“Helping Aboriginal Communities Build Their Own Futures on Their Own Terms” - PowerPoint Presentation

1. “Helping Aboriginal Communities Build Their Own Futures on Their Own Terms”Accessing Capital Markets for First Nations’ Project Financing NeedsFNFA PRESENTATION March, 2013FIRST NATIONS FINANCE AUTHORITY

2. The FNFA: What is it?2Created under “The Fiscal and Statistical Management Act”Not a Crown Corporation, AANDC or an Agent of CanadaNon-profit; 100% First Nations owned and governedBoard of Directors are all First Nation Chiefs/CouncilorsStructured after very successful pooled borrowing models

3. 3What are fnfa’s rates?FNFA Programs: 1. Interim Loans (Floating Rate) – Bridge Financing FNFA lends @ 2.50% 2. Fixed Rate Loans: Can have repayment terms of 30 years Longer Loan Terms Match Project Life

4. fnfa fixed rate loansEstimated Debenture rates as of March 2013:Interim Loan Rate = 2.50% currentlyDebenture Loan Rates: estimated in March, 2013 to be 10 Year fixed rate loans = 3.85%15 Year fixed rate loans = 4.25%20 Year fixed rate loans = 4.50%25 Year fixed rate loans = 4.75%30 Year fixed rate loans = 4.85%NOTE: All FNFA Borrowing Members receive the same rates.4

5. cost of a $1 Million FNFA loanExample: a $1,000,000 loan from the FNFA repaid over 30 years: Annual Payments = $66,330.10 Monthly Payments = $5,527.51Example: a $10,000,000 loan from the FNFA repaid over 30 years:Annual Payments = $663,301.00 Monthly Payments = $55,275.10NOTE: The above payments represent “fixed-rate” loans (i.e. the interest rate will not change for all 30 years).5

6. FNFA loans outstandingThe following loans have been made:Membertou = $12,000,000 @ 2.50% (Note 1) Tzeachten = $5,800,000 @ 2.50% (Note 1)Osoyoos = $10,200,000 @ 2.50% (Note 1)Sts’ailes, Splatsin and Taku River loan requests being processedNote 1: these loans will be rolled into a debenture in Fall 2012 6

7. The FNFA: Who are members?7 Canada Wide: 99 Scheduled to the FSMA16 approved Borrowing Members - Membertou , Metlakatla, Moricetown, Osoyoos, Shxwhá:y, Songhees, Splatsin, Sts’ailes, Taku River Tlingit, Tsawout, Tsleil-Waututh, Tzeachten, Wasauksing, We Wai Kai, Tk’emlups and KitselasScheduled First Nations

8. 8The FNFA: board membersThe FNFA welcomes a new Board of Directors Sept. 28th, 2012From left to right: Chief Willie Charlie – Sts’ailes Councillor Veronica McGinnis – Osoyoos Councillor Garry Albany – Songhees Councillor Catherine Hall - Tzeachten Chief Terry Paul (Chair) – Membertou Councillor Jody Wilson-Raybould (Deputy Chair) - We Wai Kai

9. 9What is fnfa’s mandate?To provide First Nations with access to the same financial loan opportunities that are available to other levels of government:

10. 10Pension Plans, Life Insurance Co.’s, Mutual Funds, Large Corporations, etc…(i.e. those organizations with cash to lend)What are the capital markets?

11. Why work under the fsma?11FMB CertificateFNFANo CollateralLow RatesAccess when neededIncreasing access as revenues rise FN Benefits

12. 12What projects does fnfaLend for?FNFA Lends for Projects that are: - Economic Development - Social Development - Community owned housing - Equity involvement (power projects, pipelines, etc…) - Land purchases - Infrastructure - Vehicles and equipment

13. PROPERTY TAXOTHER REVENUESFNFA LOANS REVENUESBANKSFOR PROFIT BUSINESSESLANDCOMMUNITY BUILDINGSROADSWATER/SEWERFIRST NATIONTHE FNFA and BANKS COMPLEMENT EACH OTHERFNFA’S purpose is to provide loans for: economic and social development purposes. FNFA cannot lend to people or private businesses.Bank’s can lend to people and to for-profit businesses. Also for infrastructure, etc.Each First Nation can choose what works for them!FIRST NATION

14. Eligible revenue streams to support a fnfa loanThe FNFA allows First Nations to support loans with their choice from two revenue sources: 1. Other Revenues (non-property tax): Royalties, Business revenues, Contract revenues, and Transfers from other levels of Government, IPP revenues.2. Property Tax collected by First Nations: From individuals or businesses who reside on First Nations lands. 14

15. 15Two recent fnfa clients’ storiesFNFA Loans Since July, 2012Membertou: refinanced existing bank loans plus infrastructure.Per Chief Terry Paul:“My community is saving $140,000 per month by refinancing our bank loan with FNFA . These savings are being re-invested into needed community infrastructure.”Tzeachten: borrowed for 4 infrastructure projectsPer Chief Glenda Campbell: “Never in my lifetime did I think Tzeachten would have access to affordable financing. What we currently pay banks to service a $1 million bank loan we can now service a $3 million FNFA loan.”

16. capital/ec. dev. planningFNFA’s role in the planning process:First Nation – outlines their desired capital and economic development projects Prioritize these projectsDetermines financing neededFNFA – outlines for each community how loans can be structured to allow more than one capital/Ec Dev project to start simultaneously16

17. how much can a First Nation borrow from the fnfa?17A First Nation can request FNFA loans to as much as their revenue streams can support:The “Borrowing Factors” for each $1 of revenue are:Federal/Provincial Transfer = 12.21Municipal Transfers = 11.61Independent Power Projects (IPP’s) = 12.06Provincial Gaming Revenues = 9.50Land Benefit Agreements = 6.63Contracts & Leases = 7.27Band Businesses = 3.77 to 8.59Property Tax = 3.77 to 12.21 NOTE: 30 years is an example; FNFA can lend up to 30 years

18. To calculate your community’s borrowing powerUse FNFA’s website: www.fnfa.caOnce in the website choose “Calculators” tab at the top of the pageOnce “Calculators” has been chosen use: “Other Rev Calculator”18

19. CONTACT INFORMATIONFirst Nations Finance AuthorityPH: 250-768-5253Steve Berna, COOVisit our website:www.fnfa.ca 19