St Laurence to Launch An AUD Fund, US Stick Issue

News Release 4 November 2005

St Laurence to Launch An Australian Dollar Capital Assured Fund And a $US Dual Currency Debenture Stock Issue

Investment and finance group St Laurence announced that next week it will launch two innovative new investment opportunities. This follows an announcement earlier this month that it had bought the manager of the National Property Trust. This acquisition which is effective on 1 December 2005 takes the St Laurence group to over $1 billion in assets under management, a significant milestone for the company that was founded in 1994.

St Laurence Mortgages Limited, its subsidiary company which specialises in providing finance to commercial borrowers, and has a B3 investment grade rating from international ratings agency Rapid Ratings, has also announced an increase in interest rates paid for its New Zealand dollar debenture stock investments as of 19 October, with loyalty bonuses for reinvestment.

The first of the new investments, the Australian denominated St Laurence Capital Assured Fund (CAF), a unit trust established in Australia, will invest in first mortgages secured over real property located in Australia, providing competitive rates of return and carrying a Mortgage Indemnity Insurance Policy underwritten by certain underwriters at Lloyd’s of London which, subject to the terms and conditions of the policy, provides protection for up to 75% of the amounts lent by CAF.

St Laurence was granted an Australian financial services licence in February 2004 enabling it to provide and manage investment opportunities in Australia.

The second investment is a Dual Currency Debenture Stock issue (DCD) that offers investors a secured investment (first ranking over all of St Laurence Mortgages' assets, subject to permitted prior charges) paying 7% per annum on the $NZ amount invested and provides the opportunity to possibly benefit from $NZ/$US exchange rate fluctuations during the investment term, although that is not assured as the $NZ may appreciate further against the $US during the investment term.

St Laurence’s Managing Director Kevin Podmore said, “Launching these two opportunities is consistent with our mission to offer our investors a choice of investments that provide higher yields than bank deposits while aiming to minimise the risks normally associated with higher performing investments.”

The CAF is structured as a unit trust, with a minimum investment of $A1,000 and providing the choice of 3, 6, 9 12 or 24 month terms. Investors also have the choice of being paid the investment return on their investment monthly in arrears into their Australian bank account, or of having their investment return reinvested monthly in the CAF.

“The CAF is designed to pay an attractive monthly investment return and provides investors with the added protection of a Mortgage Indemnity Policy, covering capital loss and underwritten by certain Lloyd’s Underwriters; this policy insures up to the first 75% of the amount advanced by CAF against any potential decrease in the value of the property, subject to the terms and conditions of the policy. A copy of the policy is available for viewing at St Laurence’s Sydney or Wellington offices. Further assurance is provided by our pledge not to take any fees from the CAF unless investors receive all the returns to which they are entitled,” Mr Podmore said.

St Laurence says the CAF was developed for investors seeking to diversify the income producing segment of their investment portfolio. The fund will provide finance secured by first mortgages over properties located in NSW, Victoria, Queensland or the ACT with a maximum loan to value ratio of 75% and for a term of not over 2 years.
The CAF is offering investment returns per annum of 5.50% for a 3 month term, 6.25% for a 6 month term, 6.75% for a 9 month term, 8.00% for a 12 month term and 8.25% for a 2 year term. Investment returns from the CAF will be treated as dividend income and no New Zealand withholding tax will be deducted by the CAF; investors will be liable for satisfying their own New Zealand tax liability. Australian withholding tax, currently 10%, will apply.
The DCD has a term of approximately three years, maturing on 31 October 2008. There is a minimum investment of $NZ5,000. The offer is limited to $10 million; it opens on 31 October and will close on 16 December 2005. St Laurence advises that this Offer will not be extended beyond that date.

“One of the key factors determining returns on the DCD, other than the interest rate of 7.00% per annum paid quarterly on the principal $NZ amount invested, is the $US/$NZ exchange rate upon reconversion of the investor's $US exposure to $NZ. For example, were the $NZ to decline in value against the $US, and assuming that there was no earlier reconversion, then upon maturity the amount paid to investors will be greater than the principal $NZ amount invested. Conversely, were the $NZ to increase in value against the $US then, on maturity, the amount to be converted back and paid in $NZ will be less than the $NZ amount invested.”

Investors have the ability to reconvert their $US exposure back to $NZ at any time during the investment term at the forward rate to maturity. The DCD is only available to New Zealand residents. The funds raised will be used to invest primarily in secured mortgages, bank deposits and government securities in Australasia.

“Essentially the DCD is a niche investment opportunity (when compared with the CAF and St Laurence Mortgages NZ dollar debenture stock) allowing investors the opportunity to possibly benefit from movements in the $US/$NZ exchange rate. The potential returns in the event of the $NZ depreciating against the $US as many commentators are anticipating, over and above the fixed 7% per annum interest rate, would be attractive. Conversely, there is a risk to investors that the $NZ will appreciate against the $US during the term, with the result that potential returns will be reduced as the result of loss of investors' capital on reconversion to $NZ.

“While historical exchange rate movements are no indication of future movements, the $NZ/$US exchange rate recently reached its highest point in over 10 years.

“The two new investments reflect our philosophy of providing investors with a greater choice of investment opportunities. The CAF enables New Zealanders to diversify their income producing investments. It provides a higher fixed rate of return for the investment period that is payable monthly and gives investors additional protection for their capital through a Mortgage Indemnity Insurance policy with Lloyd’s Underwriters, which is paid for by St Laurence."

To continue to ensure that its $NZ debenture stock remains highly attractive, St Laurence Mortgages has increased the rates paid for its 2 year stock from 8.75%p.a. to 8.80%p.a., for 3 year stock from $8.50%p.a. to 9.00%p.a., 4 year stock from 8.5%p.a. to 9.25%p.a., and 5 years stock from $8.50%p.a. to 9.10%p.a. Additional loyalty bonuses are also provided upon reinvestment.

Full details of the St Laurence Capital Assured Fund offer are provided in the Australian Product Disclosure Document dated 26 October 2005. The St Laurence Mortgages Limited Debenture Stock investment statement dated 8 September 2005 details the Dual Currency offer.

Mr Podmore said that as well as growing its New Zealand client base, Australia provided big opportunities both in terms of Australian domiciled investments such as the CAF and Australian debentures. This would enable St Laurence to continue to experience the strong growth the company has seen in recent years.

ENDS

Backgrounder follows

BACKGROUND

St Laurence Limited
St Laurence Limited is an Australasian investment and finance company specialising in property bond issues, fixed interest debenture stock investments, managed funds and syndicated and proportionate title property investments.

Founded in 1994 by its Managing Director Kevin Podmore, St Laurence’s mission is to provide investors with higher yields than bank deposits while minimising the risks normally associated with higher performing investments.

The company’s rapid growth over the past decade is the result of a disciplined and structured approach to the property and finance markets.

With offices in Wellington, Auckland and Sydney, St Laurence currently manages more than $700 million of assets for more than 12,000 investors.

On 7 October 2005 St Laurence announced that it had entered into an unconditional agreement to purchase the Manager of publicly listed property trust, The National Property Trust (NPT) which has over $268 million in assets. St Laurence will take over as Manager of NPT on 1 December 2005 and will then have over $1 billion in assets under management, a significant milestone for the company.

The company is now focused on building its business in Australia where it opened an office in Sydney in 2001, and expanding its core business to include innovative investment products and funds management.

BACKGROUND

St Laurence Capital Assured Fund

Investment Rates :
- 3 months 5.50%
- 6 months 6.25%
- 9 Months 6.75%
- 1 year 8.00%
- 2 years 8.25%

Investment Type Unit Trust established in Australia

Minimum Investment $A1,000

Allotment Units are issued daily once the completed application form, contained within the Product Disclosure Document dated 26 October 2005, is received by St Laurence Capital Limited in Australia at the address set out below.

Payment of Distributions There are two payment options:
- monthly in arrears to the investor’s nominated Australian bank account
- reinvestment of monthly distributions in additional units in the Fund. Under this option, monthly distributions will be reinvested for the balance of the term of the initial investment and at the same interest rate as applied to the investment at the commencement of the term.

Activities of the Fund Amounts raised by the Fund will be invested in first ranking mortgages over real estate in Australia. A Mortgage Indemnity Insurance Policy, underwritten by certain Underwriters at Lloyd’s of London, provides cover (subject, of course, to the terms and conditions of the policy) against capital loss to the extent of up to the first 75% of the amount lent by the Fund, against potential decrease in the value of the property (e.g., where a forced sale of a property results in a shortfall).

Tax Australian Non-Resident Withholding tax (currently 10%) is deducted from monthly distributions. The monthly distributions will be treated as dividend income in New Zealand. Investors will be liable for satisfying their own New Zealand tax liability.

Contact Details In New Zealand:
P O Box 1894, Wellington
Phone 0800 499 321
www.stlaurence.co.nz

In Australia:
P O Box 30, Millers Point, NSW 2000.
Phone: 00612 9375 0500
www.stlaurence.com.au

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