BABCOCK & BROWN

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2. answers to key questions This Section answers some key questions that prospective investors may have about BBSN. The answers to these key questions are intended as a guide only. Further details are provided in other Sections of this Prospectus, including the Terms set out in full in Appendix B. If you are unclear in relation to any matter or uncertain if BBSN are a suitable investment for you, you should consult your stockbroker, accountant or other financial advisor. You should read the whole of this Prospectus carefully. Topic Summary More information BBSN What are BBSN? • BBSN are unsecured, subordinated, cumulative, resettable notes issued Appendix B, by Babcock & Brown, which: Section 8.4 – entitle Holders to receive floating rate, cumulative Interest semiannually in arrears (which may be deferred by Babcock & Brown in certain circumstances) up until the first Reset Date; – have particular terms which may be changed on a Reset Date; – have a Maturity Date of 15 November 2015 but may be Exchanged, Repaid or Resold earlier in certain circumstances; – are subordinated in right of payment of interest and principal to any debts of Babcock & Brown from time to time ranking ahead of BBSN; and – benefit from the subordinated Guarantee from BBIPL. Why is Babcock • BBSN are being issued to raise debt finance for use in the operating Section 3.2 & Brown issuing businesses of the Babcock & Brown Group. BBSN? How many BBSN • The Offer is for the issue of up to 2.5 million BBSN at an issue price Section 3.3 are being issued? of $100 each to raise up to $250 million, with the ability to accept oversubscriptions for up to $50 million. When can BBSN • Babcock & Brown may Repay all or some BBSN on a Reset Date. Appendix B be Exchanged, • Babcock & Brown may Repay all BBSN in any of the following clauses 4, 5 Repaid or Resold? circumstances: – on occurrence of a Change in Law Event; – on occurrence of a Change in Control Event; – on occurrence of a Delisting Event; and – if the aggregate Face Value of BBSN on issue is less than $50 million. • At the election of Babcock & Brown, after it receives an Exit Notice from Holders, BBSN may be: – Exchanged, Repaid or Resold (or a combination of Exchanged, Repaid and Resold) to the extent the Holder has requested Exchange (other than at the Maturity Date, where Resale is not applicable); or – Repaid or Resold (or a combination of Repaid and Resold) to the extent the Holder has requested Repayment. • All outstanding BBSN must be Repaid by Babcock & Brown on the Maturity Date, or where the Holder has requested Exchange, Babcock & Brown can elect to Exchange or Repay. 16 BABCOCK & BROWN SUBORDINATED NOTES
Topic Summary More information BBSN (continued) Can BBSN be • Babcock & Brown will apply to ASX for quotation of BBSN within Section 3.11 traded on ASX? seven days after the lodgement of this Prospectus. • It is expected that BBSN will trade under ASX code ‘BNBG’. • Quotation on ASX is not guaranteed or automatic. If quotation is not granted within three months (or any longer period permitted by law), BBSN will not be issued and Application payments will be refunded. No interest will be payable on refunded Application payments. Risks What are the • An investment in BBSN involves risks. Further information on the risks Section 6 risks of investing of investing in BBSN is contained in Section 6. in BBSN? Taxation implications What are • The taxation implications of holding or selling BBSN will depend on Section 7 the taxation the individual circumstances of the Holder. A summary of some of implications the relevant taxation consequences for Holders is provided in the of investing Tax Letter from Greenwoods & Freehills contained in Section 7. in BBSN? • You should obtain your own taxation advice based on your individual circumstances before investing in BBSN. Interest How will the • The Interest Rate for each Interest Period is calculated as: Appendix B Interest Rate Interest Rate = (Market Rate + Margin) clause 2 be calculated? Where: – The Market Rate is the Bank Bill Swap Rate applying on the first Business Day of the Interest Period (or as changed by Babcock & Brown on a Reset Date); and – The Margin applying until the first Reset Date will be determined by the Bookbuild and will be within the indicative range of 2.00% to 2.30%. • The Interest Rate for the first Interest Period will be the sum of the Margin and the greater of: – the Market Rate on the last day of the Bookbuild; and – the Market Rate on the Settlement Date. • The Interest Rate for each Interest Period will be announced by Babcock & Brown to ASX each time it is determined. • Babcock & Brown may change the Interest Payment Dates, the Market Rate and the Margin and certain other terms on each Reset Date. • The first Reset Date is 15 November 2010. BABCOCK & BROWN SUBORDINATED NOTES 17
Page 1 and 2: BABCOCK & BROWN Sydney Melbourne Br
Page 3 and 4: Prospectus & supplementary prospect
Page 5 and 6: SUPPLEMENTARY PROSPECTUS Issuer Bab
Page 7 and 8: Key DAtes Key dates for the Offer D
Page 9 and 10: Guarantee: BBSN have the benefit of
Page 11 and 12: HoW to APPLy for BBsN Read Consider
Page 13 and 14: 1. Key terms of BBSN BABCOCK & BROW
Page 15 and 16: Interest Payments (continued) Defer
Page 17 and 18: Babcock & Brown’s transaction rig
Page 19: 2. answers to key questions BABCOCK
Page 23 and 24: Topic Summary More information Inte
Page 25 and 26: Topic Summary More information Exch
Page 27 and 28: Topic Summary More information Repa
Page 29 and 30: Topic Summary More information Guar
Page 31 and 32: 3. Details of the Offer BABCOCK & B
Page 33 and 34: 3.2.1 Source of Interest Payments B
Page 35 and 36: 3.8 How do you complete Application
Page 37 and 38: 4. information about babcock & brow
Page 39 and 40: 4.2.1 Real Estate The Real Estate g
Page 41 and 42: distribution, bulk terminal and pow
Page 43 and 44: an economist with the Australian Tr
Page 45 and 46: 5. summary financial information BA
Page 47 and 48: can be obtained free of charge by a
Page 49 and 50: Consolidated balance sheet (continu
Page 51 and 52: • performance fees earned from BJ
Page 53 and 54: 6. risk factors BABCOCK & BROWN SUB
Page 55 and 56: HISTORICAL BANK BILL SWAP RATE 8.0%
Page 57 and 58: Group. The interests of these Emplo
Page 59 and 60: terrorist attack, major plant break
Page 61 and 62: 6.3 General economic factors that m
Page 63 and 64: 7. Tax Letter BABCOCK & BROWN SUBOR
Page 65 and 66: 9 November 2005 The Directors Babco
Page 67 and 68: To the extent that a capital loss w
Page 69 and 70: 8. Additional information BABCOCK &
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• Subordination. A claim by the T
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may be invested or otherwise made u
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8.6.1 Classes of shares The A Class
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Agreement. Under the agreement, the
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This right is independent of Babcoc
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8.10 Summary of the Arrangement Dee
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Greenwoods & Freehills has acted as
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8.20 Foreign acquisitions and takeo
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APPENDIX A - Glossary BABCOCK & BRO
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BBEM BBGP BBI Babcock & Brown Elect
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Guarantee Guarantor the unsecured a
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Security Trust Deed means the deed
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APPENDIX B - Terms of Issue BABCOCK
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(c) For the purposes of clause 2.1(
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2.11 Method of payment Any amount w
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4.4 Exit Notices (a) Once given by
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(2) (in the case of an entitlement
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(b) it shall have been indemnified
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13 Amendments to these Terms of Iss
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Change in Control Event means each
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Issuer’s Group means the Issuer a
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APPENDIX C - arranger’s financial
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From time to time BBAH may act unde
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Pin cheque(s) here (do not staple)
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Pin cheque(s) here (do not staple)
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CORPORATE DIRECTORY Issuer Babcock
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BABCOCK & BROWN

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