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Polish Annuity Bonds

Financial & Capital Trust S.A. it is the first entity in Poland that through its subsidiaries enables investors to acquire unique financial instruments such as Annuity Bonds. This is primarily targeted at people who are looking for high-quality capital investments while offering attractive rates of return in practically any period of time.


According to Art. 4 sec. 1 of the Bonds Act dated. January 15, 2015 (Journal of Laws No. 2015, item 238 as amended):


"A bond is a security issued in a series in which the issuer states that it is the debtor of the bondholder [...] and commits itself to a specified benefit."

Furthermore, according to art. 23 of the Bonds Act:


"The Issuer may issue non-redeemable bonds, [...] entitling the bondholder to receive interest for an indefinite period, hereinafter referred to as "annuity bonds". [...]"



The annuity bonds issued by the investment trust i.e. the Financial & Capital Trust Group S.A. shall be then marketed on the public capital markets, which are commonly quoted on stock exchanges in Poland and other selected countries. As a result, despite the fact that bonds are not redeemable, investors are constantly able to withdraw their funds from investments by selling them on the stock exchanges or call for an equity line on credits prepared by Financial & Capital Trust Group S.A. At the same time, it should be emphasized that the stock exchanges impose a number of information obligations on issuers, so that investors have constant access to all relevant information about the issuer's business and financial and economic standing.


Funds obtained under individual issue of annuity bond are directed under a banking lockbox for the development of ESCO housing projects throughout the European Union, run by companies belonging to the investment portfolio of Financial & Capital Trust S.A. Speaking more specifically, we use investors' money for:


- payment for the development of the ESCO flats, which is purchased by the ESCO Clients who commit themselves to receive a set of agreed services for 25 years;

 

- purchase of shares of a public company to secure the purchase of services, which are then delivered to the ESCO Clients.


Ultimately the Trust intends to become a producer and provider of most of the services to deliver them to the ESCO Clients using banking lockbox agreements.

Through dedicated trusts, based on function of the Trustee of the Trust in Poland, Clients acquire ESCO flats for which they pay a fixed monthly ESCO Charge. At the same time, they use the services they have chosen which are provided to them by the company controlled by Financial & Capital Trust S.A. The above ESCO Charge is a source of profit for the listed public company and enables the payment of fixed dividends during the whole lockbox period of repayment of the flat under supervision of Financial & Capital Trust S.A.

The remuneration of investors who purchase our annuity bonds is therefore the result of two factors:


the fixed ESCO Charge of 4.55% per annum

+

variable dividend paid by the Company providing the ESCO services to the Clients.

The annuity bonds are secured in two ways: each bond is giving the right to one square meter the developed real estate and all the security interests to the shares with face value of the square meter of the Company from which the dividend is payable. It should be emphasized that the total value of the collateral indicated represents to an amount of 200% of the value of funds derived through annuity bonds.

The term of the investment can be up to 25 years, or even longer. During this period, investors are guaranteed a minimum remuneration of 4.55% per annum, while the rest of the remuneration is contingent on the current performance of ESCO's Clients payments and thus derived dividends.


Summary

key features of annuity bonds:

1. Investors' capital is fully secured by rights to assets with a total value of 200% of the value of funds derived through annuity bonds.

2. Term investment period, which specifies a minimum coupon of 4.55% paid to investors each year.

3. The annuity bonds will be listed and quoted on the public capital markets, which means full transparency of the situation of a company issuing annuity bonds due to information obligations imposed by existing laws and exchange regulations.

4. The ability to withdraw funds from the investment at any time by selling annuity bonds on the exchange to other investors or exercising the Equity Line of Credits.

5. In view of securing funds on the ESCO right to the each apartment, acquisition of annuity bonds will approximate the value for the ESCO Customer to acquire a full ESCO property title for the dwelling by reducing the ESCO Charge paid each month for flat and services.

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