Pangaea Prospectus - Irish Stock Exchange

at the time of reinvestment in its choice of Portfolio Collateral because of the cost of entry into such Asset Swap
Transactions and due to restrictions in the Collateral Management Agreement with respect thereto.
The Issuer’s ongoing payment obligations under such Asset Swap Transactions (including termination
payments) may be significant. The payments associated with such hedging arrangements generally rank senior
to payments on the Notes.
3.13 Insolvency Considerations relating to the Portfolio Collateral
The Portfolio Collateral and the assets securing the Portfolio Collateral may be subject to various laws enacted
for the protection of creditors in the jurisdictions of incorporation of the issuers or obligors thereunder (as the
case may be) and, if different, the jurisdictions from which the issuers, obligors or guarantors thereof conduct
their business and in which they hold their assets which may adversely affect the abilities of such issuers,
obligors or guarantors to make payment on a full or timely basis. These insolvency considerations will differ
depending on the country in which each issuer, obligor or guarantor or its assets is located.
3.14 Changes in Tax Law
Following acquisition of the Portfolio Collateral by the Issuer, payments of interest on the Portfolio Collateral
will be adversely affected if such payments are or become subject to any withholding tax imposed by the
relevant obligor, save to the extent that such obligor is obliged to make gross-up payments to the Issuer that
cover the full amount of such withholding tax or where such payments can be excluded from such withholding
tax by any operation of any applicable tax treaty and/or completion of any procedural formalities. There can be
no assurance that, as a result of any change in any applicable law, treaty, rule or regulation or interpretation
thereof, the payments on the Portfolio Collateral might not in the future become subject to withholding tax or
increased withholding rates in respect of which the relevant issuer will not be obliged to gross-up to the Issuer.
In such circumstances, the Issuer may be able, but will not be obliged, to take advantage of a double taxation
treaty between The Netherlands and the jurisdiction from which the relevant payment is made or any option to
redeem or terminate the relevant item of Portfolio Collateral in such circumstances. In the event that the Issuer
receives any interest payments on any Portfolio Collateral net of any applicable withholding tax, the Coverage
Tests will be determined by reference to such net receipts. Such tax would also reduce the amounts available to
make payments on the Notes. There can be no assurance that remaining payments on the Portfolio Collateral
would be sufficient to make timely payments of interest, principal on the respective Maturity Dates and other
amounts payable in respect of the Notes of each Class.
3.15 Collateral Manager
The Collateral Manager is given authority in the Collateral Management Agreement to act as collateral manager
to the Issuer in respect of the Portfolio pursuant to and in accordance with the parameters and criteria set out in
the Collateral Management Agreement. See “Description of the Portfolio” and “Description of the Collateral
Management Agreement”. The powers and duties of the Collateral Manager in relation to the Portfolio include
acting on behalf of the Issuer in relation to (a) the acquisition of Collateral during the Reinvestment Period; and
(b) the sale of Collateral subject to certain limits or, at any time, upon the occurrence of certain events
(including Collateral becoming Defaulted Portfolio Collateral, Appreciated Portfolio Collateral or Credit Risk
Portfolio Collateral) in accordance with the provisions of the Collateral Management Agreement. Any analysis
by the Collateral Manager (on behalf of the Issuer) of items of Collateral which it is intending to purchase or
which are held by the Issuer from time to time, and the obligors thereunder, will be limited to a review of readily
available public information.
The performance of any investment in the Notes will be dependent in part on the ability of the Collateral
Manager to monitor the Portfolio and to manage the sale and acquisition of Collateral and on the performance of
the Collateral Manager of its obligations under the Collateral Management Agreement. The loss by the
Collateral Manager of key individuals could have a material adverse effect on the ability of the Collateral
Manager to perform its obligations under the Collateral Management Agreement.
Prior investment results and returns achieved for accounts managed by Investec Principal Finance, a business
unit division of Investec Bank (UK) Ltd are not necessarily indicative of the Issuer’s investment results. In
addition, the nature of, and risks associated with, the Collateral to be acquired by the Issuer may differ
materially from those investments and strategies undertaken historically by Investec Principal Finance, a
business unit division of Investec Bank (UK) Ltd, including by reason of the diversity and other parameters
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