MEDIA RELEASE
8th DECEMBER 2009
DIAMOND BACKED NOTES LAUNCHED TO COINCIDE WITH SURGE IN DEMAND FOR
DIAMONDS
Major Australian diamond internet retailer Diamond Exchange Limited is pleased to announce that it has set up a
separate special purpose vehicle, established solely to trade in diamonds and to take advantage of the exciting
polished diamond buying opportunities that currently exist. The vehicle - Diamond Backed Notes will allow the
opportunity for investors to purchase diamond backed notes. By purchasing high quality diamonds and selling
them to the Diamond Exchange at cost, plus a margin this will allow the Company to meet the interest payments
on the Notes and costs of operating the Company. Diamond Secured Notes will only allow sophisticated investors
to invest through an Information Memorandum. It is expected this Offer will close shortly due to demand.
The Diamond Exchange aims to take advantage of the current pricing dip for polished stones, caused by the
withdrawal of debt funding for diamond wholesalers by many US banks. The Diamond Backed Notes vehicle will
use purchased diamonds and cash as backing for the investment, which will pay to investors a coupon rate of 12
per cent per year, over a term of three years. Diamonds will make up a minimum of 80 per cent of the backing for
the notes with further note issues possible in the future. The stones would all be high quality diamonds
specifically made available for sale into the market by Diamond Exchange.
According to the Diamond Backed Notes Chairman, David Cornwell,
“It is anticipated that the diamond inventory of the Company will be turned over more than three times per
annum on aggregate to meet the current and growing demand for diamonds. The current economic climate has
created a unique window of opportunity for Diamond Exchange to procure diamonds at extraordinary value and
for investors in the Diamond Backed notes to earn a good fixed interest return. It’s a win-win for all.”
Current diamond prices are well below long-term averages, by as much as 50 per cent, creating a significant
procurement advantage for well positioned industry players, such as the Diamond Exchange, as it is expected that
diamond values will increase over the long term. There is also a positive outlook for growth in the medium term
in diamond prices.
For further information please contact Rod North, Bourse Communications, (03) 9510 8309 or 0408
670 706.
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