Safe harbour for listed securities
Safe harbour terms that applies to listed securities.
| Interest rate | Reserve Bank of Australia Indicator Lending Rates for banks providing standard variable housing loans for investors plus 2%. Applicable rates:
Interest rates for subsequent years: Rates and thresholds |
| Fixed / variable | Interest rate may be variable or fixed Variable - uses the applicable rate (as set out above) for each year of the LBRA Fixed - trustees may choose to fix the rate at the commencement of the arrangement for a specified period, up to a maximum of 3 years (see 'Term of the loan' below). The fixed rate is the rate for May plus 2% (the rate for the May before the relevant financial year). The 2015-16 rate of 7.75% may be used for LRBAs in existence on publication of these guidelines, if the total period for which the interest rate is fixed does not exceed 3 years (see 'Term of the loan' below). |
| Term of the loan | Variable interest rate loan (original) - 7 year maximum loan term Variable interest rate loan (re-financing) - maximum loan term is 7 years less the duration(s) of any previous loan(s) relating to the collection of assets Fixed interest rate loan - a new LRBA commencing after publication of these guidelines may involve a loan that has a fixed interest rate set at the beginning of the arrangement. The rate may be fixed up to for a maximum of 3 years, and must convert to a variable interest rate loan at the end of the nominated period. The total loan term cannot exceed 7 years. - For an LRBA in existence on publication of these guidelines, the trustees may adopt the rate of 7.75% as their fixed rate, provided that the total period of the fixed rate does not exceed 3 years. The interest rate must convert to a variable interest rate loan at the end of the nominated period. The total loan cannot exceed 7 years. |
| Loan to Market Value Ratio (LVR) | Maximum 50% LVR If more than one loan is taken out to acquire (or refinance) the collection of assets, the total amount of all those loans must not exceed 50% LVR. The market value of the collection of assets is to be established when the loan (original or re-financing) is entered into. For an LRBA in existence on publication of these guidelines, the trustees may use the market value of the asset at 1 July 2015. |
| Security | A registered charge/ mortgage or similar security (that provides security for loans for such assets) |
| Personal guarantee | Not required |
| Nature & frequency of repayments | Each repayment is of both principal and interest Repayments are monthly |
| Loan agreement | A written and executed loan agreement is required |
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