate
automatically upon the suspension ceasing and RMS must pay the
Early Termination Amount within 30 days.
The “Early Termination Amount” is the aggregate of:
•
the Project Debt on that date;
•
amounts payable at that date by the Westlink Partners or
WSO Co as a consequence of termination (including
amounts payable to Contractors); and
•
an amount to compensate the investors for their Equity
Return – this amount varies according to whether the
NorthConnex Date of Completion has occurred.
If it is lawful and practical, the Companies must continue to perform
their obligations during the period of suspension. RMS must pay the
Companies an amount during the suspension to ensure the
Companies are in the same position (including after tax) they would
have been in had the event giving rise to the termination notice and
suspension not occurred.
Change of Control
Prior to the NorthConnex Date of Completion
Prior to the NorthConnex Date of Completion:
42
•
the direct legal and beneficial ownership of WSO Co
must remain unchanged; and
•
without the consent of RMS (not to be unreasonably
withheld), the Companies must not permit:
(a)
any Change of Control of either Company, any
Westlink Partner or the Issuer; or
(b)
a person:
(i)
(ii)
who is not an Ultimate Shareholder; or
who is an Ultimate Shareholder but
which is an entity managed by an Ultimate
Shareholder (and not ultimately owned by
an Ultimate Shareholder) which does not
after the date of the Project Deed or as
approved by RMS have an economic
interest in the shares of either Company,
to acquire any shares, units or economic interest
in shares or units in any Holding Company (other
than an Ultimate Shareholder) of either
Company, a Westlink Partner or the Issuer.
RMS’ consent is not required for a change in, or the appointment of,
the responsible entity, trustee or custodian of an entity where there
is no change in the ultimate beneficial ownership of that entity.
After the NorthConnex Date of Completion
After the NorthConnex Date of Completion, any Change of Control
of either Company, the Westlink Partners or the Issuer will be
deemed to be an assignment by the Companies of their interest in
the Project Deed and other Project Documents which must comply
with the assignment provisions under clause 31.1 of the Project
Deed.
Refinancing
General
The Project Deed contains a detailed regime which applies where
the Companies or the Issuer wish to undertake a Refinancing
(including a regearing).
The Companies and the Borrower may raise any form of financial
accommodation (including bonds) and the Refinancing may be
denominated in Australian dollars or foreign currency.
Under the Project Deed, the Companies are required to provide
information requested by RMS a certain number of days before the
expected date of financial close of the Refinancing regarding:
•
the terms of the Refinancing (nature of financial
accommodation, terms, tenor etc.);
•
aggregate Upfront Costs (where such costs are permitted
43
to be capitalised, subject to a maximum cap); and
•
whether the Issuer considers that the Refinancing
requires RMS consent, is an Abridged Consent
Refinancing or is a No Consent Refinancing.
A No Consent Refinancing does not need any consent from RMS
but must satisfy certain conditions being:
•
the Refinancing is on arm’s length terms;
•
the Refinancing will not have the effect of deferring the
amount or timing of amortisation of the Project Debt as
against the agreed debt profile;
•
the Refinancing does not involve entry into an Exotic
Swap or Accreting Instrument;
•
at any time prior to 30% of the NorthConnex Capital
Contributions being made, the Refinancing will not result
in an increase in the principal amount of Project Debt
other than by an amount equal to upfront costs permitted
to be capitalised up to the agreed upfront costs cap;
•
at any time after 30% of the NorthConnex Capital
Contributions have been made, the Refinancing will not
give rise to the occurrence of the first Trigger Event (i.e.
the amount of Qualifying Additional Debt (being the
aggregate of Additional M7 Debt and any NorthConnex
Debt) equalling or exceeding $1.5 billion);
•
prior to the occurrence of the first Trigger Event, if
Additional M7 Debt is being raised, the Refinancing will
not result in the ICR being less than 2.0:1 or any DSCR
being less than 2.0:1;
•
after the first Trigger Event has occurred, the Refinancing
will not cause an increase in the Project Debt; and
•
the Refinancing is not an amendment, restatement,
replacement, waiver or consent to cure any actual event
of default or review event under any Debt Financing
Document.
An Abridged Consent Refinancing requires limited RMS consent
(essentially in relation to the quantum and timing of RMS share of
any Refinancing Gain) and must satisfy certain conditions being:
•
the Refinancing is supported by a Refinancing Model
prepared as specified in the Project Deed;
•
the Refinancing is on arm’s length terms;
•
either:
44
•
the first Trigger Event has occurred and the
Refinancing results in an increase in the principal
amount of Project Debt but Qualifying Additional
Debt after the Refinancing is completed does not
exceed $2 billion; or
•
the Refinancing would result in Additional M7 Debt
exceeding the amount of $1,050 million but does
not result in a Trigger Event occurring;
•
the Refinancing does not involve entry into an Exotic
Swap or Accreting Instrument;
•
the Refinancing will not be entered into earlier than 2
years after the date of financial close of the last Abridged
Consent Refinancing or Consent Refinancing;
•
the Refinancing will not result in the ICR being less than
2.0:1 or any DSCR being less than 2.0:1;
•
the Refinancing is not an amendment, restatement,
replacement, waiver or consent to cure any actual event
of default or review event under any Debt Financing
Document; and
•
the parties have agreed on the amount and timing of
payment of RMS’ Refinancing Gain.
Any Refinancing other than a No Consent Refinancing or an
Abridged Consent Refinancing requires RMS consent (referred to
as a “Consent Refinancing”) which can be given or withheld in
RMS’ absolute discretion. RMS is not obliged to consider any
consent request more often than 2 years after the date of financial
close of the last Abridged Consent Refinancing or Consent
Refinancing.
RMS is given a period of time under the Project Deed to consider
the Companies’ and Issuer’s information and submission and
respond.
Refinancing Gain sharing
For any Refinancing which causes or occurs after the occurrence
of, the first Trigger Event (i.e. when the aggregate amount of
Additional M7 Debt and NorthConnex Debt exceeds $1.5 billion)
other than a Refinancing which occurs after the occurrence of the
first Trigger Event and does not involve incurrence of any additional
Qualifying Additional Debt or deferral of amortisation of existing
debt, the Refinancing Gain must be calculated by the Companies in
accordance with clause 31.4(f) of the Project Deed. RMS is entitled
to be paid 50% of the amount of any Refinancing Gain (“RMS
Refinancing Share”). The RMS Refinancing Share is a debt due
from the Companies to RMS, payable in the amounts and at the
times agreed between the Companies and RMS.
45
Proposed A$MTN Issuance
In respect of the raising of financial accommodation through an
A$MTN which is the subject of this Information Memorandum, the
Companies and the Issuer have provided relevant information to
RMS and received RMS’ confirmation that the transaction
constitutes a No Consent Refinancing.
This is on the basis that all conditions for a No Consent Refinancing
have been or will be met other than the condition which requires
that 30% of the NorthConnex Capital Contributions must have been
made before a Refinancing which results in the aggregate principal
amount of the Project Debt increasing. In this regard, the
Companies and the Issuer has sought and obtained a waiver of this
condition from RMS.
Amendments to the
Project Documents
The Companies must not, without RMS’ consent:
•
make any modifications, variations or amendments of a
material nature to or terminate or surrender any of the
Project Documents; or
•
permit the novation, assignment or substitution of any
counterparty’s rights, obligations or interests in any
Project Document.
RMS’ consent will be deemed to be given after 10 Business Days if
RMS fails to respond to such a request for consent.
Ring Fencing
The Project Deed imposes an obligation on the Companies, the
Issuer, the Westlink Partners, any holding company of a Company
and certain Sponsors Entities (being the various entities comprising
the NorthWestern Roads Group) not to enter into any transactions
or arrangements with any Associate of a Company which are:
•
not on an arm’s length and commercial basis; or
•
which are unnecessary for, or of a scale and nature
beyond that required for, the efficient and effective
carrying out of the Companies’ obligations under the
Project Documents.
Associate has the meaning given in sections 12 and 15 of the
Corporations Act.
The Companies must report on this to RMS in their annual and half
yearly reporting.
There is a regime which allows an Associate to be engaged by the
Companies for a period not exceeding 24 hours in the event of an
emergency situation on the Motorway where entry into such a
transaction with an Associate is urgently required to deal with that
emergency.
RMS is deemed to have consented to certain specified contracts for
46
the purpose of this regime including the O&M Agreement, the TCM
Agreement, the TCM Technical Services Agreement, the TISA, the
Management Services Agreement, the NorthConnex/M7 Interface
Deed and certain funding arrangements between WSO Co and
various NorthConnex companies.
PAFA Act Guarantee
The State of New South Wales has issued a guarantee by way of
deed poll dated 4 August 2014 pursuant to s.22B of the Public
Authorities Financial Arrangements) Act 1987 (NSW). The
beneficiaries of that guarantee are WML, WSO Co and the Security
Trustee. The guarantee by the State is of the financial obligations of
RMS under the Project Deed, RMS Consent Deed and other project
documents to which RMS is a party.
M7 Motorway Stratum
Lease
RMS and Westlink Motorway Limited (“WML”) entered into the
Motorway Stratum Deed of Agreement to Lease dated 13 February
2003 (“Agreement to Lease”). The Agreement to Lease was
amended on 31 January 2015 in connection with NorthConnex
Financial Close. Attached to the Agreement to Lease is an agreed
form of Motorway Stratum Lease (“Lease”).
The Agreement to Lease requires WML to carry out an “as built”
engineering survey of the M7 Motorway and for the drawings
resulting from that survey and a 3 dimensional computer model of
the Motorway to be delivered to RMS. On receipt of this material
(and similar material from WSO Co under the Gantry Land
Agreement to Lease), RMS is then obliged to use its reasonable
endeavours to prepare and cause to be registered under the Real
Property Act 1900 (NSW) plans of consolidation and subdivision in
relation to the Motorway Stratum to minimise the number of titles
comprising the Motorway Stratum and then provide WML with the
registered plan of consolidation or subdivision as soon as the plan
is registered.
RMS is not obliged to execute the Lease and deliver it to WML in
registrable form until the plans of consolidation or subdivision have
been registered and certificates of title for the Motorway Stratum
have been issued by Land and Property Information New South
Wales. As yet, RMS has not executed the Lease as the process of
consolidation and subdivision in relation to the Motorway Stratum
has not yet been completed.
Until the Motorway Stratum Lease is in registrable form, the
respective rights and obligations of RMS and WML in respect of the
Motorway Stratum are as set out in the draft Lease attached to the
Agreement to Lease.
Under the draft Lease, WML agrees to pay the Rent (as defined) to
RMS within 20 Business Days of the completion of each Rent
Period. A Rent period is each period of 12 months falling within the
Term of the Project Deed (and any stub period from the
Commencement Date to the next 30 June and from the last 30
June to the Termination Date).
47
The Rent is structured so as to provide financial benefits to RMS
over the Term by way of a revenue sharing mechanism. On and
from the date of NorthConnex financial close (January 2015), the
Rent payable is the aggregate of:
(a)
$1.00;
(b)
in respect of each Non-toll Business, the share of gross
revenue derived from the Non-toll Business as agreed
between RMS and WML under clause 17.3 of the Project
Deed;
(c)
the “Base Rent” being the amount specified in Schedule 2
annexed to the Lease for the relevant Rent Period;
(d)
the “Additional Rent” which for the relevant Rent Period is
the aggregate of:
(i)
0% of the amount of Actual Revenue that is greater
than 100% and less than or equal to 110% of
Incremental Base Revenue;
(ii)
30% of the amount of Actual Revenue that is
greater than 110% and less than or equal to 115%
of Incremental Base Revenue; and
(iii)
50% of the amount of Actual Revenue that is
greater than 115% of Incremental Base Revenue,
subject to a reduction mechanism related to the financial
performance of NorthConnex.“Non-toll Business” is the use of the
Motorway or the Motorway Stratum by WML or WSO Co for any
business or revenue generating activity other than the collection of
tolls in accordance with the Project Deed. To date, the only revenue
sharing arrangement agreed in respect of Non-toll Business is an
arrangement to share 50% of the rent paid by Roam for its
accommodation at Eastern Creek Control Centre with RMS.
The aggregate Base Rent payable over the period from the Quarter
ending 30 September 2015 to the Quarter ending 30 June 2037 is
$358,831,000.
Incremental Base Revenue is, in respect of any Rent Period, the
aggregate of tolls and charges (excluding GST) specified for that
period in the Base Case Financial Model (as at NorthConnex
Financial Close). Actual Revenue is, in respect of any Rent
Period, the aggregate of tolls and charges (excluding GST)
(excluding GST) collected in accordance with the Project Deed. If,
for any Rent Period that commences on or after NorthConnex
Completion and ends on or prior to termination of the NorthConnex
Project Deed, NorthConnex Actual Revenue is less than
NorthConnex Base Revenue, the M7 Additional Rent must be
reduced by a sufficient amount to ensure that, in respect of that
Rent Period, the M7 Additional Rent is equal to the Aggregate
48
Additional Revenue (“AAR”) where:
AAR = (Actual Revenue plus NorthConnex Actual Revenue) LESS
(Incremental Base Revenue plus NorthConnex Base Revenue)
NorthConnex Actual Revenue is, for any Rent Period, the actual
toll revenue generated by NorthConnex in that Rent Period.
NorthConnex Base Revenue is, for any Rent Period, the
aggregate of tolls and charges (excluding GST) specified for that
period in the NorthConnex Base Case Financial Model (as at
NorthConnex Financial Close)(as defined in the NorthConnex
Project Deed).
WML is liable to pay all land-based rates, Taxes and charges in
respect of the Motorway Stratum. This is subject to a
reimbursement regime in clause 20.1(b) of the Project Deed
whereby RMS reimburses Westlink for all land tax in respect of the
Motorway Stratum and water, sewerage and drainage rates (other
than water usage rates) in excess of $50,000 per annum (indexed
annually by CPI) .
49
Interrelationship between NorthConnex and Westlink
Below is a description of the manner and extent to which there is an interface with, or interrelationship between, the Westlink and NorthConnex Projects. Importantly, Westlink’s financial
exposure to the failure of the NorthConnex Project is limited to the incremental heavy vehicle toll uplift
money deposited into a specific bank account (as described below) over which RMS has first ranking
security.
M7 Concession Enhancements
As part of the agreement with NWRG Shareholders to build NorthConnex, RMS agreed to provide
certain benefits to Westlink. In that regard, the M7 Project Deed was amended in 2015, amongst
other things, to:
(a)
extend the term of the existing concession under the M7 Project Deed to 30 June 2048
(unless a NorthConnex Trigger Event or NorthConnex Termination Event occurs in which
case the term will expire on the original expiry date of 14 February 2037 (unless RMS
decides otherwise)); and
(b)
grant WSO Co a right to charge heavy vehicles using the M7 Motorway an additional
amount referred to as the ‘Heavy Vehicle Toll Uplift’,
(each referred to as a “M7 Concession Enhancement”).
The M7 Concession Enhancements will not become permanent unless and until the NorthConnex
Project is completed.
In addition, the M7 Project Deed was amended in 2015 to include a regime which allows the Westlink
M7 Concessionaires to raise additional debt provided certain conditions are met. The regime is
summarised in detail in the Project Deed section of this Information Memorandum. In summary, the
regime allows the Westlink M7 Concessionaires to potentially raise a total amount of additional debt
of up to $2 billion. This additional debt regime applies across both the M7 Project Deed and the
NorthConnex Project Deed – therefore, to the extent that the NorthConnex Project raised external
debt in the future, that debt would reduce the $2 billion additional debt cap for the Westlink M7
Concessionaires by the same amount. After the later of 1 June 2016 and $399 million (which is
approximately 19% of the NorthConnex Capital Contributions) of the NorthConnex Capital
Contributions having been made and provided certain other conditions are met (including a
requirement that Interest Cover Ratio and Debt Service Cover Ratio tests be not less than 2.0:1 after
the additional debt raising), the Westlink M7 Concessionaires can raise additional debt of up to $1.05
billion without RMS consent.
NorthConnex funding arrangements
All of the private sector funding for the NorthConnex Project is provided by the NWRG investors. The
balance of funding for the project is provided by the NSW and Federal Governments in equal parts.
Part of that funding provided by NWRG investors is directed to WSO Co by NorthConnex Finance Co
Pty Limited (“NorthConnex Investor Finco”) under the WSO Funding Facility Deed dated 3
December 2014 between WSO Co and NorthConnex Investor Finco (“WSO Funding Facility
Deed”).
In turn, and as consideration for the M7 Concession Enhancements, WSO Co uses that funding to
make payments to NCX Project Company. This is documented in the M7 Concession Enhancement
Payment Deed dated 3 December 2014 between WSO Co and the NCX Project Company (“CEP
Deed”). Under the CEP Deed WSO Co is required to make monthly payments (“M7 Concession
50
Enhancement Payments”) to NCX Project Company for the increased value to its existing
concession as a result of the M7 Concession Enhancements.
Under the CEP Deed, WSO Co is not required to make any M7 Concession Enhancement Payment
if:
•
there is an event of default subsisting under the M7 Finance Documents;
•
WSO Co has not received an amount equal to the relevant M7 Concession Enhancement
Payment from NorthConnex Investor Finco under the WSO Funding Facility Deed; or
•
(except in the case of the first M7 Concession Enhancement Payment) where there is an
event of default subsisting under the NorthConnex Project Deed or the M7 Project Deed.
The M7 Concession Enhancement Payments can only be used by NCX Project Company to make
payments to the NorthConnex D&C Contractor in the amounts and at the times required under the
NorthConnex D&C contract and to pay other costs, expenses and liabilities properly incurred or to be
incurred by NCX Project Company.
NCX Project Company is not required to repay any amounts paid by WSO Co under the CEP Deed.
Likewise, WSO Co does not have a right to claim repayment of any amount paid by it to NCX Project
Company (including where there is a loss of the M7 Concession Enhancements as a result of
termination of the NorthConnex Project Deed or termination of the M7 Project Deed).
WSO Co Indemnity and Heavy Vehicle Toll Uplift Account
One of the M7 Concession Enhancements is that WSO Co is entitled to levy increased tolls on each
trip taken by a Heavy Vehicle on the M7 Motorway in accordance with the multiplier table set out in
clause 9(a)(i) of Schedule 8 (“Toll Calculation Schedule”) of the M7 Project Deed. Unless and until a
NorthConnex Trigger Event occurs, WSO Co is entitled to keep these uplifted Heavy Vehicle Tolls.
A NorthConnex Trigger Event can occur if:
(a)
an event of default occurs under the NorthConnex Project Deed prior to NorthConnex
Completion; and
(b)
that event of default is not remedied within the relevant cure period, or the NorthConnex
Project Company is not diligently pursuing the remedy of the event of default,
and RMS issues the NorthConnex Project Company with either:
(c)
a NorthConnex Abandonment Notice whereby RMS elects to abandon the NorthConnex
Project and terminate the NorthConnex Project Deed; or
(d)
a NorthConnex Pre-Completion Termination Notice whereby RMS elects to terminate the
NorthConnex Project Deed and thereafter complete the works itself.
WSO Co must maintain the Heavy Vehicle Toll Uplift Account (“HVTUA”) with the Account Bank
under the M7 Finance Documents. RMS has sole control and first ranking security over the HVTUA.
Once a NorthConnex Trigger Event has occurred, WSO Co must deposit into the HVTUA, on a
quarterly basis, an amount equivalent to the Heavy Vehicle Toll Quarterly Uplift Amount. This is a preagreed amount for each quarter.
51
WSO Co is only obliged to fund the HVTUA to the extent of any amount standing to the credit of the
Proceeds Accounts (maintained by it under the M7 Financing Documents) which it would otherwise
have been entitled to distribute to shareholders (i.e. after making all required debt service payments).
If it does not have enough standing to the credit of those accounts to cover the pre-agreed Heavy
Vehicle Toll Quarterly Uplift Amount, any shortfall must be transferred to the HVTUA in the following
quarter (again, only to the extent that cash is available post servicing all debt obligations).
On the basis that WSO Co is only required to fund the HVTUA after meeting all required debt service
obligations, Westlink lenders do not bear any risk in relation to this arrangement.
If a NorthConnex Trigger Event or a NorthConnex Termination Event occurs (i.e. the NorthConnex
Project Deed is terminated prior to the NorthConnex Project being completed), the Heavy Vehicle Toll
Uplift will terminate (unless RMS decides otherwise). In relation to the Heavy Vehicle Toll Uplift, if:
•
NorthConnex RMS Abandonment occurs (i.e. RMS terminates the NorthConnex Project
Deed after issuing a NorthConnex Abandonment Notice);
•
NorthConnex RMS Completion occurs (i.e. RMS terminates the NorthConnex Project Deed
after issuing a NorthConnex Pre-completion Termination Notice); or
•
a NorthConnex Termination Event occurs,
RMS must give a notice to WSO Co cancelling the Heavy Vehicle Toll Uplift – thereafter Heavy
Vehicles will return to being tolled in the same way as passenger vehicles. In the case of
NorthConnex RMS Abandonment or NorthConnex RMS Completion, RMS can give this notice after it
has recovered the NorthConnex Shortfall Amount from the HVTUA or earlier if it so elects (in which
case it forgoes any further right to recover the NorthConnex Shortfall Amount).
Indemnity
Pursuant to clause 38 of the M7 Project Deed, where a NorthConnex Trigger Event occurs, WSO Co
indemnifies RMS from and against the NorthConnex Shortfall Amount.
The “NorthConnex Shortfall Amount” is the shortfall between
(a)
amounts which the NorthConnex Project Company is liable to RMS under the NorthConnex
Project Deed in the event that the NorthConnex Project is abandoned or terminated; and
(b)
the amounts RMS recovers by claiming on letters of credit to the value of $450m provided
to RMS in respect of the NorthConnex Project by the NWRG investors.
Importantly, WSO Co’s liability to RMS under the indemnity:
(c)
may only be satisfied by RMS making withdrawals from the HVTUA in accordance with the
M7 Project Deed; and
(d)
is limited to the aggregate of all Heavy Vehicle Toll Quarterly Uplift Amounts that WSO Co
is obliged to have deposited at any time into the HVTUA in accordance with the M7 Project
Deed.
Therefore, in circumstances where the NorthConnex Project is terminated or abandoned, RMS’
recourse to WSO Co is limited to the funds in the HVTUA. WSO Co has no other direct financial
exposure in respect of the NorthConnex Project.
52
Integration of NorthConnex and Westlink Services
Clause 15A.1 of the M7 Project Deed sets out WSO Co’s entitlement to adopt a contractual structure
whereby the performance of WSO Co's operation, maintenance and repair obligations under the M7
Project Deed and tolling services required in respect of the M7 Motorway may be integrated, in part
or in whole, with equivalent services for other tollroads. This may be achieved by subcontracting the
performance of all or part of the services to subcontractors which may also perform equivalent
services for those other tollroads (“Integrated Operating Services”). WSO Co also retains a right to
perform those services itself or engage subcontractors to perform those services.
WSO Co cannot implement any Integrated Operating Services unless certain requirements have
been met including:
•
preparation of an Integration Plan which has been reviewed by RMS;
•
various requirements being met by the services provider;
•
if the services provider is an Associate of WSO Co, the ring fencing requirements in clause
35.20 of the M7 Project Deed having been met (namely that the arrangement has been done
on an arm’s length and commercial basis and is necessary for the efficient and effective
carrying out of the obligations); and
•
if required by RMS, the services provider having entered into a side deed with RMS.
Under clause 15A.7 of the Project Deed, RMS has acknowledged that WSO Co intends to adopt a
contractual structure whereby the performance of the tolling services for the M7 Motorway will be
integrated with the performance of equivalent services for other tollroads. This will occur by WSO Co
subcontracting the tolling services to Roam under the TCM Management Agreement and to
Transurban under the Technology and Implementation and Services Agreement – Roam and
Transurban will perform the same services for other tollroads (including for NorthConnex) under
separate contracts with those tollroads.
NorthConnex/M7 Interface Deed
Part of the NorthConnex Project involves NCX Project Company undertaking some cabling work on
the M7 Motorway which requires occupation of parts of the M7 Motorway and modifications to the M7
Motorway (“NorthConnex Works”).
This has the potential to disrupt the operation of and maintenance activities on the M7 Motorway and
so WSO Co, Westlink and NCX Project Company entered into the NorthConnex/M7 Interface Deed
on 30 January 2015 (“Interface Deed”) in order to set out the arrangements for construction of the
NorthConnex Works and access to the M7 Motorway.
The Interface Deed contains usual provisions for documents of this kind, including obligations on
NorthConnex Project Company to undertake the NorthConnex Works in accordance with the
NorthConnex Project Deed, to provide WSO Co with opportunities to review and comment on design
documentation, construction plans and traffic management plans for the NorthConnex Works and to
provide adequate notice to, and cooperate with, WSO Co and RMS in relation to access and traffic
adjustments to the M7 Motorway.
NCX Project Company is also required to pay WSO Co certain fees for any traffic adjustment which
has not been agreed between the parties which causes a lane to be closed or any speed limit to be
decreased on the M7 Motorway.
Westlink M7 Deed of Waiver (Regear) 2016
53
Under this deed between RMS and the Westlink M7 Concessionaires (which is in the course of being
executed by RMS) on and from the later to occur of:
•
1 June 2016; and
•
the date on which the Westlink M7 Concessionaires provide to RMS a signed certificate
certifying that the aggregate amount of the NorthConnex Capital Contributions that have
been made is not less than $399 million,
RMS waives clause 31.4(c)(iv) (“No Consent Refinancing”) of the M7 Project Deed (which requires
the Westlink M7 Concessionaires to have spent 30% of the NorthConnex Capital Contributions
before undertaking any regearing).
If the Westlink M7 Concessionaires complete a Refinancing (as defined in the M7 Project Deed):
•
on or prior to 30 September 2016 and $630 million of the NorthConnex Capital Contributions
have not been made as at that date; or
•
after 30 September 2016 and $630 million of the NorthConnex Capital Contributions have
not been made as at the completion date of the Refinancing,
RMS can require that the Westlink M7 Concessionaires procure a letter of credit to be issued in
favour of RMS. The face amount of the Letter of Credit must be equal to the actual Shortfall Amount
as certified in the NCX Status Certificate which is provided by the Westlink M7 Concessionaires to
RMS on the issuance date of the letter of credit. Shortfall Amount is the amount by which $630
million exceeds the amount of NorthConnex Capital Contributions actually made at that time.
Until the date on which the Westlink M7 Concessionaires provide a final NCX status certificate to
RMS certifying that $630 million of the NorthConnex Capital Contributions have been made in
accordance with the NorthConnex Project Deed and the Shortfall Amount is zero, RMS can make a
demand under the letter of credit at any time up to 20 Business Days after termination of the
NorthConnex Project Deed and use the proceeds of the Letter of Credit to satisfy any liability of NCX
Project Company to RMS under certain clauses of the NorthConnex Project Deed.
Should any request be made by RMS to the Westlink M7 Concessionaires to provide a letter of credit
under the above regime, it is the intention of the Westlink M7 Concessionaires that they would
procure a letter of credit to be arranged by, and issued for the account of, a company in the NWRG
which is not a Security Provider under Westlink’s financing arrangements.
54
Security Arrangements
This section contains a summary of the Security Trust Deed dated 13 February 2003 (as amended
and restated on 31 January 2015) between, amongst others, the Issuer and the Security Trustee
(“Security Trust Deed”), the Security (as defined in the Security Trust Deed) (“Security”) and the
RMS Consent Deed (2014). It also provides a brief overview of the structure of the Finance
Documents. This summary is qualified in its entirety by reference to the provisions of the Notes, the
Security Trust Deed, the Security and the other documents described below.
Capitalised terms used in this section have the meaning given to them in the Security Trust Deed,
unless otherwise defined. Capitalised terms used in the section entitled “RMS Consent Deed” have
the meaning given in the Security Trust Deed or Project Deed, unless otherwise defined.
1
Overview
1.1
Security
The obligations of the Issuer under the Notes will be secured by:
(a)
all present and future assets and undertakings of:
(i)
the Issuer;
(ii)
WSO Co Pty Limited;
(iii)
Westlink Motorway Limited in its personal capacity and as nominee for the
Westlink Motorway Partnership;
(iv)
each partner in the Westlink Motorway Partnership being:
(A)
WSO Partnership Investment Company Pty Limited;
(B)
WSO Investment Management No.3 Pty Limited in its personal
capacity and as trustee of the Western Sydney Orbital Holding
Trust; and
(C)
Transurban Nominees Pty Limited in its personal capacity and as
trustee of the Transurban WSO Trust,
(individually a “Westlink Entity” and together, the “Westlink Entities”). The security
is granted in favour of the Security Trustee for itself and on behalf of the
Beneficiaries pursuant to the Westlink Entity Security Deed dated 13 February 2003
(as amended); and
(b)
all the shares and units and right, title and interest in the Subordinated Loan
Documents held by:
(i)
WSO Investment Holding Company Pty Limited;
(ii)
Transurban Nominees 2 Pty Limited in its personal capacity and as trustee
of the Transurban AL Trust;
(iii)
CARS Nominees (Australia) Pty Limited in its personal capacity and as
trustee of the Transurban CARS Trust; and
55
(iv)
WSO Investment Management No.1 Pty Limited in its personal capacity and
as trustee of WSO Partnership Investment Trust,
(individually an “Equity Party” and together, the “Equity Parties”). The security is
granted in favour of the Security Trustee for itself and on behalf of the Beneficiaries
pursuant to the Equity Party Security Deed dated 13 February 2003 (as amended).
The Westlink Entities and the Equity Parties, together, are referred to as the “Security
Providers”.
1.2
Security Trust Deed
The Security is held by the Security Trustee on and subject to the terms of the Security Trust
Deed.
By way of overview, the Security Trust Deed contains:
1.3
(a)
provisions which set out the terms on which the Security Trustee holds the Security
for the benefit of the Beneficiaries;
(b)
provisions for different Classes of Beneficiaries to appoint an agent or trustee as
their Representative for the purposes of the Security Trust Deed. The
Representative provides instructions to the Security Trustee and votes on behalf of
its Represented Beneficiaries in accordance with the terms of the Security Trust
Deed. For example, where the instructions or consent of Noteholders is required
under the Security Trust Deed, the Note Trustee appointed by the Noteholders (in its
capacity as Representative of the Noteholders) will seek Noteholders’ instructions
under the Note Documents and will vote those instructions in accordance with the
Security Trust Deed;
(c)
the terms on which Swap Counterparties are permitted to close-out and terminate
Hedging Contracts;
(d)
provisions that allow for the Note Trustee to become a party to the Security Trust
Deed as Representative of a Class of Noteholders. In that event, the Note Trustee
and the Noteholders represented by the Note Trustee will be recognised as secured
Beneficiaries without individual Noteholders being required to accede to the Security
Trust Deed; and
(e)
intercreditor and voting provisions, including in relation to providing instructions to
the Security Trustee to amend or waive a provision of the Security Trust Deed or the
rights of Beneficiaries to instruct the Security Trustee to enforce the Security.
Finance Documents
The other principal Finance Documents are:
(a)
Common Terms Deed
Each Security Provider and each bank lender (“Lender”) must be party to the
Common Terms Deed. The Common Terms Deed contains provisions applicable to
all current and any future loan facilities between the Issuer (in the capacity as
Borrower) and Lenders (see the section entitled “Facility Agreements” below). The
Common Terms Deed contains the representations and warranties and
56
undertakings given by the Security Providers for the benefit of all Lenders. It also
contains the events of default which Lenders have the benefit of.
Under the Common Terms Deed, all Lenders from time to time appoint the CTD
Agent as agent and as Representative of the Lenders for the purposes of the
Security Trust Deed. Under the Security Trust Deed, all Lenders that are
represented by the CTD Agent for the purposes of the Security Trust Deed are
recognised as Beneficiaries.
Only Lenders are party to the Common Terms Deed – Noteholders and Swap
Counterparties are not party to, and do not have the benefit of, the Common Terms
Deed.
(b)
Facility Agreements
The Issuer (in the capacity as Borrower) is a party to a syndicated facility agreement
dated 4 August 2014 (“Facility Agreement”). The Facility Agreement contains
provisions specific to the loans made available under the Facility Agreement.
Lenders under the Facility Agreement are party to the Common Terms Deed, are
represented under the Security Trust Deed by the CTD Agent and are Beneficiaries
under the Security Trust Deed.
Amounts borrowed under the Facility Agreement by the Issuer are on-lent to
Westlink. Westlink, in turn, has on-lent funds to WSO Co. The first on-lending
agreement between the Issuer and Westlink contains back-to-back repayment
provisions to ensure that the Issuer is always placed in funds in order to make
required payments under the Facility Agreement.
Lenders under any future bank debt facility agreement entered into by the Issuer
must become a party to the Common Terms Deed and will appoint the CTD Agent
as their Representative for the purposes of the Security Trust Deed. Any new
Lenders will also be Beneficiaries under the Security Trust Deed.
(c)
Hedging Contracts
The Issuer has entered into interest rate hedge transactions. These are documented
under an ISDA Master Agreement and Schedule (“Hedging Contract”) between the
Issuer and each Swap Counterparty. Each Swap Counterparty is a Beneficiary of
the Security and is a party to the Security Trust Deed. If, in future, a person that is
not otherwise a party to the Security Trust Deed in the capacity of Swap
Counterparty becomes a new Swap Counterparty, that person will accede and
become a party to the Security Trust Deed in the capacity of a Swap Counterparty
and will, in that capacity, become a Beneficiary of the Security.
2
Security
2.1
All asset security
Each Westlink Entity has granted security interests over its present and future assets and
undertakings. These security interests secure amounts which a Security Provider (including
the Issuer) is or at any time may become actually or contingently liable to pay to or for the
account of a Beneficiary (which will include a Noteholder) under or in connection with the
Finance Documents (which will include a Note).
These security interests are governed by New South Wales law.
57
2.2
Share and unit security
Each Equity Party has granted security interests over all the present and future shares and
units it holds in the Westlink Entities (“Shares”) and any debts owed by a Security Provider to
that Equity Party under the Subordinated Loan Documents (“Debts”).
Relevant Equity Parties have also granted featherweight security over all “Featherweight
Charged Property”, being all of that Equity Party’s assets and undertakings other than the
Shares and the Debts.
These security interests are governed by New South Wales law.
3
Guarantee
Under the terms of the Security Trust Deed, each Security Provider unconditionally and
irrevocably guarantees payment to each Beneficiary of the Secured Money. If a Security
Provider (including the Issuer) does not pay the Secured Money on time and in accordance
with the Finance Documents, then each other Security Provider agrees to pay the Secured
Money on demand from the Security Trustee. A demand may be made at any time and from
time to time and whether or not the Security Trustee has made demand on the Issuer.
4
Beneficiaries under the Security Trust Deed
4.1
Note Trustee and Noteholders
The Securities have been granted in favour of the Security Trustee, who holds them on trust
for the Beneficiaries in accordance with the terms of the Security Trust Deed. The Note
Trustee and the Security Trustee will execute an Accession Deed (Beneficiary) pursuant to
the Security Trust Deed under which the Note Trustee will be recognised as a Beneficiary
and as a Representative for the Noteholders for the purposes of the Security Trust Deed,
and the Notes will be recognised as Finance Documents for the purposes of the Security
Trust Deed.
Under the terms of the Security Trust Deed, the Noteholders will automatically be recognised
as Beneficiaries under the Security Trust Deed once the Note Trustee has been appointed
as their Representative for the purposes of the Security Trust Deed and the Note Trustee
has become a party to the Security Trust Deed by executing an Accession Deed
(Beneficiary), which the Security Trustee will countersign.
4.2
Other Beneficiaries
The other Beneficiaries under the Security Trust Deed include:
4.3
(a)
Lenders (and the Facility Agent appointed by those Lenders);
(b)
Swap Counterparties; and
(c)
the Account Bank, which holds each of the bank accounts described in the section
entitled “Project Accounts” below.
Majority Beneficiaries under the Security Trust Deed
The Security Trust Deed provides that the Security Trustee will, in exercising its rights under
the Securities and the Security Trust Deed, generally act in accordance with the instructions
of the Majority Beneficiaries. This is subject to the matters set out in the sections entitled
58
“Unanimous requirements under the Security Trust Deed” and “Enforcement and
acceleration provisions” below.
Under the Security Trust Deed, “Majority Beneficiaries” means those Beneficiaries whose
total Exposures are at least two thirds of the Exposures of all Beneficiaries.
Under the Security Trust Deed, “Exposure” means:
4.4
(a)
in the case of the Security Trustee, the Facility Agent or a Representative (other than
a Swap Counterparty), the Secured Money which the Issuer or a Security Provider is
at that time actually or contingently liable to pay to or for the account of it (but not
Secured Money payable to it for the account of any other Beneficiary or in any other
capacity);
(b)
in the case of a Lender, the undrawn Commitment of that Lender plus the amount of
that Lender's participation in the total principal amount outstanding of any Loans plus
any accrued but unpaid fees and interest;
(c)
in the case of a Swap Counterparty:
(i)
if an Event of Default is subsisting, or for the purposes of any indemnity
provided to the Security Trustee, that Swap Counterparty's Realised Swap
Loss (where its Hedging Contract has been terminated) or its Potential
Close-Out Amount (where its Hedging Contract has not been terminated); or
(ii)
in all other instances, nil;
(d)
in relation to a Noteholder, the aggregate principal amount that would be payable if
all of the relevant Notes issued to that Noteholder were redeemed at that time,
together with accrued but unpaid interest under the Notes; or
(e)
in relation to a New Beneficiary (other than a Lender, a Swap Counterparty or a
Noteholder), the total of all amounts due for payment, or which will or may become
due for payment, in connection with any relevant Finance Document (including any
transactions contemplated by it) to that New Beneficiary (or the Security Trustee,
Facility Agent or its Representative on account of that New Beneficiary) other than
amounts payable to that New Beneficiary on account of another Beneficiary or in any
other capacity.
Unanimous voting requirements under the Security Trust Deed
(a)
Under the terms of the Security Trust Deed, the Security Trustee must act on the
instructions of all Beneficiaries (or all Beneficiaries which are affected by the relevant
circumstances) in relation to certain amendments to or waivers or releases under the
Security Trust Deed, including:
(i)
the Security Trustee must not amend or vary the Security Trust Deed or a
Security, or grant a waiver or release under the Security Trust Deed or a
Security, if it would:
(A)
increase the obligations or Exposure of any Beneficiary without the
consent of that Beneficiary;
59
(ii)
(B)
change the date, amount, currency, priority or order of payment to
any Beneficiary without the consent of that Beneficiary; or
(C)
discharge or release any Guarantee or Security Interest existing for
the benefit of a Beneficiary, without the consent of that Beneficiary,
unless required by law or to permit a transaction that complies with
the Finance Documents; and
the Security Trustee must not vary the terms in the Security Trust Deed
relating to, among other things, mandatory prepayment (as described in the
section entitled “Mandatory prepayments” below), distribution of amounts
from the Proceeds Accounts (as described in the section entitled
“Distribution of recovered moneys” below) or acceleration and enforcement
(as described in the section entitled “Enforcement and acceleration
provisions” below), without the consent of all Beneficiaries.
(b)
If, under the terms of the Security Trust Deed, the Security Trustee is required to
seek the instructions of all Beneficiaries or all of a group or class of Beneficiaries
which includes all Noteholders (as the case may be), the Security Trustee will act on
the instructions of the Note Trustee as the Representative of the Noteholders for the
purposes of the Security Trust Deed. The relevant voting thresholds and procedures
for the Noteholders to provide instructions to the Note Trustee for the purposes of
voting under the Security Trust Deed will be set out in the Note Trust Deed (and also
see the section entitled “Other voting by Noteholders” below).
(c)
The Note Trust Deed will provide that, where the Security Trust Deed provides that a
matter must be determined, or may only be approved, waived or otherwise
consented to, by all the Beneficiaries or all of a group or class of Beneficiaries which
includes all the Noteholders (as applicable), then that matter will be taken to have
been determined, approved, waived or otherwise consented to by all the
Noteholders if it is passed by way of an Extraordinary Resolution. However, this will
not apply to:
(d)
(i)
any matter which, under the Note Trust Deed, is required to be passed by a
Special Quorum Resolution (see paragraph (d) below); or
(ii)
any “Excluded Matter” as defined in Note Trust Deed (see paragraph (e)
below). In respect of such Excluded Matters, the instructions of all
Noteholders will be required.
Those matters which will, pursuant to the Note Trust Deed, require the approval of
the Note Trustee acting on the instructions of the Noteholders passed by way of a
Special Quorum Resolution include:
(i)
the compromise of the rights of any Noteholders against the Issuer under
the Note Documents;
(ii)
the exchange or substitution of any Notes for, or the conversion of those
Notes into, other debt or equity securities or other obligations, other than an
exchange, substitution or conversion which is expressly provided for in the
Note Documents;
(iii)
a variation of the date on which any payment is due on any Notes, other
than a variation which is expressly provided for in the Note Documents;
60
(e)
(iv)
a variation of the amount of any payment in respect of the Notes or a
variation to the method of calculating such an amount, in each case, other
than a variation which is expressly provided for in the Note Documents;
(v)
a variation of the due currency of any payment in respect of the Notes;
(vi)
the authorisation of any person to do anything necessary to give effect to a
Special Quorum Resolution of Noteholders;
(vii)
the conferral on any committee appointed to represent the interests of the
Noteholders of any rights in relation to matters that require a Special
Quorum Resolution;
(viii)
a variation of the definition of Extraordinary Resolution or Special Quorum
Resolution;
(ix)
a variation of the quorum required to pass any resolution at any meeting of
Noteholders;
(x)
a variation of certain provisions in the Note Trust Deed dealing with voting;
(xi)
the exercise of any right under a Note Document or any other matter that
expressly requires a Special Quorum Resolution.
The “Excluded Matters” under the Note Trust Deed include the following:
(i)
an amendment or variation to the Security Trust Deed or a Security or the
grant of a waiver or release under the Security Trust Deed or a Security if it
would:
(A)
increase the obligations or Exposure of any Beneficiary without the
consent of that Beneficiary;
(B)
change the date, amount, currency, priority or order of payment to
any Beneficiary without the consent of that Beneficiary;
(C)
change:
(D)
4.5
(aa)
clause 11.5(b) of the Security Trust Deed, which relates to
amendments and waivers; or
(ab)
the definitions of “Beneficiary”, “Exposure”, “Event of
Default”, “Majority Beneficiaries”, “Majority Noteholders” or
“Secured Money” in the Security Trust Deed; or
change any requirement for the agreement or instructions of all or a
specified majority of Beneficiaries (or any category of them) to be
obtained, without the consent of each Beneficiary entitled to be
counted in determining whether that requirement is satisfied.
Procedures for seeking instructions
Under the Security Trust Deed, when seeking instructions from the Beneficiaries (or, in the
case of a Represented Beneficiary, its Representative (for example, the Note Trustee as
Representative of the Noteholders)), the Security Trustee may specify in writing a reasonable
61
period within which instructions are to be provided, which, unless the approval, consent or
determination is required urgently, will take into account the time and any requirements
under the relevant Finance Documents for a Representative of Represented Beneficiaries
(for example the Note Trustee) to convene and hold meetings in order to obtain instructions.
The period will be:
(a)
in the case of seeking instructions for a Fundamental Event of Default or the
commencement of enforcement action as a result of the appointment of an
administrator to the Issuer or a Security Provider, at least 5 Business Days but not
more than 10 Business Days (or such shorter period as necessary for the purposes
of requiring instructions to be provided before the end of the “decision period” under
and as defined in the Corporations Act); or
(b)
in the case of any other instructions, at least 10 Business Days (or such longer
period as the Security Trustee deems necessary taking into account the timing
considerations relevant to the matters requiring determination as described in the
section entitled “Enforcement and acceleration provisions” below).
If a Beneficiary (or, where applicable, its Representative) does not provide instructions in
writing within the period specified by the Security Trustee, it will be deemed (for the purpose
of determining the applicable instructions only) to have an Exposure of zero.
In determining whether a group of Represented Beneficiaries (for example, a Class of
Noteholders) is in favour of, or against, a matter requiring determination and instructions to
be given to the Security Trustee, the Representative of those Beneficiaries will vote the entire
Exposure of the Represented Beneficiaries as a block if the relevant majority of the
Represented Beneficiaries (as specified under the terms of the Finance Documents to which
those Beneficiaries are party (for example, the Note Documents)) have voted in favour of or
against that decision. The exception to block voting is in relation to instructing the Security
Trustee to commence enforcement action where a Fundamental Event of Default is
subsisting. In that event, a Representative is required to instruct the Security Trustee
according to the Exposure and actual votes of the Represented Beneficiaries who have
voted for and against the relevant matter.
4.6
Other voting by Noteholders
If, under the terms of the Security Trust Deed, the Security Trustee is required to seek the
instructions of the Majority Noteholders or a relevant majority of the Noteholders (as the case
may be), the Security Trustee will act on the instructions of the Note Trustee as the
Representative of the Noteholders for the purposes of the Security Trust Deed.
Under the terms of the Note Trust Deed, unless the matter requiring determination under the
Security Trust Deed is one which:
(a)
must be approved by Noteholders who are entitled to vote by way of an
Extraordinary Resolution or Special Quorum Resolution, respectively (see also the
section entitled “Unanimous voting requirements under the Security Trust Deed”
above); or
(b)
must be approved by another relevant threshold of Noteholders (for example, see
Condition 12.2(c) in relation to acceleration of the Notes and providing instructions to
the Security Trustee on certain enforcement action),
62
then the Note Trustee will act on the instructions of the Noteholders passed by way of an
Ordinary Resolution.
4.7
Determinations by the Security Trustee
In order to determine, among other things, the amount and Share of any money to be
distributed to the Beneficiaries (or their Representatives) under the Security Trust Deed or
the Exposure of the Beneficiaries from time to time, the Security Trustee will request that the
Beneficiaries (or their Representatives) provide a written statement to the Security Trustee
setting out the aggregate amount and details of the Secured Money owing to the
Beneficiaries. The Security Trustee is entitled to rely on such statements as evidence of the
Secured Money and Exposure of the Beneficiaries as at the time of the statements and to
use the statements to calculate and determine which Beneficiaries at that time comprise the
Majority Beneficiaries or the majority of a relevant Class of Beneficiaries.
5
Distribution of moneys recovered by the Security Trustee
5.1
Sharing of recovered moneys pre-enforcement
If, before the Enforcement Date and in accordance with the terms of the relevant Finance
Documents, a Beneficiary (or in the case of a Represented Beneficiary, its Representative)
directs the Security Trustee to demand payment from a Security Provider of Secured Money
which is then due and payable to that Beneficiary, the Security Trustee must promptly make
that demand and the Security Provider must immediately pay the amount demanded by the
Security Trustee. On receipt of any money from that Security Provider, the Security Trustee
holds it on trust for the Beneficiary who made the request and must pay the full amount
received to that Beneficiary (or, if applicable, its Representative) or as otherwise required by
a Finance Document.
On sharing of payments, see further the sections entitled “Enforcement Date, Enforcement
Right and sharing provisions” and “Proposed Amendments to the Security Trust Deed”
below.
5.2
Sharing of recovered moneys post enforcement
Under the Security Trust Deed, the Security Trustee, Controller or Attorney will apply all
money received or recovered by it after the Enforcement Date in the following order of
priority:
(a)
first: in payment of amounts that have priority at law;
(b)
second: in payment of:
(i)
all costs, fees, charges and expenses of the Security Trustee, Controller or
Attorney incurred in or incidental to the exercise or performance or
attempted exercise or performance of any power under the Finance
Documents; or
(ii)
any amount paid pursuant to any indemnity provided by any of the
Beneficiaries to the Security Trustee,
plus any interest which has accrued with respect to such amounts calculated in
accordance with the applicable Finance Documents;
(c)
third: in payment of any other outgoings due and payable in respect of the Security
Providers that the Security Trustee, Controller or Attorney thinks fit to pay;
63
(d)
fourth: in payment to the Controller of its remuneration;
(e)
fifth: in payment and discharge, in the order of their priority, of any Security Interest
of which the Security Trustee, Controller or Attorney has actual knowledge and
which has priority to the relevant Security to the extent of that priority;
(f)
sixth: in or towards payment or repayment to each Beneficiary of its Share of the
Secured Money until each Beneficiary has received its Secured Money in full, in the
following order of priority:
(i)
toward reimbursement of out-of-pocket costs, charges, duties and expenses
of any Representative (other than a Swap Counterparty);
(ii)
toward payment of interest and payment of any amount which is in the
nature of interest payable under or in connection with a Hedging Contract;
(iii)
toward payment of principal (including any Potential Close-out Amount and
Realised Swap Loss under a Hedging Contract); and
(iv)
toward payment of any other Secured Money then owing to a Beneficiary,
in each case, rateably among the relevant Beneficiaries owed such amounts under
each sub-paragraph above, or in such other order of priority or on such other basis
as may be agreed by all the Beneficiaries;
(g)
seventh: in payment of (and only to the extent required by law and in order of their
priority) other Security Interests of which the Security Trustee, Controller or Attorney
has actual knowledge and which are due and payable in accordance with their
terms; and
(h)
eighth: in payment of the surplus, if any, and without interest, to the Issuer and the
Security Providers.
Payments to the Noteholders will be paid to the relevant Note Trustee who will distribute
such amounts to the Noteholders in accordance with the Note Documents.
On sharing of payments, see further the sections entitled “Enforcement Date, Enforcement
Right and sharing provisions” and “Proposed Amendments to the Security Trust Deed”
below.
5.3
Indemnity to the Security Trustee
Under the Security Trust Deed, the Security Trustee is entitled to be indemnified out of any
money received by the Security Trustee under the Securities or otherwise forming part of the
Trust Fund for all liabilities and expenses incurred by it in the exercise or purported exercise
of its powers under the Finance Documents, all actions, proceedings, costs, claims and
demands arising in relation to the Finance Documents and amounts for which the Security
Trustee is entitled to be indemnified under the Finance Documents.
This indemnity does not apply:
(a)
where the Security Trustee or any of its Authorised Officers, agents, delegates or
employees (excluding any Controller appointed by it) is guilty of fraud, Wilful Default
or gross negligence; or
64
(b)
to the extent that any Beneficiary under the Security Trust Deed is actually owed any
sum in respect of a claim against the Security Trustee in accordance with any
Finance Document to which the Security Trustee is a party.
If there is no money available to indemnify the Security Trustee, then each Beneficiary
severally and rateably according to its Exposure at that time indemnifies the Security Trustee
against that amount and must pay its share to the Security Trustee within 3 Business Days of
demand.
The Note Trustee is only obliged to indemnify the Security Trustee if and to the extent that it
retains amounts for and on behalf of the Noteholders or has distributed them to the
Noteholders and can and does recover them from the Noteholders.
5.4
Security Trustee’s limitation of liability
Under the Security Trust Deed, the Security Trustee, its directors, Authorised Officers,
employees, agents, successors or attorneys are not liable to any Beneficiary for a broad
range of matters. These matters include (but are not limited to):
(a)
any loss or damage occurring as a result of it exercising, failing to exercise or
purporting to exercise any of its powers under the Security Trust Deed or in relation
to a Finance Document;
(b)
any other matter or thing done, or not done, by it in relation to the Security Trust
Deed and the other Finance Documents;
(c)
the financial condition or solvency of a Security Provider;
(d)
any statement, representation or warranty of a Security Provider being incorrect or
misleading in any respect; or
(e)
acting on any written communication, notice or other document containing a
direction or instructions purporting to have been given by the Beneficiaries which the
Security Trustee believes to be genuine and correct and to have been signed by, or
sent by or on behalf of, the proper person,
provided that the Security Trustee and its agents, delegates, Authorised Officers and
employees have acted reasonably in all the circumstances and have not been guilty of fraud,
Wilful Default or gross negligence.
6
Enforcement and acceleration provisions
The Security Trust Deed contains a mechanism which regulates the taking of enforcement
action by the Security Trustee and also acceleration of amounts owing to the Beneficiaries
under the Finance Documents. The key principles of the mechanism are described below.
6.1
Acceleration
Each Beneficiary or requisite number of Beneficiaries specified in the applicable Finance
Document is entitled at all times to:
(a)
exercise any right of acceleration under its Finance Documents;
(b)
vote and give instructions or directions to the Security Trustee as otherwise
contemplated by the Security Trust Deed;
65
6.2
(c)
receive amounts it would otherwise be entitled to receive under the Finance
Documents; and
(d)
subject to the matters above, otherwise exercise any rights it may have against a
Security Provider.
Notices
(a)
Each Beneficiary (or in the case of a Represented Beneficiary, its Representative)
must notify the Security Trustee immediately upon becoming aware (or in the case
of a Representative has received actual notice) of the occurrence of a Fundamental
Event of Default that is subsisting (a “Fundamental Default Notice”) unless such
Beneficiary or Representative is actually aware that the Security Trustee has already
received a Fundamental Default Notice with respect to such Fundamental Event of
Default.
(b)
If a Non Fundamental Event of Default occurs under the Finance Documents and
the Requisite Majority (being the Majority Lenders or the Majority Noteholders, as
applicable, under the Finance Document under which the Event of Default has
occurred) have determined under the relevant Finance Documents to accelerate
amounts owing to them, their Representative must issue a notice to the Security
Trustee (a “Non Fundamental Default Notice”) at the time of acceleration under
the relevant Finance Documents.
The “Majority Noteholders” means, in respect of a Class of Noteholders, those
Noteholders who constitute a majority of all of the Noteholders in that Class as
determined pursuant to the relevant Note Documents. In this context of acceleration
of amounts owing to Noteholders, see Condition 12.2(c) in relation to the relevant
voting threshold of Noteholders which will constitute the “Majority Noteholders”.
6.3
(c)
A “Default Notice” (being either a Fundamental Default Notice or a Non
Fundamental Default Notice) must specify the relevant Event of Default and
reasonable details of the circumstances giving rise to it.
(d)
Upon receipt of a Default Notice, the Security Trustee must as soon as practicable
(but within two Business Days) deliver a copy of the Default Notice to each
Beneficiary (or in the case of a Represented Beneficiary, its Representative), the
Issuer and each Security Provider.
Fundamental Event of Default and Non Fundamental Event of Default
A “Fundamental Event of Default” is defined in the Security Trust Deed as:
(a)
a payment default by the Issuer or a Security Provider under a Finance Document
(subject to any applicable grace period under the Finance Document);
(b)
an Insolvency Event which occurs in relation to the Issuer or a Security Provider
(other than in circumstances where an administrator has been appointed to the
Issuer or a Security Provider);
(c)
the Project is abandoned and that abandonment continues for 90 consecutive days;
or
(d)
the Security Trustee receives a notice of proposed termination of the Project Deed
under the RMS Consent Deed.
66
A “Non Fundamental Event of Default” means any “event of default” (howsoever defined or
described under a Finance Document) which is not a Fundamental Event of Default.
6.4
6.5
Enforcement
(a)
A Beneficiary must not, without the prior written consent of the Security Trustee
acting on the instructions of the Majority Beneficiaries, take enforcement action.
(b)
Following receipt of a Default Notice, the Majority Beneficiaries may instruct the
Security Trustee to take enforcement action.
(c)
If at any time an administrator is appointed to the Issuer or a Security Provider, a
Requisite Majority (being the Majority Lenders or the Majority Noteholders, as
applicable, under the Finance Document under which the Event of Default has
occurred) may instruct the Security Trustee to take enforcement action (and, if so
instructed, the Security Trustee must take such enforcement action). In this context
of instructing the Security Trustee if an administrator is appointed, see Condition
12.2(c) in relation to the relevant voting threshold of Noteholders which will constitute
the “Majority Noteholders”.
(d)
Other than where paragraph (c) applies, if a Default Notice relates to a Fundamental
Event of Default, then at any time the relevant Fundamental Event of Default is
subsisting, a FD Reduced Majority (being those Beneficiaries whose total Exposures
are at least one third of the total Exposures of all Beneficiaries) may instruct the
Security Trustee to take enforcement action (and, if so instructed, the Security
Trustee must take such enforcement action).
(e)
If the Security Trustee has received a Default Notice in relation to a Non
Fundamental Event of Default and that default is subsisting for 60 days after the
date the Security Trustee received the relevant Default Notice and the Majority
Beneficiaries have not otherwise instructed the Security Trustee to take enforcement
action (see paragraph (b) above), a Reduced Majority (being those Beneficiaries
whose total Exposures are at least one half of the total Exposures of all
Beneficiaries) may instruct the Security Trustee to take enforcement action (and, if
so instructed, the Security Trustee must take such enforcement action).
(f)
The Majority Beneficiaries cannot give a direction or instruction to the Security
Trustee overriding or preventing the implementation of any instruction given by a
Requisite Majority, FD Reduced Majority or Reduced Majority (as applicable) in
accordance with the above terms.
Enforcement Date, Enforcement Right and sharing provisions
The Security Trustee is required to share all moneys it receives under the Finance
Documents on or after the Enforcement Date as described in the section above entitled
“Sharing of recovered moneys post enforcement” (“Post Enforcement Sharing
Provisions”).
The “Enforcement Date” is defined under the Security Trust Deed as the date on which the
Security Trustee appoints a Controller under a Security or otherwise exercises an
Enforcement Right (whichever is earlier). “Enforcement Right” is defined in the Security
Trust Deed as any enforcement right under or in respect of a Security.
As noted in the section entitled “Acceleration” above, at all times a Beneficiary or Class of
Beneficiaries remain entitled to exercise a right of acceleration under the Finance
67
Documents to which it is a party. If, for example, an Event of Default occurred under (and as
defined in) the Common Terms Deed, the Majority Lenders have the right to accelerate the
Secured Money owing to the Lenders. The decision by a Beneficiary or Class of Beneficiaries
to accelerate the Secured Money owing to them does not, of itself, constitute the exercise of
an Enforcement Right.
Accordingly, if a Beneficiary or Class of Beneficiaries accelerates the Secured Money owing
to them in accordance with the Finance Documents, this will not of itself:
(a)
entitle the Security Trustee to exercise its Enforcement Rights, as the Security Trust
Deed sets out a regime for Beneficiaries to vote and instruct the Security Trustee to
exercise its Enforcement Rights (see the section entitled “Enforcement” above); or
(b)
trigger the Enforcement Date and the Post Enforcement Sharing Provisions,
Therefore, under the Security Trust Deed and the other Finance Documents, a Beneficiary or
relevant Class of Beneficiaries may be entitled to accelerate and receive the Secured Money
owing to it in circumstances where the Security Trustee has not exercised its Enforcement
Rights. In that event, a Beneficiary or relevant Class of Beneficiaries that has received
Secured Money owing to it will be entitled to retain that money and will not be subject to the
Post Enforcement Sharing Provisions.
In relation to the sharing provisions under the Security Trust Deed, see further the section
entitled “Proposed amendments to the Security Trust Deed” below.
7
Mandatory prepayments
7.1
Mandatory prepayments
Under the terms of the Security Trust Deed, the Issuer must apply the following amounts in
prepayment of all or part of the Secured Money then actually or contingently owing to the
Beneficiaries at the times specified below:
(a)
Lock Up Cash Sweep: If a Lock Up Event exists on two consecutive Calculation
Dates, 100% of Available Cash on:
(i)
the second Calculation Date; and
(ii)
each subsequent Calculation Date on which a Lock Up Event subsists until
the Lock Up Event ceases to subsist.
“Lock Up Event” means that, on any quarterly Calculation Date, the DSCR for the
12 month period ending on that Calculation Date is less than 1.30:1.
“Available Cash” means the cash remaining in the Proceeds Accounts at the end of
the most recent calendar quarter after all payments of higher priority than transfers
to the Distribution Accounts up to and including the last day of the calendar quarter
have been made (see the section entitled “Proceeds Accounts – Withdrawals”
below).
(b)
Insurance Proceeds: All amounts required by the Security Trustee to be paid in
reduction of the Secured Money in accordance with the RMS Consent Deed (see the
section entitled “RMS Consent Deed” below).
68
(c)
Payments under the Project Deed: Any payments to Westlink or WSO Co under
the Project Deed, except to the extent that the payment is a reimbursement by RMS
arising from a RMS directed Change (as defined in the Project Deed) which was not
either funded from the proceeds of the Finance Documents or otherwise agreed to
have been funded from previous facilities or is a payment by RMS under clause 19
(“Material Adverse Effect”) of the Project Deed.
(d)
Permitted disposals: The proceeds of:
(i)
a disposal of assets for fair value which are no longer required for the
Project or which are being replaced in accordance with Good Operating
Practice; or
(ii)
a disposal of assets subject to a floating charge in the ordinary course of
day-to-day trading at arm’s length,
except where:
(e)
7.2
(iii)
the proceeds of that disposal are used to purchase replacement assets for
the assets disposed of; or
(iv)
the net proceeds of the assets disposed of are less than A$1,000,000 either
individually or in aggregate in any successive period of 12 months (with the
first period beginning on 4 August 2014).
Equity Cure: The amount of any additional capital contributed by way of the
subscription and/or issue of ordinary trust units, company shares or Approved
Subordinated Debt to the Issuer for the purposes of preventing or curing any Event
of Default in relation to the DSCR or any other financial covenant which may be
agreed under a Finance Document from time to time.
Distribution of mandatory prepayments
(a)
All mandatory prepayments are made to the Security Trustee (or paid into a
Mandatory Prepayment Account, in respect of which the Security Trustee’s
Authorised Officers will be the sole signatories). Upon receipt by the Security
Trustee of the mandatory prepayment (or upon withdrawal by the Security Trustee
from the Mandatory Prepayment Account), that amount will be paid by the Security
Trustee on a pari passu and pro-rata basis to each Beneficiary (or, in the case of a
Represented Beneficiary, its Representative). The amount paid by the Security
Trustee to each Representative is for the benefit of the relevant Represented
Beneficiaries only and is not for the benefit of any other Beneficiary. The relevant
Representative will then distribute mandatory prepayment amounts in accordance
with the Finance Documents under which the Representative was appointed.
(b)
Under the terms of the existing Hedging Contracts, where a repayment or
prepayment of Finance Debt is made and this results in the notional amount of
outstanding interest rate swap transactions exceeding the total principal amount of
Finance Debt that will be outstanding immediately after that repayment or
prepayment occurs, the Issuer may notify each relevant Swap Counterparty that it is
required to terminate or amend the terms of relevant interest rate swap transactions
in order to comply with the interest rate hedging requirements under the Finance
Documents. Termination or amendment to the terms of interest rate swap
transactions will occur in accordance with the terms of the Hedging Contracts. In this
event, the amount distributed in mandatory prepayments described in paragraph (a)
69
will include an amount to pay relevant termination amounts to the Swap
Counterparties; otherwise, the amount distributed in mandatory prepayments
described in paragraph (a) is not required to be paid to a Swap Counterparty.
In relation to the distribution of mandatory prepayment amounts for the account of the
Noteholders, see further the section entitled “mandatory prepayment account” below.
8
Project Accounts
8.1
Project Accounts
Under the Security Trust Deed, the Issuer and the relevant Security Providers maintain (or, in
the relevant circumstances will be required to maintain in the future) the following Project
Accounts with the Account Bank:
8.2
(a)
Proceeds Accounts;
(b)
Major Capital Maintenance Reserve Account;
(c)
Insurance Proceeds Accounts;
(d)
Distribution Accounts;
(e)
Mandatory Prepayment Account;
(f)
Heavy Vehicle Toll Uplift Account; and
(g)
(if required in future) Income Tax Account.
Proceeds Accounts - Payments
Under the terms of the Security Trust Deed, each of WSO Co and Westlink must ensure that
the following is paid directly to the relevant Proceeds Account:
(a)
all Revenue and any other amounts received by a Westlink Entity in respect of the
Project (other than amounts payable to the Insurance Proceeds Account);
(b)
all proceeds of any Finance Debt or other amounts raised by way of equity or capital;
and
(c)
any net amounts payable to it pursuant to a Hedging Contract.
Prior to completion of the note issuance which is the subject of this Information
memorandum, it is proposed that paragraph (b) above will be amended such that Finance
Debt incurred by the Issuer will not be required to be paid into the Proceeds Account in
circumstances where the Issuer has directed that the Finance Debt be applied in repayment
of other existing Finance Debt, interest rate hedging termination amounts and/or other
purposes approved by the providers of the Finance Debt or otherwise permitted or required
pursuant to the terms of the Finance Documents (in each case, as notified to the Security
Trustee).
8.3
Proceeds Accounts - Withdrawals
Each of WSO Co and Westlink may make withdrawals from its Proceeds Account to pay the
following amounts when due and in the following order of priority:
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(a)
Operating Costs (excluding Taxes that are payable in accordance with the Equity
Subscription Agreement from amounts credited to the Income Tax Account (see the
section entitled “Income Tax Account” below));
(b)
Major Capital Maintenance costs;
(c)
Transaction Costs then payable;
(d)
fees, costs and expenses due and payable to a Beneficiary under a Finance
Document;
(e)
interest costs due and payable under the Finance Documents and payments (other
than any termination payments) due and payable under the Hedging Contracts;
(f)
on a pari passu and pro rata basis, scheduled repayments of principal due and
payable under the Finance Documents and any termination payments due under the
Hedging Contracts;
(g)
on a pari passu and pro rata basis, any other Secured Money then due to the
Beneficiaries (excluding mandatory prepayments described in the section entitled
“Mandatory prepayments” above);
(h)
amounts required to be transferred to the Major Maintenance Reserve Account (see
the section entitled “Major Maintenance Reserve Account” below);
(i)
mandatory prepayments (as described in the section entitled “Mandatory
prepayments” above) or transfers of amounts to be applied in mandatory
prepayment to a Mandatory Prepayment Account (as described in the section
entitled “Distribution of mandatory prepayments” above) (and any termination
payments due under the Hedging Contracts as a consequence of that prepayment);
(j)
amounts required to be paid into the Heavy Vehicle Toll Uplift Account in accordance
with the Project Deed and the section below entitled “Heavy Vehicle Toll Uplift
Account” (provided that the conditions set out in the section below entitled
“Distribution Conditions” have been met);
(k)
any voluntary prepayments under a Finance Document (and any termination
payments due under the Hedging Contracts as a consequence of that prepayment);
and
(l)
payments or distributions to a Distributions Account (described below) provided that
the distribution conditions described in the section entitled “Distribution conditions”
below have been satisfied.
In applying the order of priority above, the balances of the Proceeds Account are notionally
aggregated, so that payments are made in the same order as if there was a single Proceeds
Account. No other withdrawals or transfers from a Proceeds Account (other than transfers
between each Proceeds Account) is permitted.
8.4
Major Capital Maintenance Reserve Account
WSO Co maintains the Major Capital Maintenance Reserve Account. The Major Capital
Maintenance Reserve Account is operated on terms that only Authorised Officers of the
Security Trustee may authorise withdrawals or transfers from the account. Those Authorised
Officers are the sole signatories to the Major Capital Maintenance Reserve Account. The
71
Authorised Officers of the Security Trustee shall effect withdrawals or transfers from the
Major Capital Maintenance Reserve Account as described below (unless an Event of Default
is subsisting and it is so instructed by the Beneficiaries) and no withdrawal or transfer from
the Major Capital Maintenance Reserve Account may be made except as set out below.
(a)
Payments to the Major Capital Maintenance Reserve Account
(i)
The balance of the Major Capital Maintenance Reserve Account must, on
each Calculation Date, be an amount equal to or greater than:
(A)
two-thirds of the budgeted Major Capital Maintenance expenditure
for the following 12 months (“Period 1”) where the total budgeted
amount for Period 1 exceeds A$5,000,000; and
(B)
one-third of the budgeted Major Capital Maintenance expenditure
for the 12 month period beginning at the end of Period 1 (“Period
2”) where the total budgeted amount for Period 2 exceeds
A$5,000,000,
(together, the “MCMRA Minimum Balance”).
(b)
(ii)
If, at any Calculation Date, the balance of the Major Capital Maintenance
Reserve Account is less than the required MCMRA Minimum Balance at
that time, then an amount equal to the difference must be transferred from
the Proceeds Accounts to the Major Capital Maintenance Reserve Account.
(iii)
The MCMRA Minimum Balance must be retained in the Major Capital
Maintenance Reserve Account until paragraph (b) below applies.
Application of amounts credited to the Major Maintenance Reserve Account
Amounts may only be transferred from the Major Capital Maintenance Reserve
Account for payment of the Major Capital Maintenance costs for which they have
been reserved when required to pay those costs. On request from WSO Co, the
Security Trustee must transfer such amounts to make required payments.
(c)
Transfer of excess amounts in the Major Maintenance Reserve Account
Subject to paragraph (b) above, if on a Calculation Date the balance of the Major
Capital Maintenance Reserve Account exceeds the required MCMRA Minimum
Balance at that time, the amount of the excess must be transferred by the Security
Trustee to a Proceeds Account.
In relation to the Major Maintenance Reserve Account, see further the section entitled
“Proposed amendments to the Security Trust Deed” below.
8.5
Insurance Proceeds Accounts
Each of WSO Co and Westlink maintain an Insurance Proceeds Account. The Authorised
Officers of the Security Trustee may authorise withdrawals or transfers from each Insurance
Proceeds Account and are the sole signatories to the Insurance Proceeds Account.
(a)
Payments to the Insurance Proceeds Accounts
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Subject to the terms of the RMS Consent Deed (see the section entitled “RMS
Consent Deed” below), Westlink and WSO Co shall each ensure that:
(i)
all claims proceeds in respect of insurance policies (other than business
interruption insurance, and other than amounts applied to reimburse claims
made by third parties); and
(ii)
any returns of premiums,
that are made to it are paid directly into its respective Insurance Proceeds Account.
(b)
Withdrawals from the Insurance Proceeds Accounts
Amounts may only be withdrawn or transferred from an Insurance Proceeds
Account:
8.6
(i)
where clause 7.2 (“Application of Insurance Proceeds”) of the RMS Consent
Deed applies and in accordance with that clause;
(ii)
where a mandatory prepayment of insurance proceeds applies, in
accordance with section 7.1(b) “Insurance Proceeds” above;
(iii)
where the proceeds are intended to reimburse claims made by third parties,
in reimbursing those claims; and
(iv)
otherwise:
(A)
if no Event of Default is subsisting, in respect of the loss or damage
to which the proceeds were received; or
(B)
if an Event of Default is subsisting, towards payment of the Secured
Money or otherwise as the Security Trustee directs (acting on the
instructions of the Majority Beneficiaries).
Distribution Accounts
Each of WSO Co and Westlink maintains a Distribution Account. An Authorised Officer of
WSO Co or Westlink (as the case may be) may authorise all withdrawals or transfers from its
respective Distribution Account for the purpose of making distributions (including by way of
management or other fee, interest, dividend, return of capital, repayment or redemption) or
payments in respect of Approved Subordinated Debt (a “Distribution”).
8.7
Mandatory prepayment account
(a)
If, at any time, an amount is required to be applied in mandatory prepayment (see
the section entitled “Mandatory prepayments” above) and that mandatory
prepayment is required to be made on a day that is not the last day of a funding
period or interest period, the Issuer may open an account in its name with the
Account Bank and which is styled “WSO Finance – Mandatory Prepayment
Account”. The Issuer must notify the Security Trustee in writing at the time it
determines to open a Mandatory Prepayment Account. The Security Trustee must
withdraw amounts credited to the Mandatory Prepayment Account as described in
the section entitled “Distribution of mandatory prepayments” above.
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(b)
8.8
The Security Trust Deed also contemplates that the Issuer and a Note Trustee (as
the Representative of a Class of Noteholders) may agree, under the terms of the
relevant Note Documents, to open a prepayment account held in the name of the
Note Trustee. In that case, the Issuer and Note Trustee must notify the Security
Trustee and the Security Trustee must distribute the share of any mandatory
prepayments due to the Class of Noteholders to the prepayment account held by the
Note Trustee. The Note Trustee must then distribute those amounts to its
represented Class of Noteholders.
Income Tax Account
If, at any time, the Issuer receives a Tax Assessment, then it must promptly (and in any
event not later than 5 Business Days prior to the Assessed Tax Liability Payment Date
specified in the first Tax Assessment the Issuer receives) establish in its name an account
styled “Income Tax Account (WSO Finance)” (the “Income Tax Account”).
The Income Tax Account must be operated on terms that an Authorised Officer of the Issuer
may authorise all withdrawals or transfers from the Income Tax Account which are in
accordance with the following.
(a)
Payments to the Income Tax Account
The Issuer must ensure that all Subscription Amounts it receives from the Westlink
Partners in consideration for the issue and allotment of shares by the Issuer to the
Westlink Partners in accordance with the relevant terms of the Equity Subscription
Agreement are paid directly into the Income Tax Account.
(b)
Withdrawals from the Income Tax Account
The Issuer:
8.9
(i)
may only withdraw amounts standing to the credit of the Income Tax
Account in order to pay an Assessed Tax Liability owing by the Issuer on
each Assessed Tax Liability Payment Date in accordance with the Equity
Subscription Agreement; and
(ii)
is authorised to make withdrawals from the Income Tax Account in
accordance with the Security Trust Deed at all times, including in
circumstances where an Event of Default or a Review Event is subsisting.
Heavy Vehicle Toll Uplift Account
From the date of NorthConnex Financial Close, WSO Co must maintain the Heavy Vehicle
Toll Uplift Account (“HVTUA”) with the Account Bank. This account is controlled by RMS.
NorthConnex Financial Close occurred on 31 January 2015.
(a)
Payments to the Heavy Vehicle Toll Uplift Account
If a NorthConnex Trigger Event is subsisting (being an abandonment or a precompletion termination notice being given in respect of the NorthConnex Project),
WSO Co must transfer from the Proceeds Accounts to the HVTUA the required
Heavy Vehicle Toll Quarterly Uplift Amount plus any shortfall not transferred to the
account in previous quarters, in accordance with and to the extent permitted by the
cashflow waterfall provisions of the Security Trust Deed (as described in paragraph
8.3 above) .
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(b)
Withdrawals from the Heavy Vehicle Toll Uplift Account
(i)
If a NorthConnex Trigger Event is subsisting, RMS may make quarterly
withdrawals from the HVTUA (until there is no NorthConnex Shortfall
Amount and there is no reasonable prospect of a NorthConnex Shortfall
Amount arising). The “NorthConnex Shortfall Amount” is defined in the
Project Deed. Broadly, it is the shortfall between amounts WSO Co is
required to pay to RMS in the event the NorthConnex Project is abandoned
or terminated and the amounts RMS recovers by claiming on letters of credit
provided in respect of the NorthConnex Project.
(ii)
If:
(A)
RMS confirms that a NorthConnex Trigger Event has been
remedied and no NorthConnex Shortfall Amount has arisen; or
(B)
RMS closes the HVTUA in accordance with the Project Deed,
then the balance of the HVTUA (if any) at that time must be transferred to
the Distribution Account of WSO Co (and those amounts will not be subject
to the “Distribution conditions” described below).
9
Distribution conditions
Available Cash in respect of any calendar quarter may only be transferred from the Proceeds
Accounts to the Distribution Accounts and used to pay a Distribution if the following
conditions are satisfied:
(a)
the Issuer has delivered a Compliance Certificate demonstrating that, on the most
recent Calculation Date, the Lock Up Test has been met and either:
(i)
the CTD Agent has confirmed that the Compliance Certificate is
satisfactory; or
(ii)
at least 10 Business Days have elapsed since the Compliance Certificate
was delivered to the CTD Agent (at which time the CTD Agent is deemed to
have approved the Compliance Certificate). If the Compliance Certificate is
disputed, the Security Trust Deed sets out a regime for the CTD Agent and
Issuer to resolve the dispute;
(b)
the Lock Up Test was also satisfied on the Calculation Date immediately prior to the
Calculation Date to which the Compliance Certificate relates;
(c)
the Major Capital Maintenance Reserve Account is funded to the applicable MCMRA
Minimum Balance;
(d)
amounts required to be paid to the Heavy Vehicle Toll Uplift Account in accordance
with the Project Deed and the section entitled “Heavy Vehicle Toll Uplift Account”
above have been paid; and
(e)
no Default is subsisting.
The Issuer must ensure that no funds are transferred to a Distribution Account and no
Distribution to any person using any funds other than those standing to the credit of a
75
Distribution Account is made or paid otherwise than in accordance with this section entitled
“Distribution conditions”.
“Lock Up Test” means, in respect of any Calculation Date, the DSCR for the 12 month
Calculation Period ending on that Calculation Date is equal to or greater than 1.30:1.
“DSCR” means, in respect of any 12 month Calculation Period ending on a Calculation Date,
the ratio of Cash Flow Available for Debt Service to Debt Service for that relevant Calculation
Period.
10
RMS Consent Deed
Each Westlink Entity, RMS and the Security Trustee are party to the RMS Consent Deed
(2014) (“RMS Consent Deed”). Consistent with other financier tripartite deeds for tollroads in
the Australian market, the RMS Consent Deed contains provisions relating to:
(a)
the order of priority between the Security held by the Security Trustee for the
Beneficiaries and the RMS Security, and the priority of enforcement rights in respect
of those security interests;
(b)
RMS’ rights to terminate the Project Deed, subject to the Security Trustee’s right to
remedy a Project Default under the Project Deed (including the appointment by the
Security Trustee of an Enforcing Party such as a receiver);
(c)
amendments to the Finance Documents and Project Documents.
The RMS Consent Deed also contains provisions in relation to the distribution of insurance
proceeds.
10.2
Security held by the Security Trustee and RMS Security
The RMS Security consists of the RTA Charge (granted in 2003) and RMS’ rights, title and
interests in the Heavy Vehicle Toll Uplift Account (“HVTUA Collateral”) (“HVTUA Security”).
Pursuant to the RMS Consent Deed, except for RMS Priority Moneys, the Security held by
the Security Trustee on behalf of the Beneficiaries has priority over the RMS Security.
“RMS Priority Moneys” refers to:
10.3
(a)
amounts owed to RMS for loss suffered or incurred by RMS in taking action under
the Project Deed to remedy a failure by Westlink or WSO Co (each a “Company”
and together the “Companies” under the RMS Consent Deed) to perform its
obligations under the Project Deed; or
(b)
amounts for which WSO Co has indemnified RMS under the Project Deed in the
event that the NorthConnex Project Deed is terminated or the NorthConnex Project
is abandoned.
Enforcement rights
If an Event of Default is subsisting under the HVTUA Security, RMS may enforce its security
without the consent of the Security Trustee and such enforcement action has priority over
any enforcement action taken by the Security Trustee in relation to the HVTUA Collateral
pursuant to the Security held on trust for the Beneficiaries. In all other circumstances, the
RMS Consent Deed provides that RMS will not enforce or attempt to enforce its rights under
the RMS Security without the Security Trustee’s consent and enforcement action taken by
76
the Security Trustee (including the appointment of a receiver) will take precedence over
enforcement action taken by RMS.
10.4
Remedy of Project Defaults and termination of the Project Deed
If a Project Default occurs under (and as defined in) the Project Deed, RMS must notify the
Security Trustee. Pursuant to the RMS Consent Deed, RMS:
(a)
acknowledges the Security Trustee’s rights to remedy or pursue the remedy of a
Project Default. RMS must be updated on the steps taken and progress made to
remedy the Project Deed, including the costs of remedial action;
(b)
agrees to provide access to the Project site and all information required in order for
the Security Trustee to remedy the Project Default; and
(c)
agrees not to terminate the Project Deed unless it gives prior notice to the Security
Trustee and only in circumstances where the Project Default is not remedied (or its
effects overcome) by the Security Trustee, the Beneficiaries, an Enforcing Party or
either Company within the relevant cure period.
If the Project Default is a failure to make relevant payments to the Heavy Vehicle Toll Uplift
Account as required under the Project Deed, the remedy period granted by RMS is 10
Business Days after the date that RMS first notifies the Security Trustee of its intention to
terminate the Project Deed. In respect of other Project Defaults, under the RMS Consent
Deed the Security Trustee is granted the aggregate cure period which is available to the
relevant Company under the Project Deed to remedy the relevant Project Default (or
overcome its effects) plus such additional period (up to 18 months) as is reasonable to effect
a remedy of the relevant Project Default, provided that the Security Trustee (or other
Enforcing Party) is diligently pursuing the remedy of the Project Default and the Security
Trustee (or other Enforcing Party) is continuing to operate and keep the M7 Motorway open
in accordance with the provisions of the Project Deed to the extent that it is safe to do so
(unless permitted otherwise under the Project Deed).
Pursuant to the RMS Consent Deed, RMS also agrees that the Security Trustee may:
10.5
(a)
appoint an Enforcing Party (acceptable to RMS) to perform the Companies’
obligations under the Project Deed;
(b)
novate the O&M Agreement or the TCM Agreement (as defined in the Project Deed)
to a replacement operator or tolling services manager with requisite expertise and
financial capacity on terms satisfactory to RMS; or
(c)
subject to RMS’ prior written consent, dispose of the Companies’ interests under the
Project Documents. RMS’ consent must not be unreasonably withheld.
Amendments to the Finance Documents and Project Documents
Under the RMS Consent Deed:
(a)
RMS undertakes for the benefit of the Security Trustee that it will not amend or vary
the terms of any Project Document to which it is a party (other than minor technical
amendments or variations which would not reasonably affect the interests of the
Beneficiaries) without the prior consent of the Security Trustee (not to be
unreasonably withheld or delayed); and
77
(b)
the Security Trustee, the Issuer and the Companies undertake for the benefit of
RMS that (other than with RMS’ consent or as part of a refinancing to which RMS
has consented) the Finance Documents will not be amended, modified or replaced
in a manner which increases the principal amount of the Project Debt or brings
forward the amortisation profile of the principal component of the Project Debt,
increases the amount of interest (including all fees and margins) payable on the
Project Debt in a material respect or adversely affects the rent payable to RMS
under the Motorway Stratum Lease or the Gantry Land Lease.
If the Finance Documents are amended, modified, varied or replaced without RMS’
consent (if required), then RMS is only liable under the Project Documents to the
extent it would have been liable had there been no such modification, variation,
amendment or replacement to the Finance Documents.
10.6
Application of insurance proceeds
If the Security Trustee or a Company receives relevant insurance proceeds in respect of loss
or damage to the Project Works, Temporary Works or the Motorway, the proceeds must be
deposited into the Insurance Proceeds Account (as described in the section entitled
“Insurance Proceeds Account” above).
If the insurance proceeds are $200 million or less, they must be applied to repair or replace
the Project Works, Temporary Works and/or the Motorway.
If the insurance proceeds exceed $200 million, they must be applied to repair or replace the
Project Works, Temporary Works and/or the Motorway provided that the following conditions
are met:
(a)
the insurance proceeds and other sources of funds are sufficient to repair or
reinstate the Project Works, Temporary Works and/or the Motorway (as applicable)
within a reasonable time;
(b)
the Issuer remains able to meet its payment obligations to the Beneficiaries under
the Finance Documents; and
(c)
it is economically viable to repair or replace the Project Works, Temporary Works
and/or the Motorway having regard to current circumstances.
If the conditions in paragraphs (a) to (c) are not met within 3 months of the event giving rise
to the insurance proceeds being paid to the Security Trustee, the Security Trustee can apply
the insurance proceeds in payment of the Finance Debt under the Finance Documents and
the balance (if any) must be paid to an account jointly held in the name of RMS and the
relevant Company.
11
Proposed amendments to the Security Trust Deed
11.1
Amendments to the sharing provisions
As described in the section entitled “Enforcement Date, Enforcement Right and sharing
provisions” above, under the Security Trust Deed and the other Finance Documents, a
Beneficiary or relevant Class of Beneficiaries may be entitled to accelerate and receive the
Secured Money owing to it in circumstances where the Security Trustee has not exercised its
Enforcement Rights. In that event, a Beneficiary or relevant Class of Beneficiaries that has
received Secured Money owing to it will be entitled to retain that money and will not be
78
subject to the Post Enforcement Sharing Provisions (as defined in the section entitled
“Enforcement Date, Enforcement Right and sharing provisions” above).
Prior to completion of the note issuance which is the subject of this Information
Memorandum, it is proposed to amend the Security Trust Deed to insert a new provision to
the effect that:
(a)
if a Beneficiary (or, in the case of a Represented Beneficiary, its Representative)
gives a Default Notice to the Security Trustee in relation to an Event of Default
(where such notice must be given if a Fundamental Event of Default subsists or,
where a Non Fundamental Event of Default occurs, relevant Beneficiaries have
determined to accelerate amounts owing to them in accordance with the Finance
Documents); and
(b)
after the date of the Default Notice, a Beneficiary (or, in the case of a Represented
Beneficiary, its Representative) receives or recovers any Secured Money owing to it,
including any Secured Money which has been accelerated by that Beneficiary (or, in
the case of a Represented Beneficiary, its Representative) under the terms of the
Finance Documents to which it is a party,
then the Beneficiary (or, in the case of a Represented Beneficiary, its Representative) who
has received or recovered that Secured Money must, on the Enforcement Date if the
Security Trustee is instructed to commence enforcement action, pay that money to the
Security Trustee for distribution in accordance with the section entitled “Sharing of recovered
moneys post enforcement” above.
11.2
Future unrepresented Beneficiaries
Prior to completion of the note issuance which is the subject of this Information
Memorandum, it is proposed to amend the Security Trust Deed to include new provisions
which permit persons to accede to the Security Trust Deed in the capacity of a Beneficiary
who have not appointed an agent, trustee or other representative as their Representative for
the purposes of the Security Trust Deed (“Unrepresented Beneficiaries”). The
amendments to the Security Trust Deed will provide, inter alia, that block voting will not apply
to Unrepresented Beneficiaries (see the section entitled “Procedures for seeking instructions”
above) and each Unrepresented Beneficiary will separately vote its Exposure in favour of or
against any decision required under the Security Trust Deed and the relevant majority of
Unrepresented Beneficiaries (as specified in the documents to which they are a party) will
constitute a Requisite Majority for the purposes of giving a Non Fundamental Default Notice
and voting on the enforcement of Security.
12
Subordinated Loan Notes
12.1
Holders of Subordinated Loan Notes
Subordinated Loan Notes (“SLNs”) have been issued by Westlink Motorway Limited (“WML”)
(as nominee for Westlink Motorway Partnership) in an aggregate amount of A$1,836,444,832
as at 31 March 2016. These notes represent the initial shareholder funds contributed to the
Westlink Motorway Group during and at the end of construction in December 2005. The
SLNs are currently held as follows:
(a)
20% - WSO Partnership Investment Company Pty Limited (“WSO PIC”);
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12.2
(b)
40% - WSO Investment Management No.3 Pty Limited as trustee of the Western
Sydney Orbital Holding Trust (“WSOHT”); and
(c)
40% - Transurban Nominees Pty Ltd as trustee of the Transurban WSO Trust
(“Transurban WSO Trust”).
Subordination of SLNs
Subordination Deeds in favour of the Security Trustee (on behalf of the Beneficiaries) were
executed in relation to the SLNs held by each of WSOHT and Transurban WSO Trust in
2003 when the SLNs were issued. WSO PIC is not required to execute a subordination
deed in favour of the Security Trustee in respect of the SLNs, pursuant to Westlink’s finance
documents.
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Note Conditions
The following are the Conditions (as defined below) which, as supplemented, amended, modified or
replaced by the relevant Pricing Supplement, will apply to the Notes constituted by the Note Trust
Deed. References to a “Pricing Supplement” in these Conditions do not limit the provisions which
may be supplemented, amended, modified or replaced by the Pricing Supplement in relation to a
particular Series of Notes. Terms used in the relevant Pricing Supplement will, unless the contrary
intention appears, have the same meaning where used in these Conditions but will prevail to the
extent of any inconsistency.
Each Noteholder, and each person claiming through or under each such Noteholder, is bound by,
and is deemed to have notice of, the provisions of the Note Trust Deed and these Conditions
(including the applicable Pricing Supplement). Each such person is also deemed to have notice of
the Information Memorandum. Copies of these documents are available for inspection by the
Noteholder during business hours at the Specified Office of the Note Trustee.
Part 1
Definitions
1
Interpretation
1.1
Definitions
In these Conditions the following expressions have the following meanings:
Accounts means profit and loss accounts, balance sheets and cashflow statements together
with any statements, reports (including any directors’ and auditors’ reports) and notes
attached to or intended to be read with any of them.
Additional Amount means an additional amount payable by the Issuer under Condition 15.2
(“Additional amounts”).
Agency Agreement means:
(a)
the Registry Services Agreement;
(b)
another agreement between the Issuer and a Registrar in relation to the Notes and
specified in a Pricing Supplement; or
(c)
another agency agreement between the Issuer and another Agent in relation to the
Notes under the Programme.
Agent means each of the Registrar, the Calculation Agent and any additional agent
appointed under an Agency Agreement, or any of them as the context requires.
Austraclear means Austraclear Ltd (ABN 94 002 060 773).
Austraclear Regulations means the regulations known as the “Austraclear Regulations”,
together with any instructions or directions, established by Austraclear (as amended or
replaced from time to time) to govern the use of the Austraclear System and binding on the
participants in that system.
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Austraclear System means the system operated by Austraclear in Australia for holding
securities and electronic recording and settling of transactions in those securities between
participants of the system.
Australian Tax Act means the Income Tax Assessment Act 1936 of Australia and where
applicable the Income Tax Assessment Act 1997 of Australia.
Authorisation means any consent, permission, authorisation, registration, filing, agreement,
notarisation, certificate, permit, licence, approval, authority, exemption or requirement
whether from, by or with, a Government Agency or any other person. For the purposes of
Condition 6.5(c) (“Authorisations”), it does not include any registration under the PPSA or any
similar security registration which can be effected by the Security Trustee.
Authorised Representative means:
(a)
in respect of the Issuer or a Westlink Entity, a director or company secretary of that
party or any other person from time to time appointed by that party as an Authorised
Representative for the purpose of the Note Documents and notified to the Note
Trustee (with a certified copy of that person’s specimen signature) as being
authorised to act as an authorised representative for the purposes of the Note
Documents; or
(b)
in respect of the Note Trustee, a director or company secretary of the Note Trustee
or any other person from time to time appointed by the Note Trustee as an
Authorised Representative for the purpose of the Note Documents and notified to
the Issuer (with a certified copy of that person’s specimen signature) as being
authorised to act as an authorised representative for the purposes of the Note
Documents.
Bank Bill Rate is defined in Condition 9.6 (“Bank Bill Rate determination”).
Bill has the meaning it has in the Bills of Exchange Act 1909 of Australia and a reference to
the acceptance of a Bill is to be interpreted in accordance with that Act.
Business Day means a day other than a Saturday, Sunday or public holiday on which banks
are open for business generally in Melbourne, Sydney and:
(a)
any “Relevant Financial Centre” specified in an applicable Pricing Supplement; and
(b)
if a Note held in a Clearing System is to be issued or a payment made in respect of
a Note held in a Clearing System on that day, a day on which each Clearing System
for the relevant Note is operating.
Business Day Convention means a convention for adjusting any date if it would otherwise
fall on a day that is not a Business Day and the following conventions, where specified in the
Pricing Supplement in relation to any date applicable to any Note, have the following
meanings:
(a)
Floating Rate Convention means that the date is postponed to the next following
day which is a Business Day unless that day falls in the next calendar month, in
which event:
(i)
such date is brought forward to the first preceding day that is a Business
Day; and
82
(ii)
each subsequent Interest Payment Date is the last Business Day in the
month which falls the number of months or other period specified as the
Interest Period in the Pricing Supplement after the preceding applicable
Interest Payment Date occurred;
(b)
Following Business Day Convention means that the date is postponed to the first
following day that is a Business Day;
(c)
Modified Following Business Day Convention or Modified Business Day
Convention means that the date is postponed to the first following day that is a
Business Day unless that day falls in the next calendar month in which case that
date is brought forward to the first preceding day that is a Business Day;
(d)
Preceding Business Day Convention means that the date is brought forward to
the first preceding day that is a Business Day; and
(e)
No Adjustment means that the relevant date must not be adjusted in accordance
with any Business Day Convention.
If no convention is specified in the Pricing Supplement, the Following Business Day
Convention applies. Different conventions may be specified in relation to, or apply to,
different dates.
Calculation Agent means the Registrar or any other person specified in the applicable
Pricing Supplement as the party responsible for calculating the Interest Rate and other
amounts required to be calculated under these Conditions.
Calculation Date has the meaning given to that term in the Security Trust Deed.
Clearing System means:
(a)
the Austraclear System; or
(b)
any other clearing system outside Australia specified in the applicable Pricing
Supplement.
Code means the United States of America Internal Revenue Code of 1986.
Conditions means, in relation to a Note, these terms and conditions as supplemented,
amended, modified or replaced by the Pricing Supplement applicable to such Note and
references to a particular numbered Condition shall be construed accordingly.
Consent Deed means each of:
(a)
the RMS Consent Deed;
(b)
the document entitled “Western Sydney Orbital RTA Consent Deed” dated 13
February 2003 between RMS, Westlink Motorway Limited, the Security Trustee and
others;
(c)
the document entitled “RTA Consent Deed (2010)” dated on or about 10 September
2010 between RMS, Westlink Motorway Limited, the Security Trustee and others;
(d)
the document entitled “RMS Consent Deed (2012)” dated 25 September 2012
between RMS, Westlink Motorway Limited, the Security Trustee and others;
83
(e)
the document entitled “O&M Consent Deed” dated 13 February 2003 between
Westlink (Services) Pty Ltd (ABN 21 096 511 376), WSO Co Pty Ltd, the Security
Trustee and others;
(f)
the document entitled “Tolling Services Consent Deed” dated 13 February 2003
between the Roam Tolling Pty Ltd (ACN 103 186 670), Transurban Limited (ACN
098 143 410), WSO Co Pty Ltd, the Security Trustee and others, as amended and
restated on 31 January 2015; and
(g)
any other consent document, direct document or other tripartite document (however
named) in respect of a project document in connection with the Project Business
from time to time,
in each case, as amended, amended and restated or replaced from time to time.
Controller has the meaning given to that term in the Security Trust Deed.
Day Count Fraction means, in respect of the calculation of interest on a Note for any period
of time (“Calculation Period”), the day count fraction specified in the Pricing Supplement
and:
(a)
(b)
(c)
if “Actual/Actual (ICMA)” is so specified, means:
(i)
where the Calculation Period is equal to or shorter than the Regular Period
during which it falls, the actual number of days in the Calculation Period
divided by the product of (1) the actual number of days in such Regular
Period, and (2) the number of Regular Periods normally ending in any year;
and
(ii)
where the Calculation Period is longer than one Regular Period, the sum of:
(A)
the actual number of days in such Calculation Period falling in the
Regular Period in which it begins divided by the product of (1) the
actual number of days in such Regular Period and (2) the number
of Regular Periods in any year; and
(B)
the actual number of days in such Calculation Period falling in the
next Regular Period divided by the product of (1) the actual number
of days in such Regular Period, and (2) the number of Regular
Periods normally ending in any year;
if “Actual/Actual” or “Actual/Actual (ISDA)” is so specified, means 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:
(i)
the actual number of days in that portion of the Calculation Period falling in a
leap year divided by 366; and
(ii)
the actual number of days in that portion of the Calculation Period falling in a
non-leap year divided by 365);
if “Actual/365 (Fixed)” is so specified, means the actual number of days in the
Calculation Period divided by 365;
84
(d)
if “Actual/360” is so specified, means the actual number of days in the Calculation
Period divided by 360;
(e)
if “30/360”, “360/360” or “Bond Basis” is specified in the relevant Pricing
Supplement, the number of days in the Calculation Period divided by 360 calculated
on a formula basis as follows:
Day Count Fraction
=
[360 x (Y2 -Y1)] + [30 x (M2 -M1)]+ (D2 -D1)
360
where:
(f)
“Y1”
is the year, expressed as a number, in which the first day of the Calculation
Period falls;
“Y2”
is the year, expressed as a number, in which the day immediately following
the last day included in the Calculation Period falls;
“M1”
is the calendar month, expressed as a number, in which the first day of the
Calculation Period falls;
“M2”
is the calendar month, expressed as a number, in which the day
immediately following the last day included in the Calculation Period falls;
“D1”
is the first calendar day, expressed as a number, of the Calculation Period,
unless such number would be 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 Calculation Period, unless such number would be 31
and D1 is greater than 29, in which case D2 will be 30;
if “30E/360” or “Eurobond basis” is specified in the relevant Pricing Supplement,
the number of days in the Calculation Period divided by 360 calculated on a formula
basis as follows:
Day Count Fraction
=
[360 x (Y2 -Y1)] + [30 x (M2 -M1)]+ (D2 -D1)
360
where:
(g)
“Y1”
is the year, expressed as a number, in which the first day of the Calculation
Period falls;
“Y2”
is the year, expressed as a number, in which the day immediately following
the last day included in the Calculation Period falls;
“M1”
is the calendar month, expressed as a number, in which the first day of the
Calculation Period falls;
“M2”
is the calendar month, expressed as a number, in which the day
immediately following the last day included in the Calculation Period falls;
“D1”
is the first calendar day, expressed as a number, of the Calculation Period,
unless such number would be 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 Calculation Period, unless such number would be 31
and D1 is greater than 29, in which case D2 will be 30;
if “30E/360 (ISDA)” is specified hereon, the number of days in the Calculation Period
divided by 360, calculated on a formula basis as follows:
85
Day Count Fraction
=
[360 x (Y2 -Y1)] + [30 x (M2 -M1)]+ (D2 -D1)
360
where:
(h)
(i)
“Y1”
is the year, expressed as a number, in which the first day of the Calculation
Period falls;
“Y2”
is the year, expressed as a number, in which the day immediately following
the last day included in the Calculation Period falls;
“M1”
is the calendar month, expressed as a number, in which the first day of the
Calculation Period falls;
“M2”
is the calendar month, expressed as a number, in which the day
immediately following the last day included in the Calculation Period falls;
“D1”
is the first calendar day, expressed as a number, of the Calculation 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; and
“D2”
is the calendar day, expressed as a number, immediately following the last
day included in the Calculation Period, unless (i) that day is the last day of
February but not the Maturity Date or (ii) such number would be 31, in
which case D2 will be 30;
if “RBA Bond Basis” or “Australian Bond Basis” is so specified, means one
divided by the number of Interest Payment Dates in a year (or where the Calculation
Period does not constitute an 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:
(i)
the actual number of days in that portion of the Calculation Period falling in a
leap year divided by 366; and
(ii)
the actual number of days in that portion of the Calculation Period falling in a
non-leap year divided by 365)); and
any other day count fraction specified in the Pricing Supplement.
Event of Default means any event set out in Condition 12.1 (“Events of Default”).
Exposure has the meaning given to that term in the Security Trust Deed.
Extraordinary Resolution has the meaning given to that term in the Note Trust Deed.
FATCA means:
(a)
sections 1471 to 1474 of the Code or any associated regulations or other official
guidance;
(b)
any treaty, law, regulation or other official guidance enacted in any other jurisdiction,
or relating to an intergovernmental agreement between the United States of America
and any other jurisdiction with respect thereto; or
(c)
any agreement in respect of paragraphs (a) or (b) above with the United States of
America Internal Revenue Service, the United States of America government or any
governmental or taxation authority in any other jurisdiction.
86
Finance Debt has the meaning given to that term in the Security Trust Deed.
Finance Documents means each of:
(a)
the Note Documents;
(b)
the Agency Agreement;
(c)
the Security Trust Deed;
(d)
the Security Trust Deed Accession Deed; and
(e)
each Security.
Fixed Coupon Amount has the meaning given in Condition 8.2 (“Fixed Coupon Amount”).
Fixed Rate Note means a Note on which interest is calculated at a fixed rate payable in
arrears on a fixed date or fixed dates in each year and on redemption or on any other dates
as specified in the Pricing Supplement.
Floating Rate Note means a Note on which interest is calculated at a floating rate payable in
arrears on such periodic basis in each year and on redemption or on any other dates as
specified in the Pricing Supplement.
Government Agency has the meaning given to that term in the Security Trust Deed.
Information Memorandum means:
(a)
the Information Memorandum dated on or about 3 June 2016 or the then latest
information memorandum which replaces that document; or
(b)
the information memorandum, disclosure document (as defined in the Corporations
Act) or other offering document referred to in the Pricing Supplement,
in each case prepared by, or on behalf of, and approved in writing by, the Issuer in
connection with the issue of Notes and all documents incorporated by reference in it,
including a Pricing Supplement and any other amendments or supplements to it.
Insolvency Event has the meaning given to that term in the Security Trust Deed.
Interest Commencement Date means, in respect of a Note, the Issue Date of the Note or
any other date so specified in the Pricing Supplement.
Interest Determination Date means each date so specified in, or determined in accordance
with, the Pricing Supplement.
Interest Payment Date means each date so specified in, or determined in accordance with,
the Pricing Supplement.
Interest Period means each period beginning on (and including) an Interest Payment Date
and ending on (but excluding) the next Interest Payment Date. However:
(a)
the first Interest Period commences on (and includes) the Interest Commencement
Date; and
87
(b)
the final Interest Period ends on (but excludes) the Maturity Date or the relevant
redemption date.
Interest Rate means, for a Note, the interest rate (expressed as a percentage per annum)
payable in respect of that Note specified in the Pricing Supplement or calculated or
determined in accordance with these Conditions and the Pricing Supplement.
ISDA Definitions means the 2006 ISDA Definitions published by the International Swaps
and Derivatives Association, Inc. (as supplemented, amended and updated as at the Issue
Date of the first Tranche of the Notes of the relevant Series).
Issue Date means the date on which a Note is, or is to be issued, and as may be specified,
or determined, in accordance with, the relevant Pricing Supplement.
Issue Price means the price as set out in the Pricing Supplement.
Issuer means WSO Finance Pty Ltd (ABN 60 102 757 871).
Margin means the margin specified in, or determined in accordance with, the Pricing
Supplement.
Maturity Date means, the date so specified in, or determined in accordance with, the Pricing
Supplement and includes any Early Redemption Date specified in the Pricing Supplement.
Meetings Provisions means the provisions relating to meetings of Noteholders and set out
as a schedule to the relevant Note Trust Deed.
Note means a medium term note or such other form of debt instrument or debt obligation
specified in a Pricing Supplement and issued or to be issued by the Issuer which is
constituted by, and owing under, the Note Trust Deed, the details of which are recorded in,
and evidenced by entry in, the Register. References to any particular type of “Note” will be
read and construed accordingly. All references to Notes must, unless the context otherwise
requires, be read and construed as references to the Notes of a particular Series.
For the avoidance of doubt, where a Note is held in a Clearing System, references to a
Noteholder include the operator of that system or a nominee for such operator or a common
depositary for one or more Clearing Systems (in each case acting in accordance with the
rules and regulations of the Clearing System or Clearing Systems).
Note Documents means, in respect of a Series and a Tranche, the relevant Note Trust
Deed and the relevant Pricing Supplement as amended and replaced from time to time.
Note Trust Deed means:
(a)
the trust deed entitled “Note Trust Deed” dated on or about 3 June 2016; and
(b)
such other trust deed or deed poll pursuant to which Notes are issued,
in each case, entered into by the Issuer.
Note Trustee means BNY Trust Company of Australia Limited (ABN 49 050 294 052) or any
other entity appointed by the Issuer under the relevant Note Trust Deed in its capacity as
note trustee of the relevant Notes from time to time.
88
Noteholder means, in respect of a Note, each person in whose name a Note is registered
on the Register.
Offshore Associate means an associate (as defined in section 128F(9) of the Australian
Tax Act) of the Issuer that is either:
(a)
a non-resident of Australia which does not acquire the Notes in the course of
carrying on a business at or through a permanent establishment in Australia; or
(b)
a resident of Australia that acquires the Notes in the course of carrying on a
business at or through a permanent establishment outside Australia.
Ordinary Resolution has the meaning given to that term in the Note Trust Deed.
PAFA Act Guarantee means the document entitled “Western Sydney Orbital Project PAFA
Act Deed Poll of Guarantee” dated 4 August 2014 executed by The Honourable Andrew
Constance, Treasurer for and on behalf of the Crown in right of the State of New South
Wales, as amended, amended and restated or replaced from time to time.
Permitted Security Interest means:
(a)
a Security;
(b)
the RMS Security;
(c)
a Security Interest securing taxes, rates and like charges arising by operation of law
in the ordinary course of business where there is no default in payment;
(d)
liens arising in the ordinary course of business and securing obligations not more
than 60 days overdue;
(e)
arrangements constituted by retention of title in connection with the acquisition of
goods on normal commercial terms;
(f)
any right of set-off;
(g)
any security interest in respect of any deposit not exceeding A$1,000,000 relating to
any statutory obligation in the ordinary course of business;
(h)
a Security Interest granted or created under the Consent Deeds;
(i)
any Security Interest in relation to personal property (as defined in the PPSA and to
which the PPSA applies) that is created or provided for by:
(i)
a transfer of an Account of Chattel Paper;
(ii)
a PPS Lease; or
(iii)
a Commercial Consignment,
(as each of those terms are defined in the PPSA) that is not a security interest
within the meaning of section 12(1) of the PPSA;
(j)
any Security Interest, provided that the aggregate of the amounts secured by
Security Interests under this paragraph at any time is not greater than A$20,000,000;
89
(k)
any Security Interest permitted under a Finance Document (as defined in the
Security Trust Deed); or
(l)
any Security Interest which replaces a Security Interest described in any paragraph
above.
Potential Event of Default means an event which, with the giving of notice, lapse of time or
fulfilment of any condition would be likely to become an Event of Default.
PPSA means the Personal Property Securities Act 2009 (Cwlth).
Pricing Supplement means, in respect of a Tranche, the pricing supplement specifying the
relevant issue details in relation to that Tranche and which may be substantially in the form
set out in the Information Memorandum, duly completed and signed by the Issuer.
Programme means the medium term note programme established by the Issuer and to
which the Information Memorandum relates.
Project Business means:
(a)
the development, design, construction, operation, maintenance, ownership and/or
funding of the road known as Westlink M7 in Sydney, New South Wales (including
any future expansion or widening of Westlink M7);
(b)
the ownership, management and/or funding of the Westlink Entities;
(c)
any other activity in connection with the carrying on of the Project which is permitted
under the Project Deed or otherwise approved by or agreed with RMS; and
(d)
any activity incidental or ancillary to the activities described in paragraph (a), (b) or
(c) above (including the provision of services to other road operators or third parties
and any interfacing activities with any other road or asset).
Project has the meaning given to that term in the Security Trust Deed.
Project Deed means the document entitled “Western Sydney Orbital Project Deed” dated 13
February 2003 between RMS, Westlink Motorway Limited and WSO Co Pty Ltd, as amended
or amended and restated from time to time.
Receiver has the meaning given to that term in the Security Trust Deed.
Record Date means the close of business in the place where the Register is maintained on
the date which is seven clear calendar days before the payment date or any other date so
specified in the Pricing Supplement.
Redemption Amount means, unless otherwise specified in the relevant Pricing Supplement,
the outstanding principal amount as at the date of redemption and also includes any other
amount in the nature of a redemption amount specified in, or determined in accordance with,
the relevant Pricing Supplement or these Conditions.
Reference Banks means the institutions so described in the Pricing Supplement or, if none,
four major banks selected by the Calculation Agent in the market that is most closely
connected with the Reference Rate.
90
Reference Rate means, the rate specified in, or determined in accordance with, the Pricing
Supplement.
Register means the register, including any branch register, of holders of Notes established
and maintained by or on behalf of the Issuer under an Agency Agreement.
Registrar means BTA Institutional Services Australia Limited (ABN 48 002 916 396) or any
other person appointed by the Issuer under an Agency Agreement to maintain the Register
and perform any payment and other duties as specified in that agreement.
Registry Services Agreement means the “Agency and Registry Services Agreement” dated
on or about 3 June 2016 between the Issuer and the Registrar in relation to the Notes as
amended from time to time.
Regular Period means:
(a)
in the case of Notes where interest is scheduled to be paid only by means of regular
payments, each Interest Period;
(b)
in the case of Notes where, apart from the first Interest Period, interest is scheduled
to be paid only by means of regular payments, each period from and including a
Regular Date falling in any year to but excluding the next Regular Date, where
"Regular Date" means the day and month (but not the year) on which any Interest
Payment Date falls; and
(c)
in the case of Notes where, apart from one Interest Period other than the first
Interest Period, interest is scheduled to be paid only by means of regular payments,
each period from and including a Regular Date falling in any year to but excluding
the next Regular Date, where "Regular Date" means the day and month (but not the
year) on which any Interest Payment Date falls other than the Interest Payment Date
falling at the end of the irregular Interest Period.
Related Body Corporate has the meaning given in the Corporations Act.
Relevant Screen Page means:
(a)
the page, section or other part of a particular information service (including the
Reuters Monitor Money Rates Service and Bloomberg Professional) specified as the
Relevant Screen Page in the Pricing Supplement; or
(b)
any other page, section or other part as may replace it on that information service or
such other information service, in each case, as may be nominated by the person
providing or sponsoring the information appearing there for the purpose of
displaying rates or prices comparable to the Reference Rate.
Relevant Tax Jurisdiction means the Commonwealth of Australia or any political subdivision of it.
Relevant Time has the meaning given in the Pricing Supplement.
RMS means Roads and Maritime Services (ABN 76 236 371 088) (formerly known as the
Roads and Traffic Authority constituted under the Transport Administration Act 1988 (NSW)).
RMS Consent Deed has the meaning given to that term in the Security Trust Deed.
91
RMS Security means the deed of charge dated 13 February 2003 granted by the Issuer,
Westlink Motorway Limited and others to RMS, as amended, amended and restated or
replaced from time to time.
Secured Property means the property which is subject to the Security.
Security has the meaning given to that term in the Security Trust Deed.
Security Interest has the meaning given to that term in the Security Trust Deed.
Security Trust Deed means the “Westlink M7 – Security Trust Deed” originally dated 13
February 2003 between the Issuer, the Security Trustee and others, as amended from time
to time.
Security Trust Deed Accession Deed means the “Accession Deed” to the Security Trust
Deed to be entered into on or about June 2016 between the Security Trustee and the Note
Trustee.
Security Trustee means National Australia Bank Limited (ABN 12 004 044 937) or any
person who becomes the “Security Trustee” under the Security Trust Deed.
Series means an issue of Notes made up of one or more Tranches all of which form a single
Series and are issued on the same Conditions except that the Issue Date, the Issue Price
and the Interest Commencement Date may be different in respect of a different Tranche of a
Series.
Special Quorum Resolution has the meaning given to that term in the Note Trust Deed.
Specified Office means, in respect of a person, the office specified in the Information
Memorandum or any other address notified to Noteholders from time to time.
Subsidiary has the meaning given to that term in the Security Trust Deed.
Taxes has the meaning given to that term in the Security Trust Deed.
Tranche means an issue of Notes specified as such in the relevant Pricing Supplement
issued on the same Issue Date and on the same Conditions.
Westlink Entity means each of:
(a)
the Issuer;
(b)
WSO Co Pty Ltd (ACN 102 757 924);
(c)
Westlink Motorway Limited (ACN 096 512 300);
(d)
WSO Partnership Investment Company Pty Limited (ACN 134 324 502);
(e)
WSO Investment Management No.3 Pty Limited (ACN 134 324 520) as trustee of
the Western Sydney Orbital Holding Trust (ABN 84 641 031 335); and
(f)
Transurban Nominees Pty Ltd (ACN 103 029 269) as trustee of the Transurban
WSO Trust (ABN 56 360 773 461).
Westlink Entity Trust means each of:
92
(a)
the Western Sydney Orbital Holding Trust (ABN 84 641 031 335); and
(b)
the Transurban WSO Trust (ABN 56 360 773 461).
Westlink Entity Trustee means each of:
(a)
in respect of the Western Sydney Orbital Holding Trust (ABN 84 641 031 335), WSO
Investment Management No.3 Pty Limited (ACN 134 324 520); and
(b)
in respect of the Transurban WSO Trust (ABN 56 360 773 461), Transurban
Nominees Pty Ltd (ACN 103 029 269).
Westlink Entity Trust Deed means each of:
(a)
in respect of the Western Sydney Orbital Holding Trust (ABN 84 641 031 335), the
trust deed dated 13 December 2002; and
(b)
in respect of the Transurban WSO Trust (ABN 56 360 773 461), the trust deed
dated 12 December 2002.
Westlink Motorway Partnership means the partnership trading under the name “Westlink
Motorway Partnership”.
1.2
References to certain general terms
Unless the contrary intention appears, a reference in these Conditions to:
(a)
a group of persons (other than the Noteholders) is a reference to any two or more of
them jointly and to each of them individually;
(b)
an agreement, representation or warranty in favour of two or more persons is for the
benefit of them jointly and each of them individually;
(c)
an agreement, representation or warranty by two or more persons binds them jointly
and each of them individually;
(d)
anything (including an amount) is a reference to the whole and each part of it;
(e)
a document (including these Conditions) includes any variation or replacement of it;
(f)
“law” means common law, principles of equity, and any other statute or law made by
parliament (and any other statute or law made by parliament include federal or state
laws and regulations and other instruments under them, and consolidations,
amendments, re-enactments or replacements of any of them);
(g)
a “directive” includes a treaty, official directive, request, regulation, guideline or
policy (whether or not having the force of law) with which responsible participants in
the relevant market generally comply;
(h)
the “Corporations Act” is to the Corporations Act 2001 of Australia;
(i)
an accounting term is a reference to that term as it is used in accounting standards
under the Corporations Act, or, if not inconsistent with those standards, in
accounting principles and practices generally accepted in Australia;
(j)
“Australian dollars” or “A$” is a reference to the lawful currency of Australia;
93
1.3
(k)
a time of day is a reference to Sydney time;
(l)
the word “person” includes an individual, a firm, a body corporate, an
unincorporated association and an authority;
(m)
a particular person includes a reference to the person’s executors, administrators,
successors, substitutes (including persons taking by novation) and assigns; and
(n)
the words “including”, “for example” or “such as” when introducing an example, do
not limit the meaning of the words to which the example relates to that example or
examples of a similar kind.
Number
The singular includes the plural and vice versa.
1.4
Headings
Headings (including those in brackets at the beginning of paragraphs) are for convenience
only and do not affect the interpretation of these Conditions.
1.5
References to particular terms
Unless the contrary intention appears, in these Conditions:
1.6
(a)
a reference to the Issuer, the Registrar, the Calculation Agent or another Agent is a
reference to the person so specified in the Pricing Supplement;
(b)
a reference to the Agency Agreement is a reference to the Agency Agreement
applicable to the Notes of the relevant Series;
(c)
a reference to a Note is a reference to a Note of a particular Series issued by the
Issuer specified in the Pricing Supplement;
(d)
a reference to a Noteholder is a reference to the holder of Notes of a particular
Series; and
(e)
a reference to a particular date is a reference to that date adjusted in accordance
with the applicable Business Day Convention.
References to principal and interest
Unless the contrary intention appears, in these Conditions:
(a)
any reference to “principal” is taken to include the Redemption Amount, any
additional amounts in respect of principal which may be payable under Condition 15
(“Taxation”), any premium payable by the Issuer in respect of Note, and any other
amount in the nature of principal payable in respect of the Notes under these
Conditions;
(b)
the principal amount of a Note which may vary by reference to a schedule or formula
(where such determination has been previously made in accordance with the these
Conditions) is taken as at any time to equal its varied amount; and
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(c)
1.7
any reference to “interest” is taken to include any Additional Amounts and any other
amount in the nature of, or in substitution for, interest payable in respect of the Notes
under these Conditions.
Calculation of period of time
If a notice must be given within a certain period of days or a certain number of days notice
must be given or any other matter must take place within a certain number of days, the day
on which the notice is given or action taken, and the day on which the meeting is to be held or
other action taken, are not to be counted in calculating that period.
1.8
Terms defined in Pricing Supplement
Terms which are specified in the Pricing Supplement as having a defined meaning have the
same meaning when used in these Conditions, but if the Pricing Supplement gives no
meaning or specifies that the definition is "Not Applicable", then that definition is not
applicable to the Notes.
Part 2
Introduction
2
Introduction
2.1
Programme
Notes are issued under the Programme by the Issuer.
2.2
2.3
Pricing Supplement
(a)
The Issuer will issue the Notes on the terms set out in these Conditions as
supplemented, amended, modified or replaced by the Pricing Supplement applicable
to those Notes. If there is any inconsistency between these Conditions and such
Pricing Supplement, the Pricing Supplement prevails.
(b)
Notes are issued in Series. A Series may comprise one or more Tranches having
one or more Issue Dates and on terms and conditions otherwise identical (other
than, to the extent relevant, in respect of the Issue Price, the Issue Date and the
Interest Commencement Date).
(c)
Copies of the Pricing Supplement and these Conditions are available for inspection
upon request by a Noteholder or prospective Noteholder during normal business
hours at the Specified Office of the Issuer, the Note Trustee, the Registrar or each
Agent or are otherwise available on reasonable request from the Issuer or the
Registrar.
Types of Notes
A Note is either:
(a)
a Fixed Rate Note;
(b)
a Floating Rate Note; or
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(c)
2.4
any other type of debt obligation (including a combination of the above) as specified
in the relevant Pricing Supplement.
Issue restrictions and tenor
Unless otherwise specified in any relevant Pricing Supplement, Notes may only be (directly
or indirectly) for issue, or applications invited for the issue of Notes, if:
(a)
(b)
2.5
where the offer or invitation is made in, or into, Australia:
(i)
the aggregate consideration payable to the Issuer by the relevant subscriber
is at least A$500,000 (or its equivalent in an alternative currency, in either
case, disregarding moneys lent by the Issuer or its associates to the
subscriber) or the offer or invitation (including any resulting issue) does not
otherwise require disclosure to investors under Parts 6D.2 or 7.9 of the
Corporations Act; and
(ii)
the offer or invitation (including any resulting issue) does not constitute an
offer to a “retail client” as defined for the purposes of section 761G of the
Corporations Act; and
at all times, the offer or invitation (including any resulting issue) complies with all
applicable laws and directives (including, without limitation the licensing
requirements set out in Chapter 7 of the Corporations Act) in the jurisdiction in which
the offer, invitation or issue takes place.
Denomination
The Notes of each Series will be issued in a single denomination as specified in the relevant
Pricing Supplement.
2.6
Currency
Subject to compliance with all applicable legal and regulatory requirements, Notes may be
denominated in Australian dollars or such other freely transferable and freely available
currency or currencies (as agreed by the Agent (acting reasonably)) specified in the relevant
Pricing Supplement.
2.7
Clearing Systems
If the Notes are held in a Clearing System, the rights of a person holding an interest in those
Notes are subject to the rules and regulations of the Clearing System. The Issuer is not
responsible for anything the Clearing System does or omits to do.
96
Part 3
Notes
3
Form
3.1
Constitution
3.2
3.3
(a)
Notes are debt obligations of the Issuer constituted by, and owing under, the Note
Trust Deed, the details of which are recorded in, and evidenced by entry in, the
Register.
(b)
Noteholders are entitled to the benefit of, are bound by, and are deemed to have
notice of all the provisions of the Note Trust Deed.
(c)
Notes are issued in registered uncertificated form by entry in the Register.
Certificates for Notes
(a)
Unless specified in the relevant Pricing Supplement, no certificates will be issued to
Noteholders in respect of a Series of Notes unless the Issuer determines that
certificates should be available or such are required by any applicable law or
directive.
(b)
Any certificates issued will be in such form as the Issuer may specify. Each
certificate represents a holding of one or more such Notes by the same Noteholder.
Effect of entries in Register
Each entry in the Register in respect of a Note constitutes:
(a)
(b)
3.4
an irrevocable undertaking by the Issuer to the Noteholder to:
(i)
pay principal, any interest (if applicable) and any other amounts in
accordance with these Conditions; and
(ii)
otherwise to comply with the Conditions; and
an entitlement to the other benefits given to Noteholders under these Conditions in
respect of the Note.
Ownership and non-recognition of interests
(a)
Entries in the Register in relation to a Note constitute conclusive evidence that the
person so entered is the absolute owner of such Note subject to correction for fraud
or proven error.
(b)
No notice of any trust or other interest in, or claim to, any Note will be entered in a
Register. Neither the Issuer nor the relevant Registrar need take notice of any trust
or other interest in, or claim to, any Note, except as ordered by a court of competent
jurisdiction or required by any applicable law or directive. This Condition 3.4(b)
(“Ownership and non-recognition of interests”) applies whether or not a Note is
overdue and despite any notice of ownership, trust or interest in the Note.
97
3.5
Joint holders
Where two or more persons are entered in the Register as the joint holders of a Note then
they are taken to hold that Note as joint tenants with rights of survivorship, but the Registrar
is not bound to register more than four persons as joint holders of a Note.
4
Status
4.1
Status of Notes
The Notes constitute direct, secured, unconditional and unsubordinated obligations of the
Issuer ranking equally among themselves and in priority to all unsecured obligations of the
Issuer, except liabilities mandatorily preferred by law.
4.2
Security
Amounts due under the Notes and the Note Trust Deed are secured by the Security. The
Security Trustee holds the Security on trust for the Beneficiaries (as defined in the Security
Trust Deed, and which includes the Note Trustee and the Noteholders) and subject to the
terms of the Security Trust Deed. By the Note Trustee acceding as a party to the Security
Trust Deed, the Noteholders receive, through the Note Trustee, the benefit of the Security
Trust Deed and the Security.
5
Negative pledge
So long as any Note remains outstanding, the Issuer will not, and will ensure that each other
Westlink Entity will not, create or allow to exist any Security Interest over all or any of its
assets other than a Permitted Security Interest, without at the same time or prior thereto:
(a)
securing the Notes equally and rateably therewith; or
(b)
providing such other security for the Notes as may be approved by an Extraordinary
Resolution of Noteholders.
6
Undertakings
6.1
Reporting
So long as any Note remains outstanding, the Issuer must deliver to the Note Trustee:
(a)
within 120 days after the close of each financial year, copies of the audited Accounts
of the Issuer, WSO Co Pty Ltd, Westlink Motorway Limited and the Westlink
Motorway Partnership in respect of that financial year. The audited Accounts may be
prepared as an aggregation for those entities as a combined group (notwithstanding
that none of the entities controls any of the others) and will not be required to contain
parent entity columns but may include details on the parent entity;
(b)
within 45 days after the end of each half year, copies of the half yearly management
accounts (including cashflow statements for that half year) of the Issuer, WSO Co
Pty Ltd, Westlink Motorway Limited and the Westlink Motorway Partnership. The
accounts may be prepared as an aggregation for those entities as a combined group
(notwithstanding that none of the entities controls any of the others);
98
(c)
a copy of any notice received under clause 25.2(a) (“Notice of default”) or clause
25.3(a) (“Termination by RMS”) of the Project Deed, promptly upon receipt by a
Westlink Entity, or any notice given by the Westlink Entities under clause 25.5
(“Termination by the Companies”) or clause 27.1 (“Force Majeure notice”) of the
Project Deed, promptly upon being given;
(d)
notice of any proposal by a Government Agency to acquire compulsorily any
property of a Westlink Entity, promptly after the Issuer becomes aware of such
proposal;
(e)
notice of any matter, event or circumstances in relation to a Westlink Entity which
gives rise, or may give rise, to an insurance claim of A$20,000,000 or more or if an
insurance claim of A$20,000,000 or more is refused either in whole or in part,
promptly after the Issuer becomes aware of such matter, event or circumstance;
(f)
notice of any Event of Default or Potential Event of Default, promptly after the Issuer
becomes aware of it.
The Note Trustee will deliver them to the Noteholders promptly upon receipt.
6.2
Insurance
So long as any Note remains outstanding, the Issuer must ensure that the Westlink Entities
obtain and maintain insurances with reputable and independent insurers in the manner and
to the extent which is in accordance with prudent business practice having regard to the
nature of the business and assets of the Westlink Entities.
6.3
Business
So long as any Note remains outstanding, the Issuer will not (and must ensure that the
Westlink Entities will not) carry on any business or other activity other than the Project
Business.
6.4
Amendments to Project Deed
So long as any Note remains outstanding, the Issuer must not (and must ensure that each
Westlink Entity does not) amend or consent to the amendment of the Project Deed if:
6.5
(a)
the amendment will reduce a right of the Westlink Entities to receive a termination
payment under the Project Deed or a right of a Westlink Entity to receive a payment
under clause 19 (“Material Adverse Effect”) of the Project Deed and, in each case,
this will have a material adverse effect on the ability of the Issuer and the other
Westlink Entities (taken as a whole) to meet any payment obligation of the Issuer (at
any time) under the Notes; or
(b)
the amendment would otherwise have a material adverse effect on the ability of the
Issuer and the other Westlink Entities (taken as a whole) to meet any payment
obligations of the Issuer (at any time) under the Notes.
Authorisations
So long as any Note remains outstanding, the Issuer must (and must ensure that each other
Westlink Entity will) obtain and maintain each Authorisation where failure to do so would:
99
(a)
have a material adverse effect on the ability of WSO Co Pty Ltd or Westlink
Motorway Limited to perform its obligations under the Project Deed to keep all traffic
lanes of the Westlink M7 open to the public for the safe, efficient and continuous
passage of vehicles (other than as permitted by the Project Deed);
(b)
have a material adverse effect on the ability of the Issuer and the other Westlink
Entities (taken as a whole) to meet any payment obligation of the Issuer (at any time)
under the Notes; or
(c)
effect the legality, validity or enforceability of the Security.
7
Title and transfer of Notes
7.1
Transfer
Noteholders may only transfer Notes in accordance with these Conditions and the Note Trust
Deed.
7.2
Title
Title to Notes passes when details of the transfer are entered in the Register.
7.3
Transfers in whole
Notes may be transferred in whole but not in part.
7.4
Conditions of transfer
Notes may only be transferred if:
(a)
(b)
7.5
in the case of Notes to be transferred in, or into, Australia, the offer or invitation
giving rise to the transfer:
(i)
is for an aggregate consideration payable to the Issuer by the relevant
subscriber is at least A$500,000 (or its equivalent in an alternative currency,
in either case, disregarding moneys lent by the transferor or its associates to
the subscriber) or if the offer or invitation (including any resulting issue) does
not otherwise require disclosure to investors under Parts 6D.2 or 7.9 of the
Corporations Act; and
(ii)
does not constitute an offer or invitation to a person who is a “retail client” as
defined by the purposes of section 761G of the Corporations Act; and
at all times, the transfer complies with all applicable laws or directives of the
jurisdiction where the transfer takes place.
Transfer procedures
(a)
Interests in Notes held in a Clearing System will be transferable only in accordance
with the rules and regulations of that Clearing System. If a Note is lodged in the
Austraclear System, neither the Issuer nor the relevant Registrar will recognise any
such interest other than the interest of Austraclear as the Noteholder while that Note
is lodged in the Austraclear System.
100
(b)
Application for the transfer of Notes not held in a Clearing System must be made by
the lodgement of a transfer form with the Registrar at its Specified Office. Transfer
forms must be in the form available from the Registrar and:
(i)
(ii)
7.6
each transfer form must be:
(A)
duly completed;
(B)
accompanied by any evidence the Registrar may require to
establish that the transfer form has been duly executed; and
(C)
signed by, or on behalf of, both the transferor and the transferee;
and
transfers will be registered without charge provided all applicable Taxes
have been paid.
Restrictions on transfers
Transfers of Notes which are not lodged in a Clearing System cannot be made between a
Record Date and the relevant Interest Payment Date if a redemption of such Note is to occur
during that period in accordance with these Conditions.
7.7
Effect of transfer
Upon registration and entry of the transferee in the Register the transferor ceases to be
entitled to future benefits under these Conditions in respect of the transferred Note and the
transferee becomes so entitled in accordance with Condition 3.3 (“Effect of entries in
Register”).
7.8
CHESS
Notes which are listed on the Australian Securities Exchange operated by ASX Limited (ABN
98 008 624 691) will not be transferred through, or registered on, the Clearing House
Electronic Subregister System operated by ASX Settlement Pty Limited (ABN 49 008 504
532) and will not be “Approved Financial Products” for the purposes of that system.
7.9
Austraclear as Noteholder
If Austraclear is recorded in the Register as the Noteholder, each person in whose Security
Record (as defined in the Austraclear Regulations) a Note is recorded is taken to
acknowledge in favour of the Issuer, the Registrar and Austraclear that:
7.10
(a)
the Registrar’s decision to act as the Registrar of that Note is not a recommendation
or endorsement by the Registrar or Austraclear in relation to that Note, but only
indicates that the Registrar considers that the holding of the Note is compatible with
the performance by it of its obligations as Registrar under the Registry Services
Agreement; and
(b)
the Noteholder does not rely on any fact, matter or circumstance contrary to
paragraph (a) above.
Estates
A person becoming entitled to a Note as a consequence of the death or bankruptcy of a
Noteholder or of a vesting order or a person administering the estate of a Noteholder may,
101
upon producing such evidence as to that entitlement or status as the Registrar considers
sufficient, transfer the Note or, if so entitled, become registered as the holder of the Note.
7.11
Unincorporated associations
A transfer of a Note to an unincorporated association is not permitted.
7.12
Transfer of unidentified Notes
If a Noteholder transfers some but not all of the Notes it holds and the transfer form does not
identify the specific Notes transferred, the Registrar may choose which Notes registered in
the name of Noteholder have been transferred. However, the aggregate principal amounts
of the Notes registered as transferred must equal the aggregate principal amount of the
Notes expressed to be transferred in the transfer form.
Part 4
Interest on Notes
The Pricing Supplement in respect of each Tranche of Notes will specify which of the following
Conditions apply.
8
Fixed Rate Notes
This Condition 8 applies to Notes only if the Pricing Supplement states that it applies.
8.1
Interest on Fixed Rate Notes
Each Fixed Rate Note bears interest on its outstanding principal amount from (and including)
its Interest Commencement Date to (but excluding) its Maturity Date at the Interest Rate.
Interest is payable in arrears on each Interest Payment Date.
8.2
Fixed Coupon Amount
Unless otherwise provided in the Pricing Supplement, the amount of interest payable on
each Interest Payment Date in respect of the preceding Interest Period will be the Fixed
Coupon Amount specified in the Pricing Supplement.
8.3
Calculation of interest payable
The amount of interest payable in respect of a Fixed Rate Note for any period for which a
Fixed Coupon Amount is not specified in the Pricing Supplement is calculated by multiplying
the Interest Rate for that period, the outstanding principal amount of the Fixed Rate Note and
the applicable Day Count Fraction.
9
Floating Rate Notes
This Condition 9 applies to Notes only if the Pricing Supplement states that it applies.
9.1
Interest on Floating Rate Notes
Each Floating Rate Note bears interest on its outstanding principal amount from (and
including) its Interest Commencement Date to (but excluding) its Maturity Date at the Interest
Rate.
102
Interest is payable in arrears:
9.2
(a)
on each Interest Payment Date; or
(b)
if no Interest Payment Date is specified in the Pricing Supplement, each date which
falls the number of months or other period specified as the Specified Period in the
Pricing Supplement after the preceding Interest Payment Date, or in the case of the
first Interest Payment Date, after the Interest Commencement Date.
Interest Rate determination
The Interest Rate payable in respect of a Floating Rate Note must be determined by the
Calculation Agent in accordance with these Conditions.
9.3
Fallback Interest Rate
Unless otherwise specified in the Pricing Supplement, if, in respect of an Interest Period, the
Calculation Agent is unable to determine a rate in accordance with Condition 9.2 (“Interest
Rate determination”), the Interest Rate for the Interest Period will be the Interest Rate
applicable to the Floating Rate Notes during the immediately preceding Interest Period.
9.4
ISDA Determination
If “ISDA Determination” is specified in the Pricing Supplement as the manner in which the
Interest Rate is to be determined, the Interest Rate applicable to the Floating Rate Notes for
each Interest Period is the sum of the Margin and the ISDA Rate.
In this Condition 9:
(a)
(b)
9.5
“ISDA Rate” means, for an Interest Period, a rate equal to the Floating Rate that
would be determined by the Calculation Agent under an interest rate swap
transaction if the Calculation Agent for the Floating Rate Notes were acting as
Calculation Agent for that Swap Transaction under the terms of an agreement
incorporating the ISDA Definitions and under which:
(i)
the Floating Rate Option, the Designated Maturity and the Reset Date are
as specified in the Pricing Supplement; and
(ii)
the Period End Dates are each Interest Payment Date, the Spread is the
Margin and the Floating Rate Day Count Fraction is the Day Count Fraction;
and
“Swap Transaction”, “Floating Rate”, “Calculation Agent” (except references to
“Calculation Agent for the Floating Rate Notes”), “Floating Rate Option”,
“Designated Maturity”, “Reset Date”, “Period End Date”, “Spread” and “Floating
Rate Day Count Fraction” have the meanings given to those terms in the ISDA
Definitions.
Screen Rate Determination
If Screen Rate Determination is specified in the Pricing Supplement as the manner in which
the Interest Rate is to be determined, the Interest Rate applicable to the Floating Rate Notes
for each Interest Period is the sum of the Margin and the Screen Rate.
103
In this Condition 9, “Screen Rate” means, for an Interest Period, the quotation offered for the
Reference Rate appearing on the Relevant Screen Page at the Relevant Time on the
Interest Determination Date. However:
(a)
if there is more than one offered quotation displayed on the Relevant Screen Page at
the Relevant Time on the Interest Determination Date, the “Screen Rate” means the
rate calculated by the Calculation Agent as the average of the offered quotations. If
there are more than five offered quotations, the Calculation Agent must exclude the
highest and lowest quotations (or in the case of equality, one of the highest and one
of the lowest quotations) from its calculation;
(b)
if an offered quotation is not displayed by the Relevant Time on the Interest
Determination Date or if it is displayed but the Calculation Agent determines that
there is an obvious error in that rate, the “Screen Rate” means:
(c)
9.6
(i)
the rate the Calculation Agent calculates as the average mean of the
Reference Rates that each Reference Bank quoted to the leading banks in
the Relevant Financial Centre specified in the Pricing Supplement at the
Relevant Time on the Interest Determination Date for a period equivalent to
the Interest Period; or
(ii)
where the Calculation Agent is unable to calculate a rate under paragraph (i)
because it is unable to obtain at least two quotes, the rate the Calculation
Agent calculates as the average of the rates (being the nearest equivalent to
the Reference Rate) quoted by two or more banks chosen by the
Calculation Agent in the “Relevant Financial Centre” (as specified in the
Pricing Supplement) at approximately the Relevant Time on the Interest
Determination Date for a period equivalent to the Interest Period to leading
banks carrying on business in the Relevant Financial Centre in good faith; or
if the Pricing Supplement specifies an alternative method for the determination of the
Screen Rate Determination, then that alternative method will apply.
Bank Bill Rate determination
If “Bank Bill Rate determination” is specified in the Pricing Supplement as the manner in
which the Interest Rate is to be determined, the Interest Rate applicable to the Floating Rate
Notes for each Interest Period is the sum of the Margin and the Bank Bill Rate.
In this Condition 9:
(a)
“Bank Bill Rate” means, for an Interest Period, the average mid rate for Bills having
a tenor closest to the Interest Period as displayed on the “BBSW” page of the
Reuters Monitor System on the first day of that Interest Period.
However, if the average mid rate is not displayed by 10:30 am on that day, or if it is
displayed but the Calculation Agent determines that there is an obvious error in that
rate, “Bank Bill Rate” means the rate determined by the Calculation Agent in good
faith at approximately 10:30 am on that day, having regard, to the extent possible, to
the rates otherwise bid and offered for bank accepted Bills of that tenor at or around
that time (including any displayed on the “BBSY” or “BBSW” page of the Reuters
Monitor System); and
(b)
“Bill” has the meaning it has in the Bills of Exchange Act 1909 of Australia and a
reference to the acceptance of a Bill is to be interpreted in accordance with that Act.
104
9.7
Linear Interpolation
If the Pricing Supplement states that "Linear Interpolation" applies to an Interest Period, the
Interest Rate for that Interest Period will be determined through the use of straight line
interpolation by reference to two ISDA Rates, Screen Rates, Bank Bill Rates or other floating
rates specified in the Pricing Supplement, one of which shall be determined as if the Interest
Period were the period of time for which rates are available next shorter than the length of
the Interest Period (or any alternative Interest Period specified in the Pricing Supplement)
and the other of which shall be determined as if the Interest Period were the period of time
for which rates are available next longer than the length of the Interest Period (or any
alternative Interest Period specified in the Pricing Supplement).
Part 5
General interest provisions
10
General provisions applicable to interest
10.1
Maximum or Minimum Interest Rate
If the Pricing Supplement specifies a “Maximum Interest Rate” or “Minimum Interest Rate”
for any Interest Period then, the Interest Rate for the Interest Period must not be greater than
the maximum, or be less than the minimum, so specified and, in respect of a Floating Rate
Note, if the Interest Rate calculated by the Calculation Agent in accordance with these
Conditions and the relevant Pricing Supplement is greater than the Maximum Interest Rate
or less than the Minimum Interest Rate so specified in that Pricing Supplement, the
Maximum Interest Rate or the Minimum Interest Rate, as applicable, will apply for that
Interest Period.
10.2
10.3
Calculation of Interest Rate and interest payable
(a)
The Calculation Agent must, in relation to each Interest Period for each Floating
Rate Note, as soon as practicable after determining the Interest Rate, calculate the
amount of interest payable for the Interest Period in respect of the outstanding
principal amount of such Note.
(b)
Unless otherwise specified in the Pricing Supplement, the amount of interest
payable is calculated by multiplying the product of the Interest Rate for the Interest
Period and the outstanding principal amount of the Note by the applicable Day Count
Fraction.
(c)
The rate determined by the Calculation Agent must be expressed as a percentage
rate per annum.
Calculation of other amounts
If the Pricing Supplement specifies that any other amount is to be calculated by the
Calculation Agent, the Calculation Agent must, as soon as practicable after the time at which
that amount is to be determined, calculate the amount in the manner specified in the Pricing
Supplement.
105
10.4
Notification of Interest Rate, interest payable and other items
(a)
10.5
The Calculation Agent must notify the Issuer, the Note Trustee, the Registrar, the
Noteholders, each other Agent and any stock or securities exchange or other
relevant authority on which the Notes are listed, quoted and/or traded of:
(i)
each Interest Rate, the amount of interest payable and each other amount,
item or date calculated or determined by it together with the Interest
Payment Date; and
(ii)
any amendment to any amount, item or date referred to in paragraph (i)
arising from any extension or reduction in any Interest Period or calculation
period.
(b)
The Calculation Agent must give notice under this Condition 10.4 as soon as
practicable after it makes its determination. However, it must give notice of each
Interest Rate, the amount of interest payable and each Interest Payment Date by the
fourth day of the Interest Period.
(c)
The Calculation Agent may amend its determination of any amount, item or date (or
make appropriate alternative arrangements by way of adjustment) as a result of the
extension or reduction of the Interest Period or calculation period without prior notice
but must notify the Issuer, the Note Trustee, the Registrar, the Noteholders, each
other Agent and each stock or securities exchange or other relevant authority on
which the Notes are listed, quoted and/or traded after doing so.
Determination final
The determination by the Calculation Agent of all amounts, rates and dates falling to be
determined by it under these Conditions is, in the absence of wilful default, bad faith or
manifest or proven error, final and binding on the Issuer, the Note Trustee, the Registrar,
each Noteholder and each other Agent.
10.6
Rounding
For the purposes of any calculations required under these Conditions (unless otherwise
specified in the Pricing Supplement):
(a)
all percentages resulting from the calculations must be rounded, if necessary, to the
nearest four decimal points (with 0.00005 per cent. being rounded up to 0.0001 per
cent.);
(b)
all figures must be rounded to four decimal places (with 0.00005 being rounded up
to 0.0001); and
(c)
all amounts that are due and payable must be rounded (with halves being rounded
up) to:
(i)
in the case of Australian dollars, one cent; and
(ii)
in the case of any other currency, the lowest amount of that currency
available as legal tender in the country of that currency.
106
Part 6
Redemption and purchase
11
Redemption and purchase
11.1
Scheduled redemption
Each Note shall be redeemed by the Issuer on the Maturity Date at its Redemption Amount
unless:
11.2
(a)
the Note has been previously redeemed;
(b)
the Note has been purchased and cancelled; or
(c)
the Pricing Supplement states that the Note has no fixed Maturity Date.
Purchase
The Issuer and any of its Related Bodies Corporate may at any time purchase Notes in the
open market or otherwise and at any price. If purchases are made by tender, tenders must
be available to all Noteholders alike. Notes purchased under this Condition 11.2 may be
held, resold or cancelled at the discretion of the purchaser and, if the Notes are to be
cancelled, the Issuer, subject in all cases to compliance with any applicable laws or
directives. The Issuer will not be entitled to vote at any meeting of Noteholders in relation to
Notes it, or any of its Related Bodies Corporate, holds.
11.3
Early redemption for taxation reasons
The Issuer may redeem all (but not some) of the Notes of a Series in whole before their
Maturity Date at the Redemption Amount and any interest accrued on it to (but excluding) the
redemption date if the Issuer is required to pay an Additional Amount in respect of a Note.
However, the Issuer may only do so if:
(a)
the Issuer has given at least 30 days’ (and no more than 45 days’) notice to the Note
Trustee, the Registrar, the Noteholders, each other Agent and any stock exchange
or other relevant authority on which the Notes are listed;
(b)
before the Issuer gives notice of the proposed redemption under paragraph (a), the
Registrar has received:
(i)
a certificate signed by two Authorised Representatives of the Issuer; and
(ii)
an opinion of reputable legal advisers of recognised standing in the
jurisdiction of incorporation of the Issuer,
confirming that it would be required to pay an Additional Amount on the next
payment due in respect of the Notes;
(c)
in the case of Fixed Rate Notes, no notice of redemption is given earlier than 90
days before the earliest date on which the Issuer would be obliged to pay Additional
Amounts; and
(d)
in the case of Floating Rate Notes:
(i)
the proposed redemption date is an Interest Payment Date; and
107
(ii)
no notice of redemption is given earlier than 60 days before the Interest
Payment Date occurring immediately before the earliest date on which the
Issuer would be obliged to pay Additional Amounts.
The following Condition 11.4 applies to Notes only if the Pricing Supplement states that it applies.
11.4
Early redemption at the option of the Issuer (Issuer call)
If the Pricing Supplement states that the Issuer may redeem all or some of the Notes of a
Series before their Maturity Date under this Condition 11.4, the Issuer may redeem so many
of the Notes specified in the Pricing Supplement at the Redemption Amount and any interest
accrued on it to (but excluding) the redemption date.
However, the Issuer may only do so if:
(a)
the amount of Notes to be redeemed is, or is a multiple of, their denomination
specified in the relevant Pricing Supplement;
(b)
the Issuer has given at least 15 days’ (and no more than 30 days’) or any other
period specified in the Pricing Supplement notice to the Note Trustee, the Registrar,
the Noteholders, each other Agent and any stock or securities exchange or other
relevant authority on which the Notes are listed, quoted and/or traded;
(c)
the proposed redemption date is an Early Redemption Date (Call) specified in the
Pricing Supplement; and
(d)
any other condition specified in the Pricing Supplement is satisfied.
The following Condition 11.5 applies to Notes only if the Pricing Supplement states that it applies.
11.5
Early redemption at the option of Noteholders (Noteholder put)
If the Pricing Supplement states that a Noteholder may require the Issuer to redeem all or
some of the Notes of a Series held by that Noteholder before their Maturity Date, the Issuer
must redeem the Notes specified by the Noteholder at the Redemption Amount and any
interest accrued on it to (but excluding) the date of redemption if the following conditions are
satisfied:
(a)
the amount of Notes to be redeemed is, or is a multiple of, their Denomination;
(b)
the Noteholder has given at least 30 days’ (and no more than 60 days’) or any other
period specified in the Pricing Supplement notice to the Issuer, the Note Trustee, the
Registrar and each other Agent by delivering to the Registrar during normal business
hours a completed and signed redemption notice in the form obtainable from the
Specified Office of the Registrar together with any evidence the Registrar may
require to establish title of the Noteholder to the Note;
(c)
the notice referred to in paragraph (b) specifies an account in the country of the
currency in which the Note is denominated to which the payment should be made or
an address to where a cheque for payment should be sent;
(d)
the proposed redemption date is an Early Redemption Date (Put) as specified in the
Pricing Supplement; and
(e)
any other conditions specified in the Pricing Supplement are satisfied.
108
A Noteholder may not require the Issuer to redeem any Note under this Condition 11.5 if the
Issuer has given notice that it will redeem the Note under Condition 11.3 (“Early redemption
for taxation reasons”) or Condition 11.4 (“Early redemption at the option of the Issuer (Issuer
call)”).
11.6
Mandatory early redemption
If, in respect of an event described in clause 5.1 (“Mandatory prepayments”) of the Security
Trust Deed, the Issuer (or the Security Trustee) is required to pay an amount under clause
5.1 (“Mandatory prepayments”) and clause 5.2(c) (“Distribution of mandatory prepayments”)
of the Security Trust Deed to the Noteholders (or the Note Trustee for the account of the
Noteholders) (“Available Amount”), the Issuer must, for each Noteholder, redeem such
number of the Notes held by that Noteholder (at the Early Redemption Amount (including
accrued but unpaid interest, if any, to (but not including) the redemption date)) which is equal
to the amount calculated by:
(a)
(b)
multiplying:
(i)
the Available Amount; and
(ii)
the fraction representing the outstanding principal amount of the Notes held
by that Noteholder divided by the outstanding principal amount of all Notes;
and
dividing the result of (a) by 10,000 (or such other denomination of the Notes).
If this does not produce a whole number, it will be rounded down to the nearest whole
number.
For the avoidance of doubt: (1) the Available Amount will be applied towards the redemption
of the relevant Notes in accordance with this Condition; and (2) the redemption of the
relevant Notes in accordance with this Condition will occur on the date the Note Trustee
distributes the Available Amount to the Noteholders in accordance with clause 5.2(d)
(“Distribution of mandatory prepayments”) of the Security Trust Deed.
11.7
Partial redemptions
If only some of the Notes are to be redeemed under Condition 11.4 (“Early redemption at the
option of the Issuer (Issuer call)”), the Notes to be redeemed will be specified in the notice
and selected:
11.8
(a)
in a fair and reasonable manner; and
(b)
in compliance with any applicable laws or directive and the requirements of any
applicable Clearing System and stock or securities exchange or other relevant
authority on which the Notes are listed.
Effect of notice of redemption
Any notice of redemption given under this Condition 11 (“Redemption and purchase”) is
irrevocable.
109
11.9
Calculation of Early Redemption Amounts
Unless otherwise specified, the Redemption Amount payable on redemption at any time
before the Maturity Date of a Note is an amount equal to the sum of the outstanding principal
amount and interest (if any) accrued on it.
11.10
Late payment
If an amount payable is not paid under this Condition 11 (“Redemption and purchase”) when
due, then for a Note, interest continues to accrue on the unpaid amount (both before and
after any demand or judgment) at the default rate specified in the Pricing Supplement (or, if
no default rate is specified, the last applicable Interest Rate) until the date on which payment
is made to the Noteholder.
11.11
Clean-up Call
(a)
If a Clean Up Condition subsists, the Issuer may redeem all (but not some) of the
Notes whole before their Maturity Date at the aggregate Redemption Amount being
par plus accrued interest for the Notes being so redeemed.
(b)
The Issuer may only redeem a Note under paragraph (a) if:
(c)
(i)
the proposed redemption date nominated by the Issuer is a scheduled
Interest Payment Date; and
(ii)
the Issuer has given at least 14 days’ (and not more than 40 days’) prior
notice of the redemption to the Note Trustee, the Registrar, the relevant
Noteholders, each Agent and, if listed, the stock or securities exchange or
other relevant authority on which the Notes are listed.
In this Condition 11.11, “Clean Up Condition” means, in respect of a Series, that, at
any time, the aggregate outstanding principal amount of the Notes of that Series that
have not been redeemed is less than 10% of the aggregate outstanding principal
amount of all of the Notes issued under that Series.
12
Events of default
12.1
Events of Default
An Event of Default occurs in relation to a Series of Notes if:
(a)
non-payment: the Issuer fails to pay any amount payable by it in respect of the
Notes in that Series within 5 Business Days of its due date for payment;
(b)
other obligations: the Issuer breaches, or fails to fully observe or perform, any of its
obligations or undertakings under or in connection with the Notes in that Series or
any Note Document for that Series (other than the obligations and undertakings
referred to in Condition 12.1(a)) and if the breach or failure is capable of remedy, the
breach or failure is not remedied by the date 20 Business Days after the earlier of:
(i)
the date the Issuer receives notice requiring remedy of the breach or failure
from the Note Trustee; and
(ii)
the date the Issuer becomes aware of the breach or failure;
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(c)
cross acceleration: under the terms of any Finance Debt of a Westlink Entity, an
amount greater than A$50,000,000 becomes due and repayable before its
scheduled maturity by reason of an event of default (howsoever described) or is not
satisfied when due;
(d)
Project Deed: RMS terminates the Project Deed;
(e)
PAFA Act Guarantee: the Crown in Right of the State of New South Wales
terminates the PAFA Act Guarantee and it is not replaced within 20 Business Days;
(f)
RMS Consent Deed: RMS terminates the RMS Consent Deed and it is not replaced
within 20 Business Days;
(g)
Project: The Issuer or any Westlink Entity ceases, or threatens to cease, to carry on
all or a substantial part of the Project;
(h)
abandonment: The Westlink Motorway Partnership or WSO Co Pty Ltd abandons
the Project;
(i)
compulsory acquisition:
(i)
All or any substantial part of the Secured Property or the Project is
compulsorily acquired by or by order of a Government Agency or under law;
or
(ii)
a Government Agency orders the sale, vesting or divesting of all or any
substantial part of the Secured Property or the Project;
(j)
insolvency: an Insolvency Event occurs in relation to a Westlink Entity;
(k)
enforcement against assets:
(i)
A Controller, Receiver or similar officer is appointed to all or any of the
assets and undertaking of a Westlink Entity;
(ii)
Either:
(A)
a Security Interest is enforced over; or
(B)
a distress, attachment or other execution is levied or enforced over,
all or any of the assets and undertaking of a Westlink Entity for an amount
totalling more than $20,000,000;
(l)
analogous process: Anything analogous to anything referred to in Condition 12.1(j)
and 12.1(k), or which has a substantially similar effect, occurs with respect to a
Westlink Entity under any overseas law or any law which commences or is amended
after the Issue Date for that Series;
(m)
judgment: Any judgment is obtained against a Westlink Entity for an amount in
excess of A$20,000,000 and that judgment is not:
(i)
satisfied or stayed within 15 Business Days; or
(ii)
being appealed by the relevant Westlink Entity in good faith;
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(n)
invalidity:
(i)
any Finance Document for that Series; or
(ii)
the Project Deed, the RMS Consent Deed or the PAFA Guarantee,
becomes void, voidable, illegal, invalid, unenforceable or of limited force and effect
(and, in the case of the RMS Consent Deed, the PAFA Act Guarantee or a Finance
Document other than a Note Document, that is not remedied within 20 Business
Days); and
(o)
Westlink Entity Trusts: in respect of a Westlink Entity Trust:
(i)
a new or additional trustee of the Westlink Entity Trust (other than the
relevant Westlink Entity Trustee) is appointed;
(ii)
the beneficiaries resolve to wind up the Westlink Entity Trust, or the relevant
Westlink Entity Trustee is required to wind up the Westlink Entity Trust
under the relevant Westlink Entity Trust Deed or applicable law, or the
winding up of the Westlink Entity Trust commences;
(iii)
the Westlink Entity Trust is held or is conceded by the relevant Westlink
Entity Trustee not to have been constituted or to have been imperfectly
constituted;
(iv)
the relevant Westlink Entity Trustee ceases to be authorised under the
relevant Westlink Entity Trust to hold the property of the relevant Westlink
Entity Trust in its name and to perform its obligations under the Finance
Documents; or
(v)
the relevant Westlink Entity Trustee ceases to be entitled to be indemnified
out of the assets of the relevant Westlink Entity Trust in respect of its
obligations under the Finance Documents or to have a lien over them,
except in the case of paragraph (i), if the new or additional trustee agrees to become
a party to all the Finance Documents to which the relevant Westlink Entity Trustee is
or was a party within 90 days of the appointment.
12.2
Consequences of an Event of Default
If the Note Trustee is notified or otherwise has knowledge of an Event of Default which is
subsisting, the Note Trustee must, subject to clause 14.3 of the Note Trust Deed:
(a)
in the case of an Event of Default under Condition 12.1(a) (“non-payment”),
Condition 12.1(d) (“Project Deed”), Condition 12.1(h) (“abandonment”) or Condition
12.1(j) (“insolvency”), give written notice to the Security Trustee of that Event of
Default in accordance with clause 9.1(a) (“Notice of an Event of Default”) of the
Security Trust Deed;
(b)
convene a meeting of the Noteholders; and
(c)
if and only if so directed by Noteholders holding at least 10% of the principal amount
of the Notes of a Series (which will be a “requisite number of Beneficiaries” for the
purposes of clause 9.2(b) (“Acceleration”) of the Security Trust Deed and a
“Requisite Majority” for the purposes of clause 9.3(b) (“Appointment of
administrator”) of the Security Trust Deed):
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12.3
(i)
by written notice (“Acceleration Notice”), declare in respect of that Series
the Redemption Amount (together with all accrued interest and all other
amounts payable under each Note of that Series) to be due and payable
immediately or on such other date specified in the notice; and
(ii)
give written notice to the Security Trustee of the delivery of the Acceleration
Notice in accordance with clause 9.1(b) (“Notice of an Event of Default”) of
the Security Trust Deed; and
(iii)
if permitted to do so in accordance with the Security Trust Deed, give an
instruction to the Security Trustee under clause 9.3(b) (“Appointment of
administrator”) of the Security Trust Deed.
Notification
If an Event of Default occurs, the Issuer must promptly after becoming aware of it notify the
Note Trustee of the occurrence of the Event of Default (specifying details of it).
12.4
12.5
No individual enforcement
(a)
Subject to paragraph (b), the Noteholders hold all rights through the Note Trust (as
defined in the Note Trust Deed) and do not have any direct rights to enforcement
against the Issuer.
(b)
A Noteholder may enforce its rights directly against the Issuer if the Note Trustee,
having become bound to do so, fails to enforce its rights against the Issuer within a
reasonable period.
Action by the Note Trustee for Event of Default
The Note Trustee:
(a)
is under no obligation to monitor or make enquiries as to whether an Event of
Default has occurred;
(b)
will rely only on the direction of the Noteholders, notification by the Security Trustee
or notification by the Issuer in determining whether an Event of Default has occurred,
and the Note Trustee is not to be regarded as having knowledge of the occurrence
of an Event of Default in the absence of such direction or notification;
(c)
must promptly notify the Noteholders if it becomes aware of the occurrence of an
Event of Default under paragraph (b) above;
(d)
will rely only on the direction of the Noteholders in determining whether to declare
the Redemption Amount due and payable in accordance with Condition 12.2
(“Consequences of an Event of Default”);
(e)
is not (in the absence of negligence, fraud or wilful misconduct by the Note Trustee
or any of its Related Bodies Corporate or any of their respective officers, agents,
employees or delegates) responsible to the Issuer or any other party for the
consequences of any action it takes, upon the instructions of the Noteholders or
pursuant to an Extraordinary Resolution, Special Quorum Resolution or an Ordinary
Resolution; and
113
(f)
Part 7
is not taken to have knowledge or to be aware of the passing of an Extraordinary
Resolution, Special Quorum Resolution or an Ordinary Resolution referred to in
paragraph (e) unless:
(i)
it has convened or attended the meeting at which such resolution was
passed; or
(ii)
it receives a copy of such resolution certified as true and correct by the
chairman of the meeting at which such resolution was passed; or
(iii)
in the case of such a resolution passed in writing, it has been presented with
the instrument or instruments by which the resolution was passed for entry
into the minute books.
Payments
13
General provisions
13.1
Summary of payment provisions
Payments in respect of the Notes will be made in accordance with Condition 14 (“Payments
on Notes”).
13.2
Payments subject to law
All payments are subject to applicable law, but without prejudice to the provisions of
Condition 15 (“Taxation”).
13.3
Payments on Business Days
If a payment:
(a)
is due on a Note on a day which is not a Business Day then the due date for
payment will be adjusted in accordance with the applicable Business Day
Convention; or
(b)
is to be made to an account on a Business Day on which banks are not open for
general banking business in the place in which the account is located, then the due
date for payment will be the first following day on which banks are open for general
banking business in that place,
and in either case, the Noteholder is not entitled to any additional payment in respect of that
delay unless there is a subsequent failure to pay in accordance with these Conditions, in
which event interest shall continue to accrue in accordance with these Conditions.
14
Payments on Notes
14.1
Payment of principal
Payments of the principal in respect of a Note will be made to each person registered at
10.00am (Sydney time) on the payment date as the holder of a Note.
114
14.2
Payment of interest
Payments of interest in respect of a Note will be made to each person registered at the close
of business on the Record Date as the holder of that Note.
14.3
Payments to accounts
Payments in respect of the Note will be made in Australia, unless prohibited by law, and:
(a)
(b)
if the Note is held in the Austraclear System, by crediting on the payment date, the
amount due to:
(i)
the account of Austraclear (as the Noteholder) in Australia previously
notified to the Issuer and the Registrar; or
(ii)
if requested by Austraclear, the accounts in Australia of the persons in
whose Security Record (as defined in the Austraclear Regulations) a Note is
recorded as previously notified by Austraclear to the Issuer and the
Registrar in accordance with Austraclear Regulations; and
if the Note is not held in the Austraclear System, by crediting on the payment date,
the amount then due under each Note to an account in Australia previously notified
by the Noteholder to the Issuer and the Registrar.
If a payment in respect of the Note is prohibited by law from being made in Australia, such
payment will be made in an international financial centre for the account of the relevant
payee, and on the basis that the relevant amounts are paid in immediately available funds,
freely transferable at the order of the payee.
14.4
Payments by cheque
If a Noteholder has not notified the Registrar of an account to which payments to it must be
made by the close of business on the Record Date, payments in respect of the Note will be
made in Australia by cheque drawn on a bank in Australia sent by prepaid post on the
Business Day immediately before the payment date, at the risk of the Noteholder, to the
Noteholder (or to the first named joint holder of the Note) at its address appearing in the
Register at the close of business on the Record Date. Cheques sent to the nominated
address of a Noteholder will be taken to have been received by the Noteholder on the
payment date and, no further amount will be payable by the Issuer in respect of the Notes as
a result of the Noteholder not receiving payment on the due date.
15
Taxation
15.1
No set-off, counterclaim or deductions
All payments in respect of the Notes must be made in full without set-off or counterclaim, and
without any withholding or deduction in respect of Taxes, unless required by law or made
under or in connection with, or in order to ensure compliance with FATCA.
15.2
Additional amounts
Subject to Condition 15.3 (“Exceptions to payment of additional amounts”), if a law requires
the Issuer to withhold or deduct an amount in respect of Taxes from a payment in respect of
the Notes such that the Noteholder would not actually receive on the due date the full amount
provided for under the Notes, then:
115
15.3
(a)
the Issuer agrees to deduct the amount for the Taxes (and any further withholding or
deduction applicable to any further payment due under paragraph (b) below) and the
Issuer may do so; and
(b)
if the amount deducted or withheld is in respect of Taxes imposed by a Relevant Tax
Jurisdiction, the Issuer shall pay such additional amounts as may be necessary so
that, after making the deduction and any further deductions applicable to additional
amounts payable under this Condition 15.2, each Noteholder receives (at the time
the payment is due) the amount it would have received if no deductions or
withholdings had been required to be made.
Exceptions to payment of additional amounts
No Additional Amounts are payable under Condition 15.2(b) (“Additional amounts”) in respect
of any Notes:
(a)
to, or to a third party on behalf of, a Noteholder who is liable to such Taxes in
respect of such Notes by reason of that person having some connection with a
Relevant Tax Jurisdiction other than the mere holding of such Notes or receipt of
payment in respect of the Notes provided that a Noteholder shall not be regarded as
having a connection with Australia for the reason that the Noteholder is a resident of
Australia within the meaning of the Australian Tax Act where, and to the extent that,
such taxes are payable by reason of section 128B(2A) of the Australian Tax Act;
(b)
to, or to a third party on behalf of, a Noteholder who could lawfully avoid (but has not
so avoided) such Taxes by complying or procuring that any third party complies with
any statutory requirements or by making or procuring that any third party makes a
declaration of non-residence or similar case for exemption to any tax authority;
(c)
to, or to a third party on behalf of, a Noteholder who is an Offshore Associate of the
Issuer and not acting in the capacity of a clearing house, paying agent, custodian,
funds manager or responsible entity of a registered scheme within the meaning of
the Corporations Act;
(d)
to, or to a third party on behalf of an Australian resident Noteholder or a non-resident
Noteholder, if that Noteholder has not supplied an appropriate tax file number, an
Australian business number (if applicable) or other exemption details;
(e)
to, or to a third party on behalf of, a Noteholder where the withholding or deduction is
required by reason of the Australian Commissioner of Taxation giving a notice under
section 255 of the Australian Tax Act or section 260-5 of Schedule 1 to the Taxation
Administration Act 1953 of Australia;
(f)
presented for payment (to the extent that presentation is required) or otherwise
arranging to receive payment more than 30 days after the relevant payment date
except to the extent that the holder thereof would have been entitled to such
additional amounts on presenting the same for payment (to the extent that
presentation is required), or otherwise arranging to receive payment, on the thirtieth
such day;
(g)
to, or to a third party on behalf of, a Noteholder in respect of a Tax imposed on or
calculated having regard to, the net income of the person;
116
15.4
(h)
to, or to a third party on behalf of, a Noteholder in respect of any estate, inheritance,
gift, sale, transfer, personal property, or similar tax, duty, assessment or
governmental charge;
(i)
where such withholding or deduction is made under or in connection with, or in order
to ensure compliance with FATCA (as withheld or deducted by the Issuer, an Agent
or any other party); or
(j)
in such other circumstances as may be specified in the Pricing Supplement.
Stamp taxes
The Issuer is not required to pay, or reimburse the Note Trustee or any Noteholder for, any
stamp duty (or any interest, fines, penalties or expenses in connection with it) assessed or
payable in connection with any transfer or redemption of any Notes. The relevant Noteholder
must pay that stamp duty (and any interest, fines, penalties and expenses in connection with
it).
16
Time limit for claims
A claim against the Issuer for a payment under a Note is void unless made within 10 years
(in the case of principal) or 5 years (in the case of interest and other amounts) from the date
on which payment first became due.
Part 8
General
17
Agents
17.1
Role of Agents
In acting under an Agency Agreement, each Agent acts solely as agent of the Issuer and
does not assume any obligations towards or relationship of agency or trust for or with any
Noteholder except that, any funds received by an applicable Agent may, pending their
application in accordance with the relevant Agency Agreement, be held by such Agent on
trust for the benefit of the persons entitled to them.
17.2
Appointment and replacement of Agents
Each initial Agent for a Series of Notes is specified in the Pricing Supplement. Subject to
Condition 17.4 (“Required Agents”), the Issuer reserves the right at any time to vary or
terminate the appointment of any Agent and to appoint a successor.
17.3
Change of Agent
Notice of any change of an Agent or its Specified Office must promptly be given to the
Noteholders by the Issuer or the Agent on its behalf.
17.4
Required Agents
The Issuer must, in respect of each Series of Notes:
(a)
at all times during which Notes are outstanding, maintain a Registrar; and
117
(b)
18
if a Calculation Agent is specified in the Pricing Supplement, at all times maintain a
Calculation Agent.
Meetings of Noteholders
The Meetings Provisions contain provisions (which have effect as if incorporated in full in
these Conditions) for convening meetings of the Noteholders of any Series to consider any
matter affecting their interests, including any variation of these Conditions by Ordinary
Resolution, Extraordinary Resolution or Special Quorum Resolution. The Issuer will not be
entitled to vote at any meeting of Noteholders in relation to any Notes it holds.
19
Variation
19.1
Variation with consent
Unless expressly provided otherwise in these Conditions or the Note Trust Deed, or if
Condition 19.2 (“Variation without consent”) applies, any Condition may be varied by the
Issuer in accordance with the Meetings Provisions.
19.2
Variation without consent
Any Condition may be amended by agreement between the Issuer and the Note Trustee
without the consent of the Noteholders if, in the reasonable opinion of the Note Trustee, the
amendment:
20
(a)
is of a formal, minor or technical nature;
(b)
is made to correct a manifest error;
(c)
is made to cure any ambiguity or correct or supplement any defective or inconsistent
provision and, in the reasonable opinion of the Issuer, is not materially prejudicial to
the interests of the Noteholders;
(d)
is to comply with mandatory provisions of the law of the jurisdiction in which the
Issuer is incorporated; or
(e)
only applies to Notes issued by it after the date of amendment.
Further issues
The Issuer may from time to time, without the consent of the Note Trustee or the
Noteholders, create and issue further Notes having the same Conditions as the Notes of any
Series in all respects (or in all respects except for the Issue Price, the Issue Date and the
first Interest Payment Date) so as to form a single series with the Notes of that Series.
118
21
Notices
21.1
Notices to Noteholders
A notice or other communication to a Noteholder in connection with a Note must be in writing
and may be given by:
21.2
(a)
an advertisement published in the Australian Financial Review, The Australian or
any other newspaper or newspapers circulating in Australia generally or, if an
additional or alternate newspaper is specified in the relevant Pricing Supplement,
that newspaper;
(b)
prepaid post (airmail if posted to or from a place outside Australia) or delivery to the
address of the Noteholder as shown in the Register at 5.00pm (local time in the
place where the Register is kept) 3 Business Days before the dispatch of the
relevant notice or communication; or
(c)
a notice posted on an electronic service generally accepted for notices of that type.
Notices to the Issuer, the Note Trustee and the Agents
All notices and other communications to the Issuer, the Note Trustee or an Agent must be in
writing and may be given by:
21.3
(a)
prepaid post (airmail, if appropriate) to or left at, the Specified Office of the Issuer,
the Note Trustee or the Agent;
(b)
facsimile to the relevant facsimile number specified in the “Directory” section of the
Information Memorandum or any other facsimile number notified to Noteholders
from time to time; or
(c)
email to the relevant email address specified in the “Directory” section of the
Information Memorandum or any other email address notified to Noteholders from
time to time.
When effective
A notice or other communication is regarded as given and received (and regarded as
effective):
(a)
if it is delivered or sent by facsimile:
(i)
by 5.00 pm (local time in the place of receipt) on a Business Day - on that
day; or
(ii)
after 5.00 pm (local time in the place of receipt) on a Business Day, or on a
day that is not a Business Day - on the next Business Day,
provided that the machine from which it is sent produces a report that states that it
was sent in full, unless the recipient has notified the sender that it has not received
all pages in legible form;
(b)
if it is sent by mail:
(i)
within Australia – 3 Business Days after posting;
119
(c)
(ii)
to or from a place outside Australia – 7 Business Days after posting;
(iii)
in the case of publication – the date of such publication; or
(iv)
in the case of an electronic service – on the date posted on such electronic
service; and
if it is sent by email – the earlier of:
(i)
(ii)
21.4
the time the sender receives an automated message (other than an “out of
the office” message or a message accompanied by an “out of the office”
message) confirming delivery to:
(A)
in the case of a recipient party with one email address applicable to
it, that email address; or
(B)
in the case of a recipient party with more than one email address
applicable to it, any one such email address; or
the time the recipient receives the email in legible form.
Receipt outside business hours
Notwithstanding Condition 21.3 (When Effective”), if communications are received or taken
to be received after 5.00 pm in the place of receipt or on a non-Business Day, they are taken
to be received at 9.00 am on the next Business Day and take effect from that time unless a
later time is specified
22
Governing law
22.1
Governing law
The Notes are governed by, and construed in accordance with, the law in force in New South
Wales, Australia.
22.2
Jurisdiction
The Issuer irrevocably and unconditionally submits, and each Noteholder is taken to have
submitted, to the non-exclusive jurisdiction of the courts of New South Wales and the courts
of appeal from them. The Issuer waives any right it has to object to an action being brought
in those courts of New South Wales including by claiming that the action has been brought in
an inconvenient forum or that those courts do not have jurisdiction.
22.3
Serving documents
Without preventing any other method of service, any document in any action may be served
on the Issuer or a Noteholder by being delivered or left at their registered office or address or
principal place of business.
120
Form of Pricing Supplement
The Pricing Supplement to be issued in respect of each Tranche of Notes will be substantially in the
form set out below.
Pricing Supplement
Series No.:
[●]
Tranche No.:
[●]
WSO Finance Pty Limited
(ABN 60 102 757 871)
A$[●] Medium Term Note Programme
Issue of
[A$[●]]
[Fixed Rate/Floating Rate] (“Notes”) due [●]
The date of this Pricing Supplement is [●].
This Pricing Supplement (as referred to in the Information Memorandum dated [●] (“Information
Memorandum”) in relation to the above Programme) relates to the Tranche of Notes referred to above.
It is supplementary to, and should be read in conjunction with the terms and conditions of the Notes
contained in the Information Memorandum (“Conditions”), the Information Memorandum and the Note
Trust Deed dated [●] 2013 between the Issuer and the Note Trustee (“Note Trust Deed”).
Unless otherwise indicated, terms defined in the Conditions have the same meaning when used in this
Pricing Supplement.
This Pricing Supplement does not constitute, and may not be used for the purposes of, an offer or
solicitation by anyone in any jurisdiction in which such offer or solicitation is not authorised or to any
person to whom it is unlawful to make such offer or solicitation. No action is being taken to permit an
offering of the Notes or the distribution of this Pricing Supplement in any jurisdiction where such action is
required.
The particulars to be specified in relation to the Tranche of Notes referred to above are as follows:
1
Issuer:
WSO Finance Pty Limited
(ABN 60 102 757 871)
2
Type of Issue:
[Insert “Syndicated Issue” or “Private Issue” as
applicable]
3
Subscribing Dealer(s):
[Insert name]
4
Lead Manager(s):
[Insert name(s)]
5
Registrar and Issuing and Paying
Agent:
[Insert name and address]
121
6
Calculation Agent:
[Insert name and address]
7
If to form a single Series with an
existing Series, specify date on
which all Notes of the Series become
fungible (if not the Issue Date):
[Details of the existing Series and the date on
which the Notes become fungible]
8
Initial Outstanding Principal Amount
of Tranche:
[Insert amount]
9
Specified Currency
[Insert Specified Currency (if any)]
10
Issue Date:
[Insert date]
11
Maturity Date:
[Insert date]
12
Issue Price:
[Insert]% of the initial Outstanding Principal
Amount [plus accrued interest from [insert date]
(in the case of fungible issues or a typical first
coupon, if applicable)]
13
Denomination:
[A$10,000] [insert denomination]
14
Status of Notes:
[Secured and unsubordinated obligations of the
Issuer.]
15
Type of Notes:
16
(a)
Fixed Rate:
[Yes/No]
(b)
Floating Rate:
[Yes/No]
If the Notes are Fixed Rate, specify:
Condition 8 (“Fixed Rate Notes”) is [Insert either
“Applicable” or “Not applicable”]
(a)
Fixed Coupon Amount:
[Insert Fixed Coupon Amount]
(b)
Interest Rate(s):
[Insert fixed rate]% per annum
(c)
Interest Commencement Date:
[Insert either a date or “Issue Date”]
(d)
Interest Payment Dates:
[Insert dates]
(e)
Business Day Convention:
[Insert
either
“Following
Business
Day
Convention”, “Modified Following Business Day
Convention”,
“Preceding
Business
Day
Convention” or “No Adjustment” or give details of
other convention]
(f)
Day Count Fraction:
[Insert applicable day count fraction] (if none
specified, the Day Count Fraction will be
Actual/365 (Fixed) (as defined in the Conditions of
the Notes set out in the Information
Memorandum))
122
17
If the Notes are Floating Rate,
specify:
Condition 9 (“Floating Rate Notes”) is [Insert either
“Applicable” or “Not applicable”]
(a)
Interest Commencement Date:
[Insert either a date or “Issue Date”]
(b)
Interest Rate:
[eg The aggregate of the 3 month [Bank Bill Rate]
and the Margin. Also specify if [Bank Bill Rate
Determination], ISDA Determination or Screen
Rate Determination applies]
(c)
Interest Payment Dates or
Specified Period:
[Insert dates]
(d)
Business Day Convention:
[Insert either “Floating Rate Convention”,
“Following Business Day Convention”, “Modified
Following Business Day Convention”, “Preceding
Business Day Convention”, or “No Adjustment” or
give details of other convention]
(e)
Margin:
[Insert]% per annum (state if positive or negative)
(f)
Day Count Fraction:
[Insert applicable day count fraction] (if none
specified, the Day Count Fraction will be
Actual/365 (Fixed) (as defined in the Conditions of
the Notes set out in the Information
Memorandum))
(g)
Minimum/Maximum Interest
Rate:
[Insert “Not Applicable” or, alternatively, insert “[
]% per annum”]
(h)
Linear Interpolation:
[Insert either “Not Applicable” or “Applicable”]
[If ISDA Determination applies, specify]
(h)
Floating Rate Option:
[●]
(i)
Designated Maturity:
[●]
(j)
Reset Date:
[●]
[If Screen Rate Determination applies, specify]
(k)
Relevant Financial Centre:
[●]
(l)
Relevant Screen Page:
[●]
(m)
Relevant Time:
[●]
(n)
Reference Rate:
[●]
(o)
Reference Banks:
[If none are specified, the Reference Banks will be
four major banks specified by the Calculation
Agent in the inter-bank market that is most closely
connected with the Reference Rate]
(p)
Interest Determination Date:
[●]
123
18
19
Early Redemption (Issuer call):
(a)
Are the Notes redeemable
before their Maturity Date at
the option of the Issuer under
Condition 11.4?:
[Insert either “Yes” or “No”]
(b)
Early Redemption Date (Call):
[Insert]
(c)
Redemption Amount
[Insert]
(d)
Specify notice period for the
exercise of the call option:
[Insert]
(e)
Specify any relevant
conditions to exercise of
option:
[Insert]
Early Redemption (Noteholder put):
(a)
Are the Notes redeemable
before their Maturity Date at
the option of the Noteholder
under Condition 11.5?:
[Insert either “Yes” or “No”]
(b)
Early Redemption Date (Put):
[Insert]
(c)
Redemption Amount
[Insert]
(d)
Specify notice period for the
exercise of the put option:
[Insert]
(e)
Specify any relevant
conditions to exercise of
option:
[Insert]
20
Relevant Financial Centres:
[Insert “None” or specify any Relevant Financial
Centres]
21
Other relevant Conditions:
[Insert “None” or specify any Conditions to be
altered, varied, deleted otherwise than as provided
above and also any additional Conditions to be
included.]
22
ISIN:
[Insert]
23
Common Code:
[Insert]
124
24
Selling and distribution restrictions:
[The selling and distribution restrictions set out in
the section entitled Selling Restrictions in the
Information Memorandum apply in respect of the
offer and sale of the Notes.
In particular, but without limitation, the Notes may
only be offered for issue in Australia where (i) the
aggregate consideration payable by each offeree
is at least A$500,000 (or its equivalent in an
alternate currency, in either case, disregarding
moneys lent by the offeror or its associates) or
the offer or invitation does not otherwise require
disclosure to investors under Parts 6D.2 or 7.9 of
the Corporations Act; (ii) such action complies
with any applicable laws, regulations and
directives (including, without limitation, the
licensing requirements set out in Chapter 7 of the
Corporations Act) in Australia; (iii) the offer or
invitation does not constitute an offer to a “retail
client” as defined for the purposes of section
761G of the Corporations Act; and (iv) such
action does not require any document to be
lodged with ASIC.]
[Specify any variation to the selling and distribution
restrictions]
25
Listing:
[Insert either “None”, “ASX” or specify details of
some other stock exchange]
26
Rating:
[Insert credit rating/Not rated]
27
Clearing system:
[Austraclear/Euroclear/Clearstream,
Luxembourg/specify any other clearing system]
28
Additional information:
[Insert]
RESPONSIBILITY
The Issuer accepts responsibility for the information contained in this Pricing Supplement.
Signed for and on behalf of
WSO Finance Pty Limited
By: ........................................................
Name:
Authorised Officer:
125
Selling Restrictions
Pursuant to the Dealer Agreement dated on or about 3 June 2016, as amended and supplemented
from time to time (“Dealer Agreement”), Notes will be offered by the Issuer through one or more
Dealers. The Issuer will have the sole right to accept any such offers to purchase Notes and may
reject any such offer in whole or (subject to the terms of such offer) in part. Each Dealer has the
right, in its discretion reasonably exercised, to reject any offer to purchase Notes made to it in whole
or (subject to the terms of such offer) in part. The Issuer is entitled under the Dealer Agreement to
appoint one or more Dealers as a dealer for a particular Tranche of Notes.
By its purchase and acceptance of Notes issued under the Dealer Agreement, each Dealer has
agreed (or will agree) that it will observe all applicable laws and regulations in any jurisdiction in which
it may subscribe for, offer, sell, transfer or deliver Notes, and it will not directly or indirectly offer, sell,
resell, re-offer, transfer or deliver Notes or distribute the Information Memorandum, any Pricing
Supplement, circular, advertisement or other offering material relating to the Notes in any country or
jurisdiction except under circumstances that will result in compliance with these selling restrictions
and all applicable laws and regulations.
Neither the Issuer or any of its affiliates, the Note Trustee, the Security Trustee, the Arrangers, the
Agents nor any of the Dealers have represented that any Notes 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 such sale.
Any additional restrictions on the sale and/or distribution of the Notes will be set out in the relevant
Pricing Supplement.
The following selling restrictions apply to Notes:
1
General
No action has been taken in any jurisdiction that would permit a public offering of any of the
Notes, or possession or distribution of the Information Memorandum or any other offering
material or any Pricing Supplement, in any country or jurisdiction where action for that
purpose is required.
Persons in whose hands this Information Memorandum comes are required by the Issuer,
the Arrangers and the Dealers to comply with all applicable laws, regulations and directives
in each country or jurisdiction in which they purchase, offer, sell, resell, reoffer or deliver
Notes or have in their possession or distribute or publish the Information Memorandum or
other offering material and to obtain any authorisation, consent, approval or permission
required by them for the purchase, offer, sale, reoffer, resale or delivery by them of any
Notes under any applicable law, regulation or directive in force in any jurisdiction to which
they are subject or in which they make such purchases, offers, sales, reoffers, resales or
deliveries, in all cases at their own expense, and neither the Issuer nor the Arrangers or any
Dealer has responsibility for such matters. In accordance with the above, any Notes
purchased by any person which it wishes to offer for sale or resale may not be offered in any
jurisdiction in circumstances which would result in the Issuer being obliged to register any
further prospectus or corresponding document relating to the Notes in such jurisdiction.
Each Dealer has represented and agreed, and each further Dealer appointed under the
Programme will be required to represent and agree, that, in connection with the primary
distribution of the Notes and unless the relevant Pricing Supplement otherwise provides, it
126
will not sell any Note to any person if, at the time of such sale, the employees or officers of
the Dealer directly involved in, the sale knew or had reasonable grounds to suspect that such
Note or an interest in such Note was being, or would later be, acquired (directly or indirectly)
by an associate of the Issuer within the meaning of section 128F(9) of the Income Tax
Assessment Act 1936 of Australia and associated regulations (and, where applicable, any
replacement legislation including, but not limited to, the Income Tax Assessment Act 1997 of
Australia), except as permitted in section 128F(5) of the Income Tax Assessment Act 1936
of Australia.
In particular, there are restrictions on the distribution of this Information Memorandum and
the offer or sale of Notes in Australia, New Zealand, the United Kingdom, the European
Economic Area, the United States of America, Hong Kong, Japan and Singapore as set out
below.
2
Australia
No prospectus or other disclosure document (as defined in the Corporations Act 2001 of
Australia (“Corporations Act”)) in relation to the Programme or any Notes has been, or will
be, lodged with the Australian Securities and Investments Commission (“ASIC”). Each
Dealer has represented and agreed and each further Dealer appointed under the
Programme will be required to represent and agree that unless the relevant Pricing
Supplement (or another supplement to any Information Memorandum) otherwise provides, it:
(a)
has not made or invited, and will not make or invite, an offer of the Notes 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 Information
Memorandum or other offering material or advertisement relating to any Notes in
Australia,
unless:
3
(i)
the aggregate consideration payable by each offeree is at least A$500,000
(or its equivalent in an alternate currency, in either case, disregarding
moneys lent by the offeror or its associates) or the offer or invitation does
not otherwise require disclosure to investors under Parts 6D.2 or 7.9 of the
Corporations Act;
(ii)
such action complies with applicable laws, regulations and directives
(including, without limitation, the licensing requirements set out in Chapter 7
of the Corporations Act) in Australia;
(iii)
the offer or invitation does not constitute an offer to a “retail client” as
defined for the purposes of section 761G of the Corporations Act; and
(iv)
such action does not require any document to be lodged with ASIC.
New Zealand
Each Dealer appointed under the Program will be required to represent and agree, that:
(a)
it has not offered or sold, and will not offer or sell, directly or indirectly, any Notes;
and
127
(b)
it has not distributed and will not distribute, directly or indirectly, any offering
materials or advertisement in relation to any offer of Notes,
in each case in New Zealand other than:
(i)
to persons who are “wholesale investors” as that term is defined in clauses
3(2)(a), (c) and (d) of Schedule 1 to the Financial Markets Conduct Act 2013
of New Zealand (“FMC Act”), being a person who is:
(A)
an “investment business”; or
(B)
“large”; or
(C)
a “government agency”,
in each case as defined in Schedule 1 to the FMC Act; or
(ii)
4
in other circumstances where there is no contravention of the FMC Act,
provided that (without limiting paragraph (i) above) Notes may not be offered
or transferred to any “eligible investors” (as defined in the FMC Act) or any
person that meets the investment activity criteria specified in clause 38 of
Schedule 1 to the FMC Act.
The United Kingdom
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 Notes which have 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 Notes other than to persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments (as principal or as 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 Notes would otherwise constitute a contravention of section 19 of the Financial
Services and Markets Act 2000, as amended (“FSMA”), by the Issuer;
(b)
it has complied and will comply with all applicable provisions of the FSMA with respect to
anything done by it in relation to any Notes in, from or otherwise involving the United
Kingdom; and
(c)
it has only communicated or caused to be communicated and will only communicate or
cause to be communicated any 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 such Notes in circumstances in which section 21(1) of the FSMA does not apply to
the Issuer.
5
European Economic Area
In relation to each Member State of the European Economic Area (”EEA State”) which has
implemented the Prospectus Directive (each, a “Relevant EEA State”), each Dealer has
represented and agreed, and each further Dealer appointed under the Programme will be
required to represent and agree, that with effect from and including the date on which the
Prospectus Directive is implemented in that Relevant EEA State (“Relevant Implementation
128
Date”) it has not made and will not make an offer of Notes which are the subject of the
offering contemplated by this Information Memorandum as completed by the Pricing
Supplement in relation thereto to the public in that Relevant EEA State except that it may,
with effect from and including the Relevant Implementation Date, make an offer of such
Notes to the public in that Relevant EEA State:
(a)
at any time to any legal entity which is a qualified investor as defined in the
Prospectus Directive;
(b)
at any time to fewer than 100 or, if the Relevant EEA State has implemented the
relevant provision of the 2010 PD Amending Directive, 150 natural or legal persons
(other than qualified investors as defined in the Prospectus Directive) subject to
obtaining the prior consent of the relevant Dealer or Dealers nominated by the Issuer
for any such offer; or
(c)
at any time in any other circumstances falling within Article 3(2) of the Prospectus
Directive,
provided that no such offer of Notes referred to in (a) to (c) above shall require the Issuer or
any Dealer to publish a prospectus pursuant to Article 3 of the Prospectus Directive or
supplement a prospectus pursuant to Article 16 of the Prospectus Directive.
For the purposes of this provision, the expression an “offer of Notes to the public” in
relation to any Notes in any Relevant EEA State means the communication in any form and
by any means of sufficient information on the terms of the offer and the Notes to be offered
so as to enable an investor to decide to purchase or subscribe for the Notes, as the same
may be varied in that Relevant EEA State by any measure implementing the Prospectus
Directive in that Relevant EEA State, the expression “Prospectus Directive” means
Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive,
to the extent implemented in the Relevant EEA State) and includes any relevant
implementing measure in the Relevant EEA State and the expression “2010 PD Amending
Directive” means Directive 2010/73/EU.
6
The United States of America
Regulation S; Category 1
The Notes have not been and will not be registered under the Securities Act 1933 of the
United States of America (“Securities Act”).
Terms used in the following paragraphs have the meanings given to them by Regulation S
under the Securities Act (“Regulation S”).
The Notes may not be offered, sold, delivered or transferred within the United States of
America, its territories or possessions or to, or for the account or benefit of, U.S. persons
except in accordance with Regulation S or in transactions exempt from the registration
requirements of the Securities Act.
Each Dealer has represented and agreed, and each further Dealer appointed under the
Programme will be required to represent and agree, that, except as permitted under the
Dealer Agreement, it will not offer, sell or deliver the Notes:
(a)
as part of their distribution at any time; and
129
(b)
otherwise until 40 days after completion of the distribution, as determined and
certified by the relevant Dealer or, in the case of an issue of Notes on a syndicated
basis, the Lead Manager,
within the United States of America or to, or for the account or benefit of, U.S. persons.
Each Dealer has represented and agreed, and each further Dealer appointed under the
Programme will be required to represent and agree, that it will have sent to each distributor
to which it sells Notes during the distribution compliance period a confirmation or other notice
setting forth the restrictions on offers and sales of the Notes within the United States of
America or to, or for the account or benefit of, U.S. persons.
Until 40 days after the completion of the distribution of all Notes of the Tranche of which
those Notes are a part, an offer or sale of Notes within the United States of America by any
Dealer or other distributor (whether or not participating in the offering) may violate the
registration requirements of the Securities Act if such offer or sale is made otherwise than in
accordance with an applicable exemption from registration under the Securities Act.
7
Hong Kong
The Notes have not been authorised by the Hong Kong Securities and Futures Commission.
Each Dealer has represented and agreed, and each further Dealer appointed under the
Programme will be required to represent and agree, that:
(a)
(b)
8
it has not offered or sold, and will not offer or sell, in Hong Kong, by means of any
document, any Notes other than:
(i)
to "professional investors" as defined in the Securities and Futures
Ordinance (Cap. 571) (as amended) of Hong Kong (“SFO”) and any rules
made under the SFO; or
(ii)
in other circumstances which do not result in the document being a
"prospectus" as defined in the Companies Ordinance (Cap 32) (as
amended) of Hong Kong (“CO”) or which do not constitute an offer to the
public within the meaning of the CO;
unless it is a person permitted to do so under the applicable securities laws of Hong
Kong, 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, (in each case whether
in Hong Kong or elsewhere) any advertisement, invitation, other offering material or
other document relating to the Notes, which is directed at, or the contents of which
are likely to be accessed or read by, the public in Hong Kong (except if permitted to
do so under the securities laws of Hong Kong) other than with respect to Notes
which are or are intended to be disposed of only to persons outside Hong Kong or
only to "professional investors" within the meaning of the SFO and any rules made
under the SFO.
Japan
The Notes 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 “Financial Instruments and
Exchange Act”) and, accordingly, each Dealer has represented and agreed, and each
further Dealer appointed under the Programme will be required to represent and agree, that it
130
has not offered or sold, and will not offer or sell, any Notes directly or indirectly in Japan or to,
or for the benefit of, any resident of Japan (which term as used herein means any person
resident in Japan, including any corporation or other entity organised under the laws of
Japan) or to others for re-offering or resale, directly or indirectly, in Japan or to, or for the
benefit of, any resident of Japan except pursuant to an exemption from the registration
requirements of, and otherwise in compliance with, the Financial Instruments and Exchange
Act and any other applicable laws and regulations of Japan.
9
Singapore
This Information Memorandum has not been and will not be registered as a prospectus with
the Monetary Authority of Singapore under the Securities and Futures Act, Chapter 289 of
Singapore, as amended (“Securities and Futures Act”).
Each Dealer has represented and agreed, and each further Dealer appointed under the
Programme will be required to represent and agree, that, unless an applicable Pricing
Supplement (or another supplement to this Information Memorandum) otherwise provides,
the Information Memorandum and any other document or material in connection with the
offer or sale, or invitation for subscription or purchase, of the Notes has not been and will not
be circulated or distributed by it nor have the Notes been, nor will the Notes be, offered or
sold by it, or be subject to an invitation for subscription or purchase by it, whether directly or
indirectly, to persons in Singapore other than:
(a)
to an institutional investor under Section 274 of the Securities and Futures Act;
(b)
to a relevant person pursuant to Section 275(1) of the Securities and Futures Act, or
any person pursuant to Section 275(1A) of the Securities and Futures Act, and in
accordance with the conditions specified in Section 275 of the Securities and
Futures Act; or
(c)
otherwise pursuant to, and in accordance with the conditions of, any other applicable
provision of the Securities and Futures Act.
Where the Notes are subscribed or purchased in reliance on an exemption under Section
274 or 275 of the Securities and Futures Act, the Notes shall not be sold within the period of
six months from the date of the initial acquisition of the Notes, except to any of the following
persons:
(A)
an institutional investor (as defined in Section 4A of the Securities and Futures Act);
(B)
a relevant person (as defined in Section 275(2) of the Securities and Futures Act); or
(C)
any person pursuant to an offer referred to in Section 275(1A) of the Securities and
Futures Act,
unless expressly specified otherwise in Section 276(7) of the Securities and Futures Act or
Regulation 32 of the Securities and Futures (Offers of Investments) (Shares and
Debentures) Regulations 2005 of Singapore.
Where the Notes are subscribed or purchased under Section 275 of the Securities and
Futures Act by a relevant person which is:
(1)
a corporation (which is not an accredited investor (as defined in Section 4A of the
Securities and Futures Act)) the sole business of which is to hold investments and
131
the entire share capital of which is owned by one or more individuals, each of whom
is an accredited investor; or
(2)
a trust (where the trustee is not an accredited investor) whose sole purpose is to
hold investments and each beneficiary of the trust is an individual who is an
accredited investor,
that securities (as defined in Section 239(1) of the Securities and Futures Act) of that
corporation or the beneficiaries' rights and interest (howsoever described) in that trust shall
not be transferred within six months after that corporation or that trust has acquired the
Notes pursuant to an offer made under Section 275 of the Securities and Futures Act except:
10
(i)
to an institutional investor (under Section 274 of the Securities and Futures Act) or a
relevant person (as defined in Section 275(2) of the Securities and Futures Act)and
in accordance with the conditions specified in Section 275 of the Securities and
Futures Act;
(ii)
(in the case of a corporation) where the transfer arises from an offer referred to in
Section 276(3)(i)(B) of the Securities and Futures Act or (in the case of a trust)
where the transfer arises from an offer referred to in Section 276(4)(i)(B) of the
Securities and Futures Act;
(iii)
where no consideration is, or will be, given for the transfer;
(iv)
where the transfer is by operation of law;
(v)
as specified in Section 276(7) of the Securities and Futures Act; or
(vi)
as specified in required in Regulation 32 of the Securities and Futures (Offers of
Investments) (Shares and Debentures) Regulations 2005 of Singapore.
Variation
These selling restrictions may be amended, varied, replaced or otherwise updated from time
to time by the Issuer in accordance with the Dealer Agreement and any change will be set
out in the relevant Pricing Supplement issued in respect of the Notes to which it relates (or in
another supplement to this Information Memorandum).
132
Taxation
Introduction
The following is a summary of the Australian withholding tax treatment under the Income Tax
Assessment Acts of 1936 and 1997 of Australia (together, “Australian Tax Act”), the Taxation
Administration Act 1953 of Australia and any relevant regulations, rulings or judicial or administrative
pronouncements, at the date of this Information Memorandum, of payments of interest (as defined in
the Australian Tax Act) on the Notes to be issued by the Issuer under the Programme and certain
other Australian tax matters.
This summary applies to Noteholders that are:
•
residents of Australia for tax purposes that do not hold their Notes, and do not derive any
payments under the Notes, in carrying on a business at or through a permanent
establishment outside of Australia, and non-residents of Australia for tax purposes that hold
their Notes, and derive all payments under the Notes, in carrying on a business at or through
a permanent establishment in Australia (“Australian Holders”); and
•
non-residents of Australia for tax purposes that do not hold their Notes, and do not derive
any payments under the Notes, in carrying on a business at or through a permanent
establishment in Australia, and residents of Australia for tax purposes that hold their Notes,
and derive all payments under the Notes, in carrying on a business at or through a
permanent establishment outside of Australia (“Non-Australian Holders”).
The summary is not exhaustive and, in particular, does not deal with the position of certain classes of
Noteholders (including, without limitation, dealers in securities, custodians or other third parties who
hold Notes on behalf of any person).
Noteholders should also be aware that particular terms of issue of any Series of Notes may affect the
tax treatment of that Series of Notes. Information regarding taxes in respect of Notes may also be set
out in the relevant Pricing Supplement (or another relevant supplement to this Information
Memorandum).
This summary is not intended to be, nor should it be construed as legal or tax advice to any particular
holder of Notes. Each Noteholder should seek professional tax advice in relation to their particular
circumstances.
Australian Interest Withholding Tax
The Australian Tax Act characterises securities as either “debt interests” (for all entities) or “equity
interests” (for companies) including for the purposes of interest withholding tax imposed under
Division 11A of Part III of the Australian Tax Act (“Australian IWT”) and dividend withholding tax . For
Australian IWT purposes, “interest” is defined to include amounts in the nature of, or in substitution
for, interest and certain other amounts. The Issuer intends to issue Notes which are to be
characterised as “debt interests” for the purposes of the tests contained in Division 974 and the
returns paid on the Notes are to be “interest” for the purposes of section 128F of the Australian Tax
Act.
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Australian Holders
Payments of interest in respect of the Notes to Australian Holders will not be subject to Australian
IWT.
Non-Australian Holders
Australian IWT is payable at a rate of 10 percent of the gross amount of interest paid by the Issuer to
a Non-Australian Holder unless an exemption is available.
(a)
Section 128F exemption from Australian IWT
An exemption from Australian IWT is available in respect of interest paid on the Notes if the
requirements of section 128F of the Australian Tax Act are satisfied.
Unless otherwise specified in the relevant Pricing Supplement (or another relevant supplement to this
Information Memorandum), the Issuer intends to issue the Notes in a manner which will satisfy the
requirements of section 128F of the Australian Tax Act.
In broad terms, the requirements are as follows:
(i)
the Issuer is a resident of Australia and a company (as defined in section 128F(9) of the
Australian Tax Act) when it issues the Notes and when interest is paid;
(ii)
the Notes are issued in a manner which satisfies the “public offer” test in section 128F of the
Australian Tax Act.
In relation to the Notes, there are five principal methods of satisfying the public offer test, the
purpose of which is to ensure that lenders in capital markets are aware that the Issuer is
offering the Notes for issue. In summary, the five methods are:
•
offers to 10 or more unrelated financiers, or securities dealers or entities that carry
on the business of investing in securities;
•
offers to 100 or more investors of a certain type;
•
offers of listed Notes;
•
offers via publicly available information sources; or
•
offers to a dealer, manager or underwriter who offers to sell the Notes within 30 days
by one of the preceding methods;
(iii)
the Issuer does not know, or have reasonable grounds to suspect, at the time of issue, that
the Notes (or interests in those Notes) were being, or would later be, acquired, directly or
indirectly, by an “associate” of the Issuer, except as permitted by section 128F(5) of the
Australian Tax Act (see below); and
(iv)
at the time of the payment of interest, the Issuer does not know, or have reasonable grounds
to suspect, that the payee is an “associate” of the Issuer, except as permitted by section
128F(6) of the Australian Tax Act (see below).
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An “associate” of the Issuer for the purposes of section 128F of the Australian Tax Act includes, when
the Issuer is not a trustee:
•
a person or entity which holds more than 50% of the voting shares of, or otherwise controls,
the Issuer;
•
an entity in which more than 50% of the voting shares are held by, or which is otherwise
controlled by, the Issuer;
•
a trustee of a trust where the Issuer is capable of benefiting (whether directly or indirectly)
under that trust; and
•
a person or entity who is an “associate” of another person or company which is an
“associate” of the Issuer under the first bullet point above.
However, for the purposes of sections 128F(5) and (6) of the Australian Tax Act (see paragraphs (iii)
and (iv) above) an “associate” of the Issuer does not include an Australian Holder, or a NonAustralian Holder that is acting in the capacity of:
(b)
(A)
in the case of section 128F(5) only, a dealer, manager or underwriter in relation to the
placement of the relevant Notes, or a clearing house, custodian, funds manager or
responsible entity of a registered managed investment scheme (for the purposes of
the Corporations Act); or
(B)
in the case of section 128F(6), a clearing house, paying agent, custodian, funds
manager, responsible entity of a registered managed investment scheme (for the
purposes of the Corporations Act).
Exemptions under certain double tax conventions
The Australian government has signed new or amended double tax conventions (“New Treaties”)
with a number of countries (each a “Specified Country”). The New Treaties apply to interest derived
by a resident of a Specified Country.
Broadly, the New Treaties effectively prevent IWT applying to interest derived by:
•
the governments of the Specified Countries and certain governmental authorities and
agencies in a Specified Country; and
•
a “financial institution” resident in a Specified Country which is unrelated to and dealing
wholly independently with the Issuer. The term “financial institution” refers to either a bank or
any other enterprise which substantially derives its profits by carrying on a business of raising
and providing finance. However, interest paid under a back-to-back loan or an economically
equivalent arrangement will not qualify for this exemption.
The Australian Federal Treasury maintains a listing of Australia’s double tax conventions which
provides details of country, status, withholding tax rate limits and Australian domestic implementation.
This listing is available to the public at the Federal Treasury’s department website.
(c)
Payment of additional amounts
As set out in more detail in Condition 15 (“Taxation”) and unless expressly provided to the contrary in
the relevant Pricing Supplement (or another relevant supplement to this Information Memorandum), if
the Issuer is at any time required by law to withhold or deduct an amount in respect of any taxes
imposed or levied by the Commonwealth of Australia in respect of the Notes, such that the Holder
would not actually receive on the due date the full amount provided for under the Notes, the Issuer
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must, subject to certain exceptions contained in Condition 15.3 (“Exceptions to payment of additional
amounts”), pay such additional amounts as may be necessary in order to ensure that each
Noteholder is entitled to receive (at the time the payment is due) the amount it would have received if
no deductions or withholdings had been required to be made. If the Issuer is required to pay an
additional amount in respect of a Note under Condition 15.2 (“Additional amounts”), the Issuer will
have the option to redeem those Notes in accordance with Condition 11.3 (“Early redemption for
taxation reasons”).
Other Australian Tax Matters
Under Australian laws as presently in effect:
•
Gains on disposal of Notes by non-residents - Non-residents of Australia that have never
held their Notes in the course of carrying on business at or through a permanent
establishment within Australia will not be subject to Australian income tax on gains realized
by them on the sale or redemption of the Notes provided that such gains do not have an
Australian source. A gain arising on the sale of Notes by a non-resident Noteholder to
another non-resident where the Notes are sold outside Australia and all negotiations are
conducted, and documentation executed, outside Australia would not generally be regarded
as having an Australian source.
•
death duties – no Notes will be subject to death, estate or succession duties imposed by
Australia, or by any political subdivision or authority therein having power to tax, if held at the
time of death;
•
stamp duty and other taxes - no ad valorem stamp, issue, registration or similar taxes are
payable in Australia on the transfer or redemption of any Notes. The issue of any Notes will
give rise to a liability to mortgage duty. Any such duty is for the account of the Issuer;
•
TFN/ABN withholding - withholding tax is imposed (see below in relation to the rate of
withholding tax) on the payment of interest on certain registered securities unless the
relevant payee has quoted an Australian tax file number (“TFN”), (in certain circumstances)
an Australian Business Number (“ABN”) or proof of some other exception (as appropriate).
Assuming the requirements of section 128F of the Australian Tax Act are satisfied with
respect to the Notes, then TFN/ABN withholding will not apply to payments to a NonAustralian Holder.
The rate of withholding tax is 49 percent for the 2015-16 and 2016-17 income years
and under current law, will be reduced to 47 percent following the 2016-17 income year;
•
additional withholdings from certain payments to non-residents - the Governor-General may
make regulations requiring withholding from certain payments to non-residents of Australia
(other than payments of interest and other amounts which are already subject to the current
IWT rules or specifically exempt from those rules). Regulations may only be made if the
responsible Minister is satisfied the specified payments are of a kind that could reasonably
relate to assessable income of foreign residents. The possible application of any future
regulations to the proceeds of any sale of the Notes will need to be monitored by
Noteholders;
•
garnishee directions by the Commissioner of Taxation – the Commissioner may give a
direction requiring the Issuer to deduct from any payment to a Noteholder any amount in
respect of Australian tax payable by the Noteholder. If the Issuer is served with such a
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direction, then the Issuer will comply with that direction and will make any deduction required
by that direction;
•
supply withholding tax – payments in respect of the Notes can be made free and clear of any
“supply withholding tax”; and
•
goods and services tax (GST) - neither the issue nor receipt of the Notes will give rise to a
liability for GST in Australia on the basis that the supply of Notes will comprise either an input
taxed financial supply or (in the case of an offshore subscriber that is a non-resident) a GSTfree supply. Furthermore, neither the payment of principal or interest by the Issuer, nor the
disposal of the Notes, would give rise to any GST liability in Australia.
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Directory
Issuer
WSO Finance Pty Limited
(ABN 60 102 757 871)
101 Wallgrove Road
Eastern Creek NSW 2766
Facsimile: +61 2 9834 9211
Attention: General Manager and Company Secretary
Arrangers and Dealers
National Australia Bank Limited
(ABN 12 004 044 937)
Level 25
255 George Street
Sydney NSW 2000
Australia
Telephone: +61 2 9237 9201
Facsimile: +61 1300 652 354
Email: [email protected]
Attention: Director, Corporate Debt Markets Origination
Westpac Banking Corporation
(ABN 33 007 457 141)
Level 2
Westpac Place
275 Kent Street
Sydney NSW 2000
Australia
Telephone: +61 2 8253 4574
Facsimile: +61 2 8254 6937
Email: [email protected] and [email protected]
Attention: Head of Corporate Origination, Debt Capital Markets
138
Security Trustee
National Australia Bank Limited
(ABN 12 004 044 937)
Level 25, 255 George Street
Sydney NSW 2000
Australia
Facsimile: +61 2 9237 1634
Attention: Charles Davis
Note Trustee
BNY Trust Company of Australia Limited
(ABN 49 050 294 052)
Level 2
1 Bligh Street
Sydney NSW 2000
Australia
Facsimile: +61 9260 6001
Attention: Relationship Management Group
Registrar
BTA Institutional Services Australia Limited
(ABN 48 002 916 396)
Level 2
1 Bligh Street
Sydney NSW 2000
Australia
Facsimile: +61 2 9260 6001
Attention: Relationship Management Group
139