PF Finans / Clarinova

Following an Event of Default and acceleration of the maturity of the Bonds (whether or not the Assets have been liquidated), proceeds of the liquidation of the Assets (or, if no liquidation has yet occurred, Interest Proceeds and Principal Proceeds) available to the Company will be allocated after paying accrued and unpaid fees and expenses in accordance with the Priority of Payments to pay the entire principal amount of the Bonds. The Bonds May Be Affected by Currency Risks A majority of the Aggregate Principal Balance of the Bonds may be comprised of assets that are not denominated in Euros. Losses may be incurred due to fluctuations in exchange rates in the event of a default under any Hedge Agreement or the sale of the related non-Euro denominated assets. In addition, fluctuations in exchange rates may result in a decrease in value of the portfolio for the purposes of sale thereof upon enforcement of the security over it. The Company may also be limited at the time of reinvestment in its choice of assets because of the cost of entry into such Hedge Agreements. The Company's ongoing payment obligations under Hedge Agreements (including termination payments) may be significant. The payments associated with such hedging arrangements generally rank senior to payments on the Bonds. The Company will depend upon each Hedge Counterparty to perform its obligations under any such Hedge Agreement. If a Hedge Counterparty defaults or becomes unable to perform due to insolvency or otherwise, the Company may not receive payments it would otherwise be entitled to from such Hedge Counterparty to cover its foreign exchange exposure. A Hedge Counterparty may terminate the applicable Hedge Agreements if any withholding tax is imposed on payments thereunder by such Hedge Counterparty, and any amounts that would be required to be paid by the Issuer to enter into replacement Hedge Agreements will reduce amounts available for payments to holders of Bonds. A Hedge Counterparty may also terminate the applicable Hedge Agreements upon the occurrence of certain events of default or termination events thereunder with respect to the Company (including, but not limited to, bankruptcy, a change in law making the performance of the obligations under such Hedge Agreement unlawful, or the determination to sell or liquidate the Assets upon the occurrence of an Event of Default under the Indenture), and in the case of such early termination of any Hedge Agreement, the Company may be required to make a payment to the related Hedge Counterparty. Any amounts that would be required to be paid by the Company to enter into replacement Hedge Agreements will reduce amounts available for payments to holders of the Bonds. In either case, there can be no assurance that the remaining payments on the Assets would be sufficient to make payments of interest and principal on the Bonds.

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