EOFY Planning Opportunity

Limited Recourse Investment Loan Structure

As financial year end approaches, some wholesale investors may be considering ways to manage EOFY planning while also positioning for investment opportunities in the year ahead.

Candour offers access to a limited recourse investment loan structure designed to provide upside participation to selected U.S. technology and semiconductor ETFs.

The structure allows investors to pay prepaid interest upfront and gain exposure to selected reference assets over a defined investment term.

Indicative Pricing Example

Reference Asset

QQQ.O

XLK.P

SMH.O

Theme

Nasdaq-100 ETF

U.S. Technology ETF

Semiconductor ETF

Term

12 months

12 months

12 months

Strike

110%

110%

110%

Prepaid Interest

6.99% p.a.

6.99% p.a.

6.99% p.a.

Participation

70%

50%

30%

Indicative terms only. Final terms are subject to pricing and formal documentation.

How it works

Investors pay prepaid interest upfront. If the selected reference asset finishes above the strike at maturity, investors participate in the upside above that level based on the applicable participation rate.

For example, if QQQ finishes 25% above its initial level, the return would be calculated on the upside above the 110% strike, with 70% participation.

If the selected reference asset does not finish above the strike, no upside return is generated and the prepaid interest is not refunded.

Why investors may consider this structure

This structure may be relevant for wholesale investors who are:

  • considering EOFY planning strategies;
  • looking to discuss prepaid investment loan interest with their accountant or tax adviser;
  • seeking exposure to selected U.S. technology or semiconductor themes;
  • looking for a limited recourse structure rather than contributing the full notional investment amount upfront.

Limited recourse loan arrangement

The structure is supported by a limited recourse investment loan.

Under this arrangement, the investor’s repayment exposure to the loan principal is generally limited to the investment arrangement itself. In practical terms, the investor’s main economic outlay is the prepaid interest paid at the start of the investment.

Important information

This opportunity is available to wholesale clients only.

The information on this page is general information only and does not constitute investment advice, tax advice or a recommendation to invest.

Investors should seek independent financial, legal and taxation advice before making an investment decision, including advice from their accountant or tax adviser regarding the treatment of any prepaid interest.

Final terms are subject to pricing and formal documentation.

Contact Us

To learn more about current EOFY planning opportunities, please contact the Candour team.