FAQ about the new capital-raising model
Why is Oikocredit transitioning to a new capital-raising model?More questions
Oikocredit wants to simplify and unify its capital-raising model across different countries by replacing different investment products with participations. This is expected to free up more resources for investing in loans, equity stakes, capacity building and community-focused projects that benefit Oikocredit’s partners and the low-income clients served. It will also allow Oikocredit and its support associations to focus more on activities promoting sustainable development, together with the cooperative’s network of investors, members and partners.
What are the differences between the new and the old models?More questions
Under the new model, your depository receipts will be converted to participations, a non-voting equity instrument which is issued by Oikocredit. Participations are materially similar in financial terms to the depository receipts.
Compared to depository receipts issued by OISF, there continue to be no costs for the administration of your investment. Furthermore, there will be no change to your opportunity to redeem, dividend provisions, the risk profile of the investment or who you can contact if you have questions about your investment.
In addition, it has been made explicit in the participation terms how the net asset value (NAV) in foreign currencies is calculated should the NAV fall below the nominal value. Read more below in question “At which price will I be able to sell participations under the new model?”.
When will the new capital-raising model come into effect?More questions
Subject to receipt of required responses from regulators, expected by the end of 2022, we plan to roll out the new capital-raising model in two phases (see question “What will change for me”). The changes are planned to come into effect as of 1 January 2023 and 1 April 2023. The definite timeline will be confirmed via an announcement on this website. Investors will also be updated on the progress via letters.
What will change for me?More questions
The changes will take place in two phases. Before each phase, more detailed information will be made available on this website.
- 1 January 2023 → 1 April 2023: Subject to the outcome of regulatory processes, as of 1 January 2023, Oikocredit will no longer offer shares but participations. As of this moment, the underlying product for all existing investments through OISF depository receipts will be Oikocredit participations.
- From 1 April 2023: With effect from 1 April 2023, all depository receipts that you hold will automatically be exchanged for participations and you will become a direct investor in Oikocredit.
If existing investors do not agree with the change from depository receipts to participations, they may request a redemption of their depository receipts. They can do so by completing and returning a redemption form (organization redemption form or individual redemption form).
At which price will I be able to sell participations under the new model?More questions
How the redemption price is set is unchanged compared to depository receipts. Oikocredit will redeem investors at the net asset value (NAV) per participation. If the NAV per participation is equal to or higher than the nominal value of EUR 200, which is Oikocredit's benchmark currency, then redemption will be at the nominal value of CAD 200. While Oikocredit International and OISF have never redeemed investors at a lower price than the nominal value in the past, it has always been possible to do so under the current model, and investors have always faced the risk of receiving back less money than they invested.
How the redemption price of a participation will be calculated will be explained in more detail in an annex to the participation terms. These terms will be made available on this website before the change takes place.
Example of redemption price calculation
Scenario: NAV above nominal value Scenario: NAV below nominal value Investor Jones submitted a redemption request for CAD 750. This investor holds 21.3 participations. The net asset value of the participation in Canadian dollars was determined at CAD 212, and hence the redemption price was determined at CAD 200 per participation (the nominal value). Following Oikocredit’s positive decision on the issuance and redemption of participations, Oikocredit will pay CAD 750 to investor Jones, assuming no taxes must be withheld. His investment will be reduced by 3.75 participations and will be 17.55 participations. Investor Jones submitted a redemption request for CAD 750. This investor holds 21.3 participations. The net asset value of the participation in Canadian dollars was determined at CAD 176, and hence the redemption price was determined at CAD 176 per participation. Following Oikocredit’s positive decision on the issuance and redemption of shares, Oikocredit will pay CAD 750 to investor Jones, assuming no taxes must be withheld. His position will be reduced by 4.26 participations and will be 17.04 participations.
What is the net asset value per participation and how will it be determined?More questions
The net asset value (NAV) describes the value of a participation as at the last calendar day of the month. The net asset value per participation is calculated in four steps:
1. Determining the ‘total investor amount’ by multiplying the number of participations outstanding for each currency, by the nominal value and by the exchange rate against the euro (obtained from Bloomberg on the last calendar day of the month). This provides us with the total investor amount in euros.
2. Determining the ‘net asset value (NAV)’ of Oikocredit by deducting the non-equity liabilities amount from the total assets amount. We establish this from Oikocredit’s balance sheet as at the last calendar day of each month.
3. Determining the ‘net asset value (NAV) quotient’ by dividing the net asset value of Oikocredit (from step 2) by the total investor amount (from step 1). The NAV quotient will tell us how many cents are available for each euro in the total investor amount. If the quotient is higher than 1, it follows that the net asset value per participation is above the nominal value. If that is the case, issuance and redemption will take place at nominal value.
4. Determining the exact net asset value of the participations issued in each currency by multiplying the NAV quotient with the nominal value of the participation.
How does this affect Oikocredit’s support association in Canada?More questions
The work of Oikocredit’s support association in Canada is unaffected by these changes. Oikocredit Canada Support Association is led by a volunteer board and has the responsibility of carrying out Oikocredit's grassroots education and outreach initiatives. This includes representing Oikocredit at local events, as well as mounting webinars, workshops and annual meetings to educate the public about investment and development, and Oikocredit's work around the world. Oikocredit will continue supporting the support association in this important work.
I have more questions. Who can I ask?More questions
You can contact the investor support team in the Netherlands via the email
If you would like to speak with someone, email us at firstname.lastname@example.org with your preferred time(s) and phone number, and we will do our best to accommodate your shared preferences.