“Helping Aboriginal Communities Build Their Own Futures on Their Own Terms” Accessing Capital Markets for First Nations’ Project Financing Needs FNFA PRESENTATION March, 2013 F IRST N ATIONS F INANCE A UTHORITY

THE FNFA: WHAT IS IT? 2  Created under “The Fiscal and Statistical Management Act”  Not a Crown Corporation, AANDC or an Agent of Canada  Non-profit; 100% First Nations owned and governed  Board of Directors are all First Nation Chiefs/Councilors  Structured after very successful pooled borrowing models

3 WHAT ARE FNFA’S RATES? FNFA Programs: 1. Interim Loans (Floating Rate) – Bridge Financing FNFA 2.50% 2. Fixed Rate Loans: Can have repayment terms of 30 years Longer Loan Terms Match Project Life

FNFA FIXED RATE LOANS Estimated Debenture rates as of March 2013: Interim Loan Rate = 2.50% currently Debenture 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

COST OF A $1 MILLION FNFA LOAN Example: a $1,000,000 loan from the FNFA repaid over 30 years:  Annual Payments = $66,  Monthly Payments = $5, Example: a $10,000,000 loan from the FNFA repaid over 30 years:  Annual Payments = $663,  Monthly Payments = $55, NOTE : The above payments represent “fixed-rate” loans (i.e. the interest rate will not change for all 30 years). 5

FNFA LOANS OUTSTANDING The following loans have been made:  Membertou = 2.50% (Note 1)  Tzeachten = 2.50% (Note 1)  Osoyoos = 2.50% (Note 1)  Sts’ailes, Splatsin and Taku River loan requests being processed  Note 1: these loans will be rolled into a debenture in Fall

The FNFA: Who are members? 7 Canada Wide: 99 Scheduled to the FSMA  16 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 Kitselas Scheduled First Nations

8 THE FNFA: BOARD MEMBERS The FNFA welcomes a new Board of Directors Sept. 28 th, 2012 From 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 WHAT 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 Pension Plans, Life Insurance Co.’s, Mutual Funds, Large Corporations, etc… (i.e. those organizations with cash to lend) WHAT ARE THE CAPITAL MARKETS?

WHY WORK UNDER THE FSMA? 11 FMB Certificate FNFA -No Collateral -Low Rates -Access when needed -Increasing access as revenues rise Address Social & Economic Needs of FN Proven Governance Systems Manage Wealth FN Benefits

12 WHAT PROJECTS DOES FNFA LEND 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

PROPERTY TAXOTHER REVENUES FNFA LOANS REVENUES BANKS FOR PROFIT BUSINESSES LAND COMMUNITY BUILDINGS ROADS WATER/SEWER FIRST NATION THE FNFA and BANKS COMPLEMENT EACH OTHER FNFA’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

E LIGIBLE REVENUE STRE AMS TO SUPPORT A FNFA LOAN The 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 TWO RECENT FNFA CLIENTS’ STORIES FNFA Loans Since July, 2012 Membertou: 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 projects Per 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.”

CAPITAL/EC. DEV. PLANNING FNFA’s role in the planning process:  First Nation – outlines their desired capital and economic development projects  Prioritize these projects  Determines financing needed  FNFA – outlines for each community how loans can be structured to allow more than one capital/Ec Dev project to start simultaneously 16

HOW MUCH CAN A FIRST NATION BORROW FROM THE FNFA? 17 A 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 =  Municipal Transfers =  Independent Power Projects (IPP’s) =  Provincial Gaming Revenues = 9.50  Land Benefit Agreements = 6.63  Contracts & Leases = 7.27  Band Businesses = 3.77 to 8.59  Property Tax = 3.77 to NOTE: 30 years is an example; FNFA can lend up to 30 years

TO CALCULATE YOUR COMMUNITY’S BORROWING POWER  Use FNFA’s website:  Once in the website choose “Calculators” tab at the top of the page  Once “Calculators” has been chosen use:  “Other Rev Calculator” 18

CONTACT INFORMATION First Nations Finance Authority PH: Steve Berna, COO Visit our website: 19