Series 1 (Tesla)

Sequoia Accelerated Return Units – Series 1 – Tesla Motors Inc

The global economy is undergoing structural change in how we use energy as governments and global industry leaders focus on technological advancement aimed at reducing our reliance on carbon fuels. Sequoia Specialist Investments Pty Ltd (ACN 145 459 936) is offering two investments which give investors the ability to gain exposure to those companies driving the future disruption of the global energy and transportation industries:

Sequoia Accelerated Return Units – Series 1 – Tesla Motors Inc

Delivering enhanced exposure to the performance of NASDAQ listed shares in Tesla Motors Inc.

Tesla is a US based company active in the automobile and energy storage sectors which designs, manufactures and sells electric vehicles and energy storage units. Founded by its CEO and Chairman Elon Musk, the company is an innovation leader in the field of energy storage application. The company is listed on the NASDAQ stock exchange (NASDAQ:TSLA).

The Units in Sequoia Accelerated Return Units – Series 1 offer investors:

  • the ability to benefit from a 200% Participation Rate to the positive performance of NASDAQ listed shares in Tesla Motors Inc. (‘Reference Asset”) up to an indicative Performance Cap of 40% (Max return 80%)[1] over a 3 year period;
  • whilst being exposed to a 100% Participation Rate on any negative performance; and
  • the ability to benefit from any depreciation of the AUD versus USD, while being exposed to losses from any appreciation of the AUD versus USD.

Example:

Assuming you wish to get exposure to Tesla Motors Inc., you decide to invest $100,000 into Sequoia Accelerated Return Units – Series 1 (and no Upfront Adviser Fee is nominated). The cash flow scenarios are below:

Investment Terms

Cash available to invest into Sequoia Accelerated Return Units
Investment Amount
Application Fee
Reference Asset
Performance Cap at Maturity
Participation rate if Reference Asset Performance > 0
Participation rate if Reference Asset Performance =< 0
Currency Exposure
Investment Term in years
Total Outlay upfront

Values

$102,200
$100,000
$2,200
Tesla Motors Inc.
40%[2]
200%
100%
AUD/USD
3
$102,200

Investment cash flow Scenarios at Maturity

Reference Asset Ending Price as a % of the Reference Asset Starting Price

80%
100%
120%
140%
160%

Participation
Rate

100%
100%
200%
200%
200%

Final Value before adjusting for movements in the AUD/USD

$80,000
$100,000
$140,000
$180,000
$180,000[3]

Note: this graph reflects the table of investment cash flow scenarios at Maturity set out above.
[2] The Issuer may adjust the Performance Cap on the Commencement Date depending on market conditions; however the Performance Cap will not be lower than 35%.
[3] In this scenario, the Reference Asset hit the Performance Cap of 40%.

Initial Strategy Value

Date

16 September 2016

17 October 2016

16 November 2016

Initial Strategy Value

Initial Strategy Value

205.40

193.96

183.93

194.43

Accelerated Returns Series 1 (Tesla) Performance

DateReference Asset LevelReference Asset PerformanceIndicative Unit Value*Gross Performance*
30 Nov 2016189.40-2.59%$0.9741-2.59%
30-Dec-2016213.699.91%$1.198119.81%
31-Jan-2017251.9329.57%$1.591559.15%
28-Feb-2017249.9928.58%$1.571557.15%
31-Mar-2017278.3043.14%$1.800080.00%
28-Apr-2017314.0761.53%$1.800080.00%
31-May-2017341.0175.39%$1.800080.00%
30-Jun-2017361.6185.98%$1.800080.00%
31-Jul-2017323.4766.37%$1.800080.00%
31-Aug-2017355.9083.05%$1.800080.00%
31-Oct-2017331.5370.51%$1.800080.00%
31-Dec-2017311.3560.13%$1.800080.00%
31-Jan-2018354.3182.23%$1.800080.00%
28-Feb-2018343.0676.44%$1.800080.00%
31-Mar-2018266.13036.88%$1.737573.75%
30-Apr-2018293.90051.16%$1.800080.00%
31-May-2018284.73046.44%$1.800080.00%
29-Jun-2018342.95076.39%$1.800080.00%
31-Jul-2018298.14053.34%$1.800080.00%
31-Aug-2018301.66055.15%$1.800080.00%
28-Sep-2018264.77036.18%$1.723672.36%
31-Oct-2018337.32073.49%$1.800080.00%
30-Nov-2018350.48080.26%$1.800080.00%

*Indicative Performance/Price: Investors please note this is a theoretical investment maturity performance. This investment is designed to be held to maturity. Any investors seeking to redeem prior to maturity may receive an amount significantly different to the Indicative Performance stated.

Key Risks:

Key risks include:

  • Your return in SAR (Sequoia Accelerated Return series) is affected by the performance of the Reference Asset. There is no guarantee that the Reference Asset will perform well. If the Reference Asset performs negatively during the Investment Term you could lose some or all of your invested capital.
    • Your return is also affected by the performance of the AUD/USD exchange rate which can have a significant impact on the return generated from your investment. For SAR, the Final Value is subject to movements in the AUD/USD exchange rate. There is a risk that you could still incur a loss on your investment even if the Reference Asset Performance is positive at Maturity due to an adverse increase in the AUD/USD exchange rate movement during the Investment Term. Further, if the Reference Asset Performance is negative at Maturity, your loss could be further magnified due to an adverse increase in the AUD/USD exchange rate movement during the Investment Term.
  • The Units are subject to averaging. Averaging may impact the performance of the investment during the Investment Term when compared to an investment that does not use averaging.
  • Your return is also affected by the 40% Performance Cap applicable, which is indicative only and may be adjusted by the Issuer on the Commencement Date to reflect market conditions (though it will not be lower than 35% for SAR).
  • There is no guarantee that the Units will generate returns in excess of any Fees during the Investment Term. Additionally, in the event of an Investor requested Issuer Buy-Back or Early Maturity Event you will not receive a refund of any Fees.
  • Investors are subject to counterparty credit risk with respect to the Issuer and the Hedge Counterparty;
  • the Units may mature early following an Early Maturity Event, including an Adjustment Event, Market Disruption Event or if the Issuer accepts your request for an Issuer Buy-Back.

Please refer to Key Risks in the Term Sheet PDS and Section 2 “Risks” of the Master PDS with Loan for more information on risks.

 

Units in Sequoia Accelerated Returns – Series 1 (the “Units”) are issued by Sequoia Specialist Investments Pty Ltd (ACN 145 459 936) (the “Issuer”) and arranged by Sequoia Asset Management Ltd (ACN 094 107 034, AFSL 341506). Investments in the Units can only be made by completing an Application Form attached to the Term Sheet Product Disclosure Statement (“TSPDS”) dated on or around 22July 2016 and submitting it to Sequoia Specialist Investments Pty Ltd (ABN 67 145 459 936). A copy of the Term Sheet PDS and Master PDS can be obtained from the link in this website, or by contacting Sequoia Asset Management on 02 8114 2222. You should consider both PDS’ before deciding whether to invest in Units in Sequoia Launch Units – Series 23

You should seek independent advice in relation to the tax implications of your investment. 

The Issuer may, in its discretion, extend or shorten the Offer Period for the Units without prior notice.  If this happens, the Commencement Date and one or more consequential dates for the Units may vary. The Issuer may also defer the Commencement Date for the Units, in which case the Maturity Dates and other consequential dates for the Units may vary.  If the Issuer varies the Offer Period or the Commencement Date for the Units it will post a notice on the website informing applicants of the change at www.sequoiasi.com.au