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FREQUENTLY ASKED QUESTIONS
Why are securities issued by Balanced Securities Limited described as unsecured notes? Q: Why are securities issued by Balanced Securities Limited described as unsecured notes? A: In June 2010 in an update of Regulatory Guide 69, the Australian Securities and Investments Commission (ASIC) set out its view of the interpretation of the relevant section of the Corporations Act which was that an investment product of this nature which was previously described as ³debentures² should now be formally described as an ³unsecured note² or ³unsecured deposit note² and for this purpose will be referred to through out this website as ³unsecured notes². Although there is a change in description the security for the investment remains unchanged: Australian Executor Trustees Limited holds a charge over all the assets of the Company as trustee for the investors. An indication of the level of security which this provides is given by the amount of the Company¹s equity capital which as at 30 June 2011 exceeded $80 million. Q: What are Balanced Securities Limited unsecured notes? A: Balanced Securities Limited unsecured notes are first ranking securities issued to each investor to secure their deposits with the Company. Balanced Securities Limited will initially invest these funds in short term liquid investments and then lend these funds to borrowers secured by first registered mortgages in accordance with the lending policy approved by the Trustee. Q: How Secure is an unsecured note? A: The unsecured note is secured by a charge to an independent Trustee Company, who holds a first ranking charge over the mortgages and other assets of Balanced Securities Limited including $1 million paid up capital and retained earnings of the company. Loans made by Balanced Securities Limited are on first mortgage only, and are advanced up to 67% of the value of a property. An independent professional valuation is obtained from a qualified valuer on the Company’s instruction to ensure that an accurate value of the mortgaged property is provided. Mortgage payments are strictly monitored so that in event of a delay in payment, appropriate steps can be implemented for the recovery. The Company’s accounts are regularly audited by a national accounting firm. The Directors and Senior Executives have a wealth of experience in the mortgage lending industry and are actively involved in the day to day loan approval process. Q: When will I receive interest payments? A: Interest payments can be received on maturity or monthly. Interest is calculated at the end of day on the 15th of each month and is payable within seven days thereafter. Payment can be made either by cheque or by electronically transferring the payment directly to your specified bank account. Q: How long do I need to commit myself to an unsecured note? A: Unsecured note investments must be treated as a fixed term investment. Similar to first mortgage investments, unsecured note investments can be for a relatively short term and are generally for periods from one to three years. Q: Can I access my investment before it matures? A: In the case of an emergency it is usually possible to recover your investment before its maturity date. In these instances, a handling fee equal to 1% of the principal redeemed may apply together with reimbursement to the Company for any bank fees or taxes incurred as a result and compensation to the Company from any resulting loss to it arising from movements in interest rates or like events since the investment was made. Q: Can I roll over my unsecured note when it matures? A: Approximately 30 days prior to the maturity date of your investment we will advise you of the current interest rates applicable for new terms. If you wish to change the term or withdraw all or part of your investment at this time, you should advise us in writing at least 7 days prior to the maturity date. If you do nothing we will automatically roll over your unsecured note investment for the same term as previously held at the applicable interest rate. Q: What are the advantages of Balanced Securities Limited unsecured notes? A: Interest will commence from the date of acceptance of your investment eliminating the waiting period prior to a first mortgage investment becoming available. With first mortgage investments there was usually a “down time” between when a mortgage was repaid and funds were placed in an at call account pending re-investment in a new mortgage. This “down time” has now been eliminated for investors. Regular fixed monthly interest payments which can be deposited directly into your bank account. There are no entry, account or collection fees and all interest rates quoted are the net return. Balanced Securities Limited will also absorb all its government bank charges such as bank accounts Debits Tax. A pool of mortgages offering you a diversity of security properties rather than a single mortgage securing your investment. The Company and its investments are regulated by the Australian Securities and Investments Commission ("ASIC") and audited by a national accounting firm. Q: When do I have to provide identification? A: If you are a New Investor then under the provisions of the Anti-Money Laundering and Counter Terrorism Act 2006 we are under a legal obligation to request from you reliable and verifiable documentary information to confirm your identity. For details of the informational requirements to be met contact the Investor Services manager on 1300 135 077. Q: How do I invest in Balanced Securities Limited unsecured notes? A: After reading the contents of the prospectus, complete the attached application form and return it together with your cheque in the enclosed reply paid envelope. |
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