Changes begin for OISF investors
Under the new capital-raising model, Oikocredit will issue participations instead of shares. Investors will see their existing investments transferred to the new model in two phases.
1 March 2023
Investors have been able to invest indirectly in OIKOCREDIT, Ecumenical Development Cooperative Society U.A. (Oikocredit) through Stichting Oikocredit International Share Foundation (OISF). OISF is a member of Oikocredit. It holds member shares in Oikocredit and issues depository receipts for those shares to investors.
Under the new model, existing OISF investors will become direct investors in Oikocredit. Oikocredit has begun implementing this new model from 1 March 2023.
New investments will only be possible for investors based in Austria, Belgium, France, Germany, Italy (Südtirol), the Netherlands, Spain, Sweden and Switzerland.
First phase of changes effective 1 March 2023
Oikocredit is introducing this new model in two phases.
In the first phase, with effect from 1 March 2023, the member shares held by OISF are converted by Oikocredit to participations. Participations are non-voting equity instruments and are materially similar in financial terms to the member shares and depository receipts issued for shares (for more details, see the table below). As a result, in March, the underlying product of all depository receipts held by existing OISF investors is a participation instead of a member share.
In the second phase, from 1 April 2023, all depository receipts will be exchanged for participations and all existing OISF investors will have a direct investment in Oikocredit. From this date, OISF will end the administration of investments in Oikocredit. It will eventually be liquidated and dissolved at a later date.
Investors don’t have to take any actions to exchange their depository receipts. If investors disagree with the aforementioned changes, they can request a redemption of their investment.
New model expected to unify Oikocredit’s work and increase its impact
Participations will replace the shares issued by Oikocredit, the depository receipts issued by OISF for member shares it holds, and the other investment products that Oikocredit's support associations offer. This will allow Oikocredit to simplify its investment offer and enable it to use more resources in partnerships and projects that benefit low-income communities, and in promoting sustainable development together with its global network of investors, members and partners.
Investors can read more about the new model in the comparison table and Frequently Asked Questions section below. Key documents describing this change, including the amended terms and conditions for OISF depository receipts, as well as the participation terms are now available (see 'New capital-raising model documents').
Comparison of key features of the current depository receipts and the participations
|Depository receipts (current product)||Participations (new product)|
|Issuer||Stichting Oikocredit International Share Foundation (OISF), based in Amersfoort, the Netherlands.||Oikocredit Ecumenical Development Cooperative Society U.A. (Oikocredit), based in Amersfoort, the Netherlands.|
|Type of investment||Non-voting depository receipt issued by OISF for a share issued by Oikocredit.||Non-voting equity instrument issued by Oikocredit, called a participation.|
|Redemption price||Nominal value (€ 200 or the equivalent value in other currencies) or net asset value (NAV), whichever is lower. This means that the redemption price cannot exceed € 200 (or the equivalent value in other currencies), but can be lower.||Same as for depository receipts. It has been made explicit in the participation terms how the net asset value (NAV) in foreign currencies is calculated should the net asset value fall below the nominal value. Read more below.|
|Dividend||As decided by Oikocredit’s members at the annual general meeting. Past dividend levels have included 2%, 1% and 0.5% (see recent dividend figures in the 5-year overview table in our annual report). There have also been years in which no dividend has been paid.||Same as for depository receipts.|
Costs for investment
|Allowed in principle, but none are in place.||Allowed in principle, but none are in place.|
|Risks of continuing to hold depository receipts||
An investment in depository receipts carries financial risks typical for an investment in the equity of a company. An investment is fundamentally associated with considerable risks and can lead to the complete loss of the invested capital.
Oikocredit seeks to protect the capital of the investors through careful business decisions and diligent provisioning for expected losses, although a residual risk can never be completely ruled out. Since Oikocredit began in 1975, no investor has lost any of their capital. However, past performance is not a guarantee of future results.
|The risk profile is the same as for depository receipts. Please note that participations will only be available for sale to, or subscription by, (prospective) investors in Austria, Belgium, France, Germany, Italy (Südtirol), the Netherlands, Spain, Sweden and Switzerland. The new model will be introduced in different phases across these countries.|
You can submit a redemption order by filling in a redemption form at any time to request your money back. Redemption requests are processed on a monthly basis.
Investment redemptions are always at Oikocredit’s discretion.
|As is the case with depository receipts, you can submit a request for redemption. Redemptions are processed on a monthly basis and are always at the discretion of Oikocredit. In addition, Oikocredit can also decide to redeem in case an investor no longer meets the eligibility requirements or holds less than one participation.|
|Liability||Investors’ liability is limited to the amount they have invested. This means an investment is subject to full loss, but investors cannot be held liable for debts of the cooperative beyond the amount they have invested.||Same as for depository receipts.|
Frequently Asked Questions for OISF investors
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 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, non-voting equity instruments governed by Dutch law which are 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
We will implement the new capital-raising model in two phases (see question “What will change for me?”). The first phase came into effect from 1 March 2023, and the second change will come into effect as of 1 April 2023.
What will change for me?
- 1 March 2023: Participations replaced shares as the underlying product for depository receipts
- With effect from 1 March 2023, Oikocredit has converted the member shares held by OISF into participations. As a result, the underlying product for all existing investments through OISF depository receipts is Oikocredit participations instead of shares.
- It is recommended you familiarise yourself with the updated terms and conditions and adjusted articles of associations for OISF (see ‘New capital-raising model documents’).
- From 1 April 2023: Participations replace depository receipts as the investment product
- With effect from 1 April 2023, all depository receipts held by investors will be exchanged for participations, and investors previously invested in OISF via depository receipts will become direct investors in Oikocredit via participations.
- OISF will stop administration of all investments as of this date. It will eventually be liquidated and dissolved at a later date.
- Before this happens, it is recommended you familiarise yourself with the participation terms (see ‘New capital-raising model documents’).
If existing investors do not agree with the change from depository receipts to participations, they may request a redemption of their depository receipts.
- 1 March 2023: Participations replaced shares as the underlying product for depository receipts
Why can I not make any further investments in Oikocredit?More questions
In response to a changing global regulatory landscape, we are only able to take on additional investments from investors in the following countries: Austria, Belgium, France, Germany, Italy (Südtirol), the Netherlands, Spain, Sweden and Switzerland. You can continue to hold your existing investment, and it will continue to support Oikocredit’s mission. Unfortunately, it is no longer possible to make additional investments if you are not an investor in the eligible countries previously listed.
At which price will I be able to redeem 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/CAD 200/CHF 250/GBP 150/SEK 2000/USD 200, then redemption will be at the nominal value of EUR 200/CAD 200/CHF 250/GBP 150/SEK 2000/USD 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 is calculated is explained in more detail in an annex to the participation terms. These terms are now available (see list 'New capital-raising model documents').
Example of redemption price calculation
Scenario: NAV above nominal value Scenario: NAV below nominal value Investor Jones submitted a redemption request for EUR 750. This investor holds 21.3 participations. The net asset value of the euro participation was determined at EUR 212, and hence the redemption price was determined at EUR 200 per participation (the nominal value). Following Oikocredit’s positive decision on the issuance and redemption of participations, Oikocredit will pay EUR 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 EUR 750. This investor holds 21.3 participations. The net asset value of the euro participation was determined at EUR 176, and hence the redemption price was determined at EUR 176 per participation. Following Oikocredit’s positive decision on the issuance and redemption of shares, Oikocredit will pay EUR 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:
- 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.
- 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.
- 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.
- 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.
I have more questions. Who can I ask?More questions
You can contact the investor support team in the Netherlands via the email email@example.com.
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.
This page was last updated on 1 March 2023.