Investment Offer

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Challenger IM LiFTS 1 Notes Offer

Morgans is a Joint Arranger and Joint Lead Manager to the Offer¹
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Challenger IM Capital Limited (“Issuer”) has announced it is seeking to raise up to $350 million² through the issue of up to 3.5 million of Challenger IM Listed Floating rate, Term, Securities (LiFTS) 1 Notes (“Notes”). Notes are unsecured, deferrable, redeemable and floating rate debt securities with a face value of $100 (Face Value) to be listed on the ASX with the ticker code “CIMHA".
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The Offer includes a Broker Firm Offer to clients of Morgans. Please contact your Morgans Adviser to discuss the suitability of the Notes given your specific investment objectives, current portfolio holdings and if appropriate secure an allocation.

You should ensure you understand the Notes Terms and risks of investing in Notes and consider whether it is an appropriate investment for your particular circumstances. It is important that you read the Prospectus in full before deciding to invest in Notes.
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About the Manager

The assets of the Issuer are managed by Challenger Investment Partners Ltd (“Challenger IM” or “Manager”), part of the Challenger Group, an Australian investment management company with over $125 billion assets under management³. The Manager is a subsidiary of Challenger Limited, an ASX-listed company (ASX: CGF) and Australia's largest annuity provider as well as one of its largest active fund managers⁴.
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About the Notes

The Notes are a promise by the Issuer to pay monthly Interest⁵ and the Face Value of the Notes on the Maturity Date. The Issuer will invest the proceeds from the Notes in a portfolio of public and private credit investments (debt instruments) in Australia, New Zealand and global developed markets across a range of credit sub-strategies, including but not limited to corporate, commercial real estate (non-construction) loans and asset backed finance (ABS). This is achieved by a combination of direct investment and units in funds managed by Challenger IM.
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Challenger LiFTS 1 Notes Overview

Key highlights of investing in Notes include:

Monthly floating rate interest payments
The interest rate is equal to the 1-month Bank Bill Rate plus 2.75% p.a. (net of fees), payable monthly i.e. approximately 6.45% p.a⁶.
First loss equity and junior note buffer
Challenger Group entities will invest at least $10 million in equity and additional subordinated Junior Notes between $13 million and $22.8 million (depending on the final amount raised), providing a first loss buffer of at least 6% to support Noteholder interests in the event there is a shortfall in income or capital necessary to pay the interest and Face Value owing on the Notes.
Cumulative interest payments
Interest payments may be deferred if there is insufficient income. Unpaid interest will accrue and be paid on the next Interest Payment Date on which there is sufficient investment income (comprising the deferred Interest Payment and the accrued interest). This aims to restore investors to their original economic position, as if the interest payments had not been deferred.
Diversified underlying portfolio
The Issuer will invest in a diversified portfolio of public and private credit investments (debt instruments). The portfolio includes direct investment and/or units in funds managed by Challenger IM.
Defined repayment date
The Notes have a Target Repayment Date of 4 September 2031 (6 years) and Maturity Date of 6 September 2032 (7 years). The Notes will pay a Redemption Amount of $101 per Note if they are redeemed more than 12 months prior to the Target Repayment Date⁷.
Step Up Rate
If the Notes are not redeemed by the Target Repayment Date (6 years from issue), the margin steps up by 1.00% per annum to 3.75%, offering an increased return to investors until Maturity.
Experienced investment manager
Challenger IM has experience investing in public and private credit through multiple credit cycles including the Global Financial Crisis, having commenced lending in 2005. The team of over 40 individuals within the Manager are backed by risk management and operational support from the ASX-listed Challenger Group.
ASX liquidity
The Notes are expected to be quoted on the ASX under the code "CIMHA"⁸.

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Key Features of the Offer

Opportunity to participate in the Broker Firm Offer via Morgans as a Joint Arranger and Joint Lead Manager to the Offer.
Notes have a Face Value of $100 and are redeemable by the Issuer on 4 September 2031⁹ (6 years). If not redeemed by this date, the Margin will increase by 1.00% until the Maturity Date.
If not redeemed before, Notes will mature on 6 September 2032 (7 years).
Monthly floating rate interest payments equal to the 1-month Bank Bill Rate plus a Margin of 2.75% (net of fees) (“Interest Rate”) i.e. approximately 6.45% p.a.⁶
First loss income and capital protection provided by Challenger Group entities, providing a minimum of 6% first loss buffer supporting Noteholders. The Notes will rank ahead of and have priority over the Equity Investor Shares and Junior Notes¹⁰.
While the Issuer intends to pay interest on a monthly basis, it may defer the interest payment if there is insufficient income. Deferred amounts will accrue interest at the Interest Rate. This aims to restore investors to their original economic position, as if the interest payments had not been deferred.
The first interest payment is expected to be paid on 20 November 2025.
ASX listed liquidity expected to be quoted on ASX under the code CIMHA⁸.

Issuer: Challenger IM Capital Limited
Transaction: Challenger IM Capital LiFTS 1 Notes Offer
Morgans Role:  Joint Arranger and Joint Lead Manager
Offer Size: $350 million
Offer Launch Date: 11 August 2025
Expected Broker Firm Close Date: 26 August 2025

Before applying for Notes, investors should be satisfied that they have a sufficient understanding of the risks involved in making an investment in the Notes and should consider whether the Notes are a suitable investment for them. Notes are not guaranteed by Challenger Investment Partners Limited or any other member of the Challenger Group or any other person.

The Notes are not “simple corporate bonds” and do not comply with the requirements for simple corporate bonds under the Corporations Act.

An investment in Notes is subject to a range of risks, which are more fully detailed in Section 7 of the Prospectus. If any of these risks or other material risks eventuate, it will likely have an adverse impact on the Issuer’s future financial performance and position and may impact the return on the Notes. An investment in the Notes also carries investment risks such as loss of invested capital, Notes trading at below Face Value, inability to buy and sell Notes on the ASX, volatility of returns and the Note not delivering the Interest Payments set out in the Prospectus.

Cooling off rights do not apply to an investment in the Notes issued pursuant to the Offer. This means that you will be unable to withdraw your Application once it has been accepted.
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Design and Distribution Obligations (DDO)

The Corporations Act imposes obligations on the Issuer to determine an appropriate Target Market for the Offer. Morgans as the distributor must take steps which result in the Offer being distributed only to investors that are within the Target Market.
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Footnotes

Morgans will receive fees for its role.
The Offer size may be less than $350 million, subject to a minimum raise of $200m.
As at 31 March 2025.
Plan For Life – September 2024 – based on annuities under administration; Calculated from Rainmaker Roundup, September 2024 data.
Subject to the deferral of payment described in the Prospectus.
Based on 1-month Bank Bill Rate of 3.70%.
Notes may be mandatorily redeemed on each Interest Payment Date. If a redemption date falls on a date that is more than 12 months prior to the Target Repayment Date, the redemption will be at a price of $101 per Note. Redemptions less than 12 months before (or after) the Target Repayment Date will be at Face Value. The Notes may also be redeemed by the Issuer in case of a Tax Event and, at the request of the Noteholders by Ordinary Resolution, in case of a Change of Control Event over the Manager (in each case at Face Value).
Application will be made to list Notes on ASX.
This is a target only and the Issuer may elect at its discretion not to redeem and repay the Notes at the Target Repayment Date.
The Issuer reserves the right to issue future series of notes (Series), and multiple tranches within each Series. All future Series will rank equally with, or behind, the Notes.
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More information

Investors should read the Prospectus in full to understand the features and risks of the Offer. Please contact your Morgans adviser to apply under the Offer.

If you have any questions about the Offer, please contact your Morgans adviser, call 134 226 or find your nearest office.
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Download Prospectus

The Offer is being offered only in Australia and the prospectus will only constitute an offer to a person receiving it in Australia. Not for distribution, directly or indirectly, in the United States or to, or for the account or benefit of, US Persons, except in accordance with an available exemption from the registration requirements of the US Securities Act. The distribution of the Prospectus (including an electronic copy) in jurisdictions outside Australia may be restricted by law.
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