DRAFT Aldermore Group PLC Proposed Tier 2 Transaction October 2016 aldermore.co.uk
Transaction Disclaimer Important Notice NOT FOR DISTRIBUTION TO ANY U.S. PERSON OR TO ANY PERSON OR ADDRESS IN THE U.S. By opening this presentation and/or attending the meeting where this presentation is made, you agree to be bound by the following limitations. The information in this presentation is confidential and this document is being made available to selected recipients only and solely for the information of such recipients. This document may not be reproduced, redistributed or passed on to any other persons, in whole or in part. This presentation is not intended for distribution to or use by any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law or regulation. This information is not intended to provide and should not be relied upon for accounting, legal, tax advice or investment recommendations. You should consult your tax, legal accounting or other advisers about the issues discussed herein. Any purchase of the Tier 2 notes (the “Notes”) described in these materials should be made solely on the information contained in the prospectus in final form prepared by Aldermore Group PLC (“ Aldermore ”) (the “Prospectus”) and any other supplemental prospectus to be published in respect of the Notes (the “Offering”) . The summary terms and conditions contained in this presentation are indicative of and wholly subject to the terms and conditions of the Notes detailed within the Prospectus. Prospective investors are required to make their own independent investigations and appraisals of the business and financial condition of Aldermore and the nature of the Notes before taking any investment decision with respect to the Notes. Investors should make their investment decision solely on the basis of the Prospectus in final form and not rely on the summary terms and conditions contained in this presentation. These materials do not constitute or form part of, and should not be construed as, any offer for sale or subscription of, or solicitation of any offer to buy or subscribe for, any securities of Aldermore, nor should this presentation or any part of it form the basis of, or be relied on in connection with, any contract or commitment whatsoever. This presentation does not constitute a recommendation regarding any securities of Aldermore. Investment in the Notes will involve certain risks. A summary of the material risks relating to the Offering will be set out in the section headed “Risk Factors” in the Prospectus. There may be additional risks that are currently not considered to be material or of which Aldermore and its advisers or representatives are unaware. The information set out in this presentation may be subject to updating, revision, verification and amendment and such information may change materially. Aldermore is under no obligation to update or keep current the information contained in this document and any opinion expressed herein is subject to change without notice. The information contained in this presentation has not been independently verified by Aldermore or its advisors or auditors nor by any manager who the Issuer may appoint in connection with the Offering (the “Manager”) . No representation, warranty, express or implied, is made or given by or on behalf of Aldermore, the Manager or any of their respective directors, officers, employees, agents, affiliates or advisers, as to, and no reliance should be placed on the accuracy, completeness or fairness of the information or opinions contained in this presentation. None of Aldermore, the Manager nor any of their affiliates, advisers or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss whatsoever arising from any use of this document or its contents, or otherwise arising in connection with this presentation. Neither this presentation nor any copy of it, nor the information contained herein, in whole or in part, may be taken or transmitted into, or distributed, directly or indirectly to the United States its territories or possessions. Any failure to comply with this restriction may constitute a violation of U.S. securities laws. This presentation does not constitute and should not be construed as an offer to sell or the solicitation of an offer to buy securities in the United States, its territories or possessions or elsewhere. The Notes that are the subject of this presentation have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), nor with any securities regulatory authority of any state or other jurisdiction in the United States and may not be offered or sold within the United States (as such term is defined Regulation S under the Securities Act), except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with any applicable state securities laws. The Notes will only be offered and sold outside the United States pursuant to Regulation S under the Securities Act. No public offering of securities will be made in the United States or any other jurisdictions. This presentation is not being made, and this presentation has not been approved, by an authorised person for the purpose of section 21 of the Financial Services and Markets Act 2000 (the "FSMA"). This presentation is made to and directed only at persons (i) who are outside the United Kingdom, or (ii) having professional experience in matters relating to investments who fall within the definition of "investment professionals" in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotions) Order 2005 (the "Order") or (iii) high net worth entities, and other persons to whom it may lawfully be communicated, in accordance with the Order (all such persons together being referred to as "Relevant Persons"). This document is an advertisement and is not a prospectus for the purposes of applicable measures implementing Directive 2003/71/EC. Any person who is not a Relevant Person should not act or rely on this presentation or any of its contents. By accepting receipt of this communication the recipient will be deemed to represent that they possess, either individually or through their advisers, sufficient investment expertise to understand the risks involved in any purchase or sale of any financial instrument discussed herein. 1
Aldermore Group PLC: Proposed Tier 2 transaction Proposed transaction Aldermore overview H1 2016 performance update Summary Appendices 2
Aldermore Group PLC: Proposed Tier 2 transaction Key offering terms: • Issuer Aldermore Group PLC [ ] 2016 • Issue Date GBP [ ] Callable Dated Subordinated notes • Notes 10 years ([ ] 2026) • Maturity Reset Date (Year 5) ([ ] 2021) • Optional Calls Fixed at [ ] until the Reset Date, thereafter reset to the 5 year Mid-Swap Rate plus the Margin • Interest • Payable semi-annually in arrear • Special Calls At the option of the issuer following the occurrence of a Capital Disqualification Event or Tax Event • Governing Law English • Listing London • Denominations Denominations of GBP 100,000 and integral multiples of GBP 1,000 in excess thereof • Form of Notes Registered Note: Indicative only, summary terms should be read in conjunction with the full Prospectus 3
Aldermore Group PLC: Proposed Tier 2 transaction Proposed transaction Aldermore overview H1 2016 performance update Summary Appendices 4
A specialist lender, supporting the UK’s SMEs, landlords and homeowners… Customer-led strategy Delivering a track-record of profitable growth • Focused on supporting Britain’s underserved Net loans to customers (£bn) 1 6.8 SMEs, landlords and homeowners 6.1 4.8 • 2 Digitally-enabled modern bank 3.4 • 3 Straight-forward human underwriting approach • 4 We are Reliable, Expert, Dynamic and Straight- 2013 2014 2015 H1 2016 forward to deal with 5 • Strong broker relationships and direct distribution Net interest margin (1) (%) and cost of risk (2) (bps) 3.0 3.6 3.4 3 £1.5bn (1) 2013 2014 2015 H1 2016 42 23 19 20 5 (1) Net interest margin = net interest income / average net loans (2) Cost of risk = impairments / average net loans
…Building a diversified, granular and highly -secured portfolio Diversified loan portfolio (1) : Average loan size (1) Secured (2) (%) Portfolio 100% Asset finance Residential Asset mortgages 1 22% 22% c.£32k finance 82 Invoice £6.8bn 2% finance Net loans Invoice 14% c.£136k 2 finance Highly-secured 69 SME 40% BTL Mortgages and granular Mortgages portfolio built on select market SME Diversified sources of funding (1) : 3 c.£468k opportunities & Mortgages 64 underwriting RMBS Other FLS expertise Corporate 2% 3% 5% deposits BTL 4 c.£163k Mortgages 69 £7.1bn Funding base SME 21% deposits Residential 68% c.£139k 5 Mortgages 77 Retail deposits (1) At 30 June 2016 6 (2) Share of loan book at origination constituted by secured loans for Asset Finance; prepayment percentage for Invoice Finance; average loan-to-value ratio for SME Commercial Mortgages, Buy-to-Let and Residential Mortgages.
Aldermore Group PLC: Proposed Tier 2 transaction Proposed transaction Aldermore overview H1 2016 performance update Summary Appendices 7
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