Antillean Fund

The Instrument

Discounted Letters of Credit and Bills of Exchange

Slide Letters of Credit/ Bills of Exchange Discounted at an annual rate of 15- 20% depending on the importer and goods. Exporter Importer Provides goods to local importers important for Cuba’s development in fast growing industries such as tourism. Grants 3-24 mths credit terms. Debt documented by Letters of Credit and Bills of Exchange committing to payment on fixed date. Sells that instrument at a discount to generate working capital. Cuban state-owned exclusive distributors. We finance goods that Cuba needs more of. Antillean Fund Provides liquidity to exporters by purchasing the instrument at a discount. Cuban Bank In some cases, provides letters of credit to enhance credit of the Importer.

The Mechanism

Discounted Letters of Credit and Bills of Exchange

Slide Cuban Bank May write Letter of Credit Exporter receives either Bill of Exchange from Importer, or Letter of Credit from Importer’s bank Exporter Builds-in finance cost to offered price Exporter sells goods to Importer at prices with built-in finance costs. Importer Pays price absorbing finance cost Importer sells goods onwards and collects money at its Cuban Bank Exporter sells the Letter of Credit or Bill of Exchange to Antillean fund at a discount of 15-20% annually to generate working capital. Antillean Fund Antillean fund collects from local bank at maturity date.

The Returns

Fund fees and investor returns

Slide 20% 20% Portfolio Return - 0.2% - 19.8% After admin/ custody/regulatory fees 18.8% After 1% management fee 1% - 20% 15% After 20% performance fee Targeted Investor Return