Investment Risks - Notes Market
The Notes Market has a different risk profile to the Flex Market, Plus Market and Green Market, and has been designed for investors comfortable with a higher level of risk to potentially earn a higher return. We have summarised the key investment risks below. You should read the PDS, SPDS and TMD before making any investment decisions.
Poor performance of underlying loans
If borrowers relating to the underlying loans are late in making payments or default on their obligation to repay their loan, including as a result of deteriorating macroeconomic conditions, the ABS trustee will suffer a loss of income. If total losses exceed the sum of the excess spread, the interest due to the class G note holders, and the outstanding principal of the class G notes in any given period, then some or all of the 2024 Auto G-Notes principal balance may be charged off, which may lead to you suffering financial loss.
Economic exposure to a junior note in the ABS structure
The 2024 Auto G-Notes are the most junior notes in the Plenti 2024 Auto ABS structure. In the event that the Plenti 2024 Auto ABS cannot make all payments due to noteholders, holders of 2024 Auto G-Notes are in the class of notes most exposed to suffering financial loss.
Recently originated ABS transaction
The Plenti 2024 Auto ABS was issued in May 2024. Whilst the average underlying borrower loan had been outstanding an average of 9.7 months at 31 July 2024, the Plenti 2024 Auto ABS has not been outstanding long enough to provide a long time series of performance data.
Plenti Finance default
Plenti Finance provides supplemental interest payments to the Notes Trustee to cover the difference between the interest payable on a loan funded at the Notes Market rate and the interest rate payable on the 2024 AutoG-Notes. These supplemental interest payments are guaranteed by Plenti Group through a parent company guarantee. If Plenti Group were to become insolvent, you may not receive the full amount of the supplemental interest payment, and you may suffer financial loss.
Investment longer than indicative term
Your funds may need to stay on loan beyond the indicative term in the event that there is no Call on the expected call date, or in the event the Plenti 2024 Auto ABS has insufficient funds, or is unable to be refinanced, in order to repay the principal and interest owed on all of the Plenti ABS notes on issue. Your funds may need to remain on loan for an amount of time equal to the longest remaining term of an underlying loan. In such circumstances, you may continue to receive repayments of both principal and interest. If part or all of the 2024 Auto G-Notes have been charged-off, you may only receive a proportion of your principal repayment, or you may suffer financial loss.
Provision Fund Protection
We may make a claim to the Provision Fund to compensate you in the event that the Note Purchase Trust is late in making an interest or principal payment or it defaults on its loan. However, the Provision Fund is not an insurance product and we cannot guarantee or warrant that you will be compensated.
No deposit guarantee
Your investment is not a deposit and does not have the benefit of depositor protection laws as it would have if it were an amount deposited with an Australian ADI.
You can read more about the benefits and risks of investing in the Plenti Lending Platform (ARSN 169 500 449) (known as the Plenti Lending Platform) in our Product Disclosure Statement.
