“Helping Aboriginal Communities Build Their Own Futures on Their Own Terms” Accessing Capital Markets for First Nations’

1. FIRST NATIONS FINANCE AUTHORITY “Helping Aboriginal Communities Build Their Own Futures on Their Own Terms” Accessing Capital Markets for First Nations’ Project Financing Needs FNFA PRESENTATION March, 2013

2. Created under “The Fiscaland Statistical Management Act” The FNFA: What is it? • 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 lends @ 2.50% 2. Fixed Rate Loans: Can have repayment terms of 30 years Longer Loan Terms Match Project Life

4. 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. fnfa fixed rate loans

5. Example: a $1,000,000 loan from the FNFA repaid over 30 years: • Annual Payments = $66,330.10 • Monthly Payments = $5,527.51 Example: a $10,000,000 loan from the FNFA repaid over 30 years: • Annual Payments = $663,301.00 • Monthly Payments = $55,275.10 NOTE: The above payments represent “fixed-rate” loans (i.e. the interest rate will not change for all 30 years). cost of a $1 Million FNFA loan

6. The following loans have been made: • Membertou = $12,000,000 @ 2.50% (Note 1) • Tzeachten = $5,800,000 @ 2.50% (Note 1) • Osoyoos = $10,200,000 @ 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 2012 FNFA loans outstanding

7. The FNFA: Who are members? 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. 28th, 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. What are the capital markets? Pension Plans, Life Insurance Co.’s, Mutual Funds, Large Corporations, etc… (i.e. those organizations with cash to lend)

11. Why work under the fsma? FNFA • No Collateral • Low Rates • Access when needed • Increasing access as revenues rise FMB Certificate 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

13. THE FNFA and BANKS COMPLEMENT EACH OTHER FIRST NATION FIRST NATION Each First Nation can choose what works for them! Bank’s can lend to people and to for-profit businesses. Also for infrastructure, etc. FNFA’S purpose is to provide loans for: economic and social development purposes. FNFA cannot lend to people or private businesses. PROPERTY TAX OTHER REVENUES REVENUES FNFA LOANS BANKS LAND FOR PROFIT BUSINESSES COMMUNITY BUILDINGS WATER/SEWER ROADS

14. 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. Eligible revenue streams to support a fnfa loan

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.”

16. 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/EcDev project to start simultaneously capital/ec. dev. planning

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 = 12.21 • Municipal Transfers = 11.61 • Independent Power Projects (IPP’s) = 12.06 • 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 12.21 how much can a First Nation borrow from the fnfa? NOTE: 30 years is an example; FNFA can lend up to 30 years

18. Use FNFA’s website: www.fnfa.ca • Once in the website choose “Calculators” tab at the top of the page • Once “Calculators” has been chosen use: • “Other Rev Calculator” To calculate your community’s borrowing power

19. CONTACT INFORMATION First Nations Finance Authority PH: 250-768-5253 Steve Berna, COO Visit our website: www.fnfa.ca