Bond Mogo AS 10% ( LV0000880029 ) in EUR

Issuer Mogo AS
Market price 100 %  ⇌ 
Country  Latvia
ISIN code  LV0000880029 ( in EUR )
Interest rate 10% per year ( payment 12 times a year)
Maturity 29/03/2021 - Bond has expired



Prospectus brochure of the bond Mogo A.S LV0000880029 in EUR 10%, expired


Minimal amount 1 000 EUR
Total amount 10 000 000 EUR
Detailed description Mogo Finance Technology Inc. (Mogo) is a Canadian fintech company offering a range of financial technology products and services, including digital lending, investing, and cryptocurrency trading.

The Bond issued by Mogo AS ( Latvia ) , in EUR, with the ISIN code LV0000880029, pays a coupon of 10% per year.
The coupons are paid 12 times per year and the Bond maturity is 29/03/2021









AS "mogo"
Reg. No: 50103541751
LEI: 213800DOKX626GYVOI32



Terms of the Notes Issue



Type of Security: Notes
Nominal: EUR 1,000
Nominal value of the issue: EUR 10,000,000
Annual coupon rate: 10%
Maturity: 31 March 2021




Arranger:


www.blueorangebank.com


27 November 2017


These Terms of the Note Issue do not constitute an offer to sell or a solicitation of an offer to
buy the Notes in any jurisdiction to any person to whom it is unlawful to make such an offer or
solicitation in such jurisdiction.



AS "mogo" Terms of the Notes Issue

Table of Contents

Terms and abbreviations used ........................................................................................................................ 3
1.
Summary ..................................................................................................................................... 4
2.
Risk Factors .................................................................................................................................. 9
3.
Party responsible for the Terms of the Issue .......................................................................... 12
4.
Information on Notes ............................................................................................................... 13
5.
Special Conditions ..................................................................................................................... 17
6.
Taxes .......................................................................................................................................... 20
7.
Terms of the Offering ............................................................................................................... 23
8.
Including of the Notes on the market and trading regulations .............................................. 25
9.
Additional Information ............................................................................................................. 26
10.
The Issuer .................................................................................................................................. 27


2



AS "mogo" Terms of the Notes Issue
Terms and abbreviations used
Agent
:
A person authorized to represent the Issuer and to perform certain
tasks
Arranger
:
AS BlueOrange Bank (registration number: 40003551060, legal
address: Smilsu iela 6, Riga, LV-1050, Latvia)
Business Day
:
Business Day is the day when the Nasdaq CSD system is open and
operational
Coupon
:
Interest on Notes calculated in accordance with the Section 4.2.7.
"Coupon payments"
Custodian
:
Credit institution or investment brokerage company that has
obtained the FCMC license or is entitled to do business and to keep
securities in accordance with its country of registration laws
EUR
:
Euro (single currency of the member states of the European
Monetary System)
FCMC
:
Financial and Capital Market Commission
First North
:
Multilateral Trading Facility (MTF) First North operated by Nasdaq
Riga
First Settlement Date (Issue
:
The date when interest on the Notes start to accrue and is 1
Date)
December 2017
Interest calculation period
:
The period of time between the First Settlement Date and the date
of the first payment or between two Coupon payment dates
Issuer or Mogo
:
AS "mogo" (registration number: 50103541751, legal entity
identifier: 213800DOKX626GYVOI32, legal address: Skanstes iela
50, Riga, LV-1013, Latvia)
Legal acts
:
All legal acts including FCMC, Nasdaq Riga and Nasdaq CSD
regulations, which are in force in Latvia at the time of the Notes
issue, as well as prior to the maturity date of the Notes
Minimum Settlement Unit
:
The minimum amount which can be held/traded, which is equal to
EUR 1,000
Nasdaq CSD
:
Nasdaq CSD SE (registration number: 40003242879, legal address
Vau iela 1, Riga, LV-1050, Latvia)
Nasdaq Riga
:
AS "Nasdaq Riga" (registration number: 40003167049, legal
address: Vau iela 1, Riga, LV-1050, Latvia)
Nominal
:
Face value of a Note
Note
:
Debt security that is issued by the Issuer according to the Terms of
the Issue
Noteholder
:
Private person or legal entity that is an owner of one or more
Notes and has a claim against the Issuer as stipulated by the Legal
acts
Potential Investor
:
A private person or legal entity that has, according to the terms
stated in the Terms of the Issue, expressed interest or is planning
to purchase for its own account one or more Notes
Settlement Unit Multiple
:
Multiple that defines that the settlement quantity or nominal must
be a multiple of the defined value, which is EUR 1,000
Terms of the Issue
:
This document, which entitles the Issuer to execute the Issue and
the initial offering of the Notes


3



AS "mogo" Terms of the Notes Issue
1.
Summary
Part A. Introduction and Warnings
Element and Request for
Information
the Provision of
Information
A.1
Warning
to
This summary should be read as introduction to the Terms of the
investors
Issue;
Any decision to invest in the securities should be based on
consideration of the Terms of the Issue as a whole by the Potential
Investor;
Where a claim relating to the information contained in the Terms
of the Issue is brought before a court, the plaintiff Potential
Investor might, under the national legislation of the Member
States, have to bear the costs of translating the Terms of the Issue
before the legal proceedings are initiated; and
Civil liability attaches only to those persons who have tabled the
summary including any translation thereof, but only if the
summary is misleading, inaccurate or inconsistent when read
together with the other parts of the Terms of the Issue, key
information in order to aid Potential Investors when considering
whether to invest in such securities.
Part B. Issuer and any Guarantor
B.1
Legal name and The Issuer's legal name is AS "mogo".
commercial name
of the Issuer
B.2
The domicile and Country of location: Republic of Latvia.
legal form of the Legal form: joint-stock company, legal status -- legal person.
Issuer,
the Date and place of registration: in the Commercial Register of the Republic
legislation under of Latvia on 3 May 2012
which the Issuer Registration number: 50103541751
operates and its Legal address: Skanstes iela 50, Riga, LV-1013, Latvia.
country
of The company's country of foundation is the Republic of Latvia.
incorporation
The main regulatory enactments which regulate Issuer's activities:
The Commercial Law of the Republic of Latvia;
Cabinet Regulation No. 245 of 29 March 2011, "Regulations
Regarding a Special Permit (Licence) of Consumer Credit
Services";
Cabinet Regulation No. 691 of 25 October 2016, "Regulations On
Consumer Credit" (these Regulations determine the requirements
in relation to the content of consumer credit service
advertisements, the procedures by which information shall be
provided prior to entering into a consumer credit agreement, and
the content of information, requirements for provisions of
additional services, the requirements to be set out for the credit
agreement and the information to be contained therein, the
methodology for the calculation of the annual percentage rate of
charge, foreign currency credit and variable interest rate credit
provisions, the procedures for informing consumers during the
duration of the credit agreement, the procedures for early
repayment of credit and fair reduction of the total costs of the
credit, the requirements applicable to individual types of credit
agreements and the obligations of credit intermediaries, advisory
requirements, as well as the legal framework for consumer credit
for pledging movable property);
Law On Out-Of-Court Consumer Dispute Resolution Bodies (the
purpose of this law is to to lay down uniform requirements for the
out-of-court dispute resolution bodies, in order to enable
4



AS "mogo" Terms of the Notes Issue
consumers to exercise and protect their lawful rights through
independent, impartial, transparent, efficient, fast, and fair out-
of-court dispute resolution);.
Personal Data Protection Law (the purpose of this Law is to protect
the fundamental human rights and freedoms of natural persons,
in particular the inviolability of private life, with respect to the
processing of data regarding natural persons);
Consumer Rights Protection Law (the purpose of this Law is to
ensure that consumers are able to exercise and protect their
lawful rights when entering into contracts with manufacturers,
traders or service providers);
Unfair Commercial Practice Prohibition Law (the purpose of this
Law is to ensure the protection of the rights and economic
interests of the consumers by prohibiting the performers of
commercial practices from utilising unfair business-to-consumer
commercial practices);
Law On Extrajudicial Recovery of Debt (the purpose of this Law is
to regulate the rights and duties of a creditor and a provider of
debt recovery services in the field of debt recovery).
B.3
A description of, The main area of Issuer's activity is the leaseback of vehicles or crediting

and key factors against the vehicle already owned by the client and financial leasing of
relating to, the vehicles.
nature
of
the
Issuer's
current
operations and its
principal activities
B.4a
A description of At the moment of signing the Terms of the Issue, the Issuer has no
the
most information at its disposal regarding any recent tendencies that have
significant recent negatively affected the Issuer or the activity of the crediting industry.
trends
affecting
the Issuer and the
industries in which
it operates
B.4b
A description of At the moment of signing the Terms of the Issue, the Issuer has no
any known trends information at its disposal regarding any identified tendencies that have
affecting
the negatively affected the Issuer or the activity of the crediting industry.
Issuer
and
the
industries in which
it operates
B.5
A description of The Issuer is operating company in Latvia within Mogo Group and it holds
the group and the no significant interest in other subsidiaries within the Mogo Group.
Issuer's position
within the group
B.6
Main shareholders The main shareholder of the Issuer is a holding company registered in
of the Issuer
Luxembourg "Mogo Finance S.A." (registration No. B 174.457, legal
address: 9, Allee Schefer, L-2520, Luxembourg) which owns 98% shares of
the company.

At the moment of signing the Terms of the Issue, the Issuer has no
information at its disposal regarding any agreements, the fulfilment of
which might cause changes in the Issuer's control.
B.7
Selected historical Issuer's financial figures, including audited annual reports and unaudited
key
financial quarterly reports are available on Nasdaq Riga website:
information
http://www.nasdaqbaltic.com/market/?instrument=LV0000801363&list=
1&pg=details&tab=reports

The Issuer's financial auditor of the last audited annual report is
PricewaterhouseCoopers SIA.
5



AS "mogo" Terms of the Notes Issue
As of the publication of the last audited financial statement, the financial
situation or performance of the Issuer has not worsened. The Issuer is
unaware of any factors, claims, obligations, or events which would
negatively affect the financial situation or performance of the Issuer in
future.
B.8
Selected
pro Issuer does not provide pro forma financial information.
forma
financial
information
B.9
Profit forecast or The profit/loss forecast has not been carried out.
evaluation
B.10
Objections in the The reports on the audit of the financial statement for 2015 and 2016
financial
contained no objections.
information of the
audit report
B.11
Issuer's equity
The last audited total equity of the Issuer is EUR 8,321,447.
B.12
Forecasts
The forecasts regarding the Issuer contain no crucial negative changes after
regarding
the the publication of the last audited financial statements.
Issuer

B.13
A description of No events related to the Issuer, which are crucial for preventing Issuer's
any recent events insolvency, have been established.
particular to the
Issuer which are to
a material extent
relevant to the
evaluation of the
Issuer's solvency
B.14
Issuer's
The Issuer is an operational company within the group, and it has no
dependency
significant dependence on other group's entities.
B.15
Description of the The main area of Issuer's activity is the leaseback of vehicles or crediting
Issuer's principal against the vehicle already owned by the client and financial leasing of
activities
vehicles.
B.16
Control over the 98% of Issuer's shares belong to a holding company "Mogo Finance S.A."
Issuer

B.17
Credit
ratings There is no credit rating assigned neither to the Issuer nor to the Notes
assigned to the issue.
Issuer or its debt
securities
B.18 ­ B.50
Not applicable.

Part C. Securities
C.1
Type and category Notes issue ISIN (International Security Identification Number) will be
of securities, ISIN
allocated by Nasdaq CSD.
C.2
Currency of the Currency of the Notes issue is euro (EUR).
issue of securities
C.3 ­ C.4
Not applicable.
C.5
Restrictions
for The Notes are freely transferable securities and can be pledged. However,
free transferability the Notes cannot be offered, sold, resold, transferred or delivered in such
of securities
countries or jurisdictions or otherwise in such circumstances in which it
would be unlawful or require measures other than those required under
the laws of the Republic of Latvia and the United States of America.
C.6 ­ C.7
Not applicable.
C.8,
Rights arising from Noteholders have a right to receive Coupon and Nominal payments,
C.9
the Notes
exercise other rights as stipulated in the Terms of the Issue.
The Coupon rate is 10% (ten per cent) per annum. The Issuer will withhold
taxes according with applicable laws in the Republic of Latvia.

6



AS "mogo" Terms of the Notes Issue
The Coupon starts to accrue on the First Settlement Date - 1 December
2017. Interest payments start from 31 December 2017 and are made on
the last day of each month. The maturity date of Notes is 31 March 2021,
Nominal amount payments are made once a quarter and on the last day of
a quarter, starting from 30 June 2019.

If the Issuer takes decision on the early redemption of Notes, either in full
or partially, the Issuer shall notify Noteholders at least 10 (ten) Business
Days prior to the redemption date of Notes, with intermediation of Nasdaq
CSD, or, if Notes are included in First North, via Nasdaq Riga information
system.

The Issuer can make early redemption, either full or partial, starting from
31 December 2017 on the last day of each month. When repaying the
Nominal amount of Notes, the Issuer has to pay by 1% more for the
Nominal amount of Notes to be repaid. The minimum redemption size of
Nominal amount per Note is EUR 10 (ten euro) with the next step of EUR
10 (ten euro). In cases when the Nominal amount is repaid in full, the
redemption step of EUR 10 (ten euro) shall not be applied. Notes are not
secured by pledge and third parties have not guaranteed for Notes and
Coupon payments related thereto.

Within the framework of the issue of Notes it is not provided for, yet at the
same time there are no restrictions set for Noteholders' right to create
and/or authorize an organization/person that represents the legal interests
of all Noteholders or part thereof.
C.10
Interest payment Not applicable. There is no derivative component embedded in the terms
of securities based of the Notes.
on
derived
financial
instruments
C.11
Inclusion of Notes The Issuer plans to list the Notes on the alternative market Nasdaq First
in the regulated North.
market
C.12
Minimum
The Nominal value of one Note is EUR 1,000 (one thousand euro).
denomination of
the issue
C.13 ­ C.22
Not applicable.
Part D. Risks
D.1,
Key
information When making an investment in Notes, the Noteholder undertakes certain
D.2
on the key risks financial risks. The main risk factors that influence the Issuer are changes in
that are specific to regulatory enactments, macroeconomics risk, licensing risk, competition
the Issuer or its risk, financial risk, dependence on service providers and managing
industry
employees risk, operational risk and credit risk of clients.
D.3
Key
information When investing funds in Notes, investors undertake the following risks
on the key risks related to debt securities: Notes repayment risk, delisting risk, liquidity risk,
that specific to the price risk and tax risk.
securities
D.4 ­ D.6
Not applicable.
Part E. Offer
E.1 ­ E.2a
Not applicable.
E.2b
Reasons for the Funds that are raised as a result of the Notes issue will be used in the
offer and use of ordinary course of business of the Issuer.
proceeds
when
different
from
making
profit
and/or
hedging
certain risks
7



AS "mogo" Terms of the Notes Issue
E.3
A description of Not applicable.
the
terms
and
conditions of the
offer
E.4
A description of AS BlueOrange Bank (the Arranger) is organizing the Notes issue and may
any interest that is have other business transactions with the Issuer.
material to the
issue/offer
including
conflicting
interests
E.5 ­ E.6
Not applicable.
E.7
Estimated
All the expenses related to the acquisition and custody of Notes are borne
expenses charged by an investor in compliance with the price-list of a credit institution or
to the investor by investment service provider, through which the investor purchases and
the issuer or the keeps Notes. The Issuer is not obliged to compensate for expenses incurred
offeror
by the investor.

The investor may have additional tax payment obligations related to Notes
depending on the investor's country of residence. The Issuer wil deduct
taxes from Coupon payments in compliance with the applicable Legal acts
of the Republic of Latvia.


8



AS "mogo" Terms of the Notes Issue
2.
Risk Factors
2.1.
Important note
The risks indicated in this section may reduce Issuer's ability to fulfil its obligations and cause its
insolvency in the worst-case scenario. Noteholders have to take into account that Notes are not secured
with collateral and third parties have not guaranteed Notes and Coupon payments related thereto. This
section may not feature all the potential risks, which may affect the Issuer.
2.2.
Changes in regulatory enactments
The Issuer carries out its activity in Latvia and most of the risks, which affect it, are related to the general
economic situation in the country and regulatory enactments adopted by the Saeima of the Republic of
Latvia or Cabinet of Ministers of the Republic of Latvia.
Currently, the activity of the Issuer and other non-bank credit companies in Latvia is regulated by Cabinet
Regulation No. 245 of 29 March 2011, "Regulations Regarding a Special Permit (Licence) of Consumer
Credit Services", which, among other things, determines the need for a licence, the price of which is EUR
71,140, as well as annual prolongation of licence operation, the price of which is EUR 14,225; by Cabinet
Regulation No. 691 of 25 October 2016, "Regulations On Consumer Credit", Law On Out-Of-Court
Consumer Dispute Resolution Bodies, Personal Data Protection Law; Unfair Commercial Practice
Prohibition Law; Law On Extrajudicial Recovery of Debt, and Consumer Rights Protection Law.
Significant changes in existing regulatory enactments or implementation of new regulations in the
Republic of Latvia might negatively affect the business and solvency of the Issuer.
2.3.
Macroeconomics risk
The economic situation in Latvia, where the Issuer carries out its entrepreneurial activity, is assessed as
stable, which is supported by both macroeconomic data, such as GDP and employment indicators, and
credit ratings assigned by international rating agencies -- Moody's Investors Service, Standard & Poor's
Financial Services, and Fitch Ratings -- which have been increased over the recent years.
At the moment of signing the Terms of the Issue Standard & Poor's credit rating for Latvia stands at A-
with positive outlook, Moody's credit rating for Latvia was last set at A3 with stable outlook, Fitch's credit
rating for Latvia was last reported at A- with stable outlook.
2.4.
Licensing Risk
Consumer Rights Protection Centre (CRPC) carries out supervisory functions for consumer finance and
debt collection companies in the Republic of Latvia. CRPC issues licenses for companies in these sectors.
The Issuer is licensed consumer finance company and has obtained non terminated license.
CRPC is entitled to withdraw licenses in case there are breach of regulations set forth by Legal acts of the
Republic of Latvia. The risk is managed at higher management level by following regulations and
recommendations.
2.5.
Competition risk
As of the date of signing Terms of the Issue, there were 64 licensed consumer finance companies which
operated in the territory of Latvia, offering different credit services; 20 of them offer financing lease
and/or leaseback products. Five companies out of 20 competitors of the Issuer are bank leasing
companies.
Despite Issuer's brand awareness and market share, it is possible that a competitor, which wil be able
to reduce Issuer's market share by means of an aggressive and extensive marketing campaign and more
favorable conditions, as a result of which Issuer's profitability wil decrease, wil appear among existing
non-bank credit companies which offer vehicle leasing services to a similar target audience.
The Issuer's management has extensive experience in managing entrepreneurial activity, which is useful
in adjusting to market changes and managing the company in changing conditions of external
environment.
9



AS "mogo" Terms of the Notes Issue
2.6.
Financial risk
Issuer's growth and size of loan portfolio significantly depends on the ability to attract capital from
different sources of financing. As of 30 September 2017, 76% of Issuer's borrowings were financing
through issued bonds and 23% were loans from peer-to-peer (P2P) investors. Previously, Issuer has
obtained credit line from the commercial bank in Latvia.
Despite the Issuer's track record on the capital markets and various forms of financing available, there is
a possibility that these sources of financing may not be available in the amount required for the Issuer,
or their conditions may be too unfavorable, which may significantly affect Issuer's ability to ensure
sufficient financing for the company's growth.
The Nominal amount of Notes will be repaid every quarter from 30 June 2019 to 31 March 2021 by
applying the amortization method once a quarter (Nominal amount payments are equal in all the
quarters). Coupon payments are made once a month, hence the Issuer has the minimum risk of Note
refinancing at the end of the term.
Noteholders must take into account that the Issuer has the right to the early redemption of Notes in
accordance with Section 4.2.9. "Early redemption", wherewith Noteholders are subject to early
redemption risk which is compensated by the payment of additional 1% of the Nominal amount to be
repaid.
Noteholders should take into account, that the Issuer has issued unsecured notes (ISIN LV0000801363)
in amount of EUR 20,000,000, with 10% annual coupon rate. Current Notes issue would increase the
leverage of the Issuer and increase Note refinancing risk at the end of the term.
2.7.
Dependence on service providers risk
There is a risk that the access to services the Issuer uses to assess client's solvency (credit record data
bases offered by SIA "Lindorff Oy Latvijas filile", SIA "Paus Konsults", etc.), to assess vehicles, and to
determine the conformity of vehicles (Road Traffic Safety Directorate (CSDD) database, announcement
platforms), and to provide marketing services (advertisement on Google homepage and in Google
partner networks), may be restricted or prohibited, or the costs services may be significantly increased,
which may affect Issuer's activity for an indefinite period of time.
2.8.
Dependence on managing employees risk
In future, Issuer's duties wil be affected by its ability to attract, preserve, and motivate highly qualified
and experienced personnel. There is competition for personnel with the relevant skills and experience in
Latvia, and it is comparatively high; however, the Issuer has successful experience in the field of
personnel management, offering education, professional growth, and development possibilities, as well
as different motivation programs to the employees.
2.9.
Operational risk
Operational risk is a possibility of experiencing losses due to insufficient or unsuccessful inner processes,
personnel management, systems, or external circumstances. Thorough personnel selection is carried
out, accurate descriptions of job duties are compiled, division of duties is coordinated, constant
investments are made within the IT system, which allows the Issuer to reduce operational risks.
2.10.
Credit risk of clients
Noteholders must take into account that the main activity of the Issuer is related to the issue of leases
and the main asset of the Issuer is its leasing portfolio, as well as vehicles registered as collateral in favour
of the Issuer. Leases are issued below the market value of a vehicle, but its sales value may not reach the
amount of the issued lease in case potential risks set in.
To reduce the credit risk of the Issuer's client, the Issuer regularly makes impairment allowances.
2.11.
Risks related to Notes
2.11.1. Notes repayment risk
Notes are equivalent to other unsecured loans of the Issuer. In case of Issuer's insolvency, Noteholders
have the same right to receive their investment as other creditors of the relevant group in accordance
with applicable regulatory enactments. There are no contracts or other transaction documents, which
10