EFTA01433968.pdf

RIN II - 094 Alpha Group Capital LLC PRELIMINARY CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM RIN II Ltd. (a Cayman islands exempted company) Preferred Shares February 2018 RREEF America L.L.C. 345 Park Avenue, 26th Floor New York, NY 10154 Tel. Fax. Confidential 763316-4-6 February 2018 EFTA01433968 RIN II - 094 Alpha Group Capital LLC PRELIMINARY CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM RIN II Ltd. $[75,000,000] in Preferred Shares RIN II Ltd. (the "Issuer"), an exempted company incorporated with limited liability in the Cayman Islands, intends to issue preferred shares at a subscription price of $1.00 per share (the "Preferred Shares"). The Issuer also intends (i) to enter into a secured facility initially up to U.S.$168,425,000, which may be increased to an amount up to $463,168,750 subject to satisfaction of certain conditions described herein (the "Initial Facility") and (ii) ultimately to refinance the Initial Facility as described herein. In order to effect such refinancing, the Issuer is expected to co-issue with RIN II LLC, a Delaware limited liability company (the "Co-Issuer" and together with the Issuer, the "Co- Issuers"), certain securities (the "Refinancing Securities"), the proceeds of which will repay the Initial Facility (such note issuance, the "Refinancing"). Any Refinancing Securities, together with the Preferred Shares, are referred to herein as the "Securities", and each of the Initial Facility and the Refinancing are each referred to herein as a "Facility". The Preferred Shares are being offered hereby and constitute equity interests of the Issuer. Neither Facility is being offered pursuant to this memorandum. The Portfolio is expected to consist of primarily infrastructure finance loans and is expected to be managed by RREEF America L.L.C. ("RREEF"), in its capacity as portfolio advisor to the Issuer (the "Portfolio Advisor"). THIS PRELIMINARY PRIVATE PLACEMENT MEMORANDUM AND THE INFORMATION CONTAINED HEREIN ARE SUBJECT TO COMPLETION, AMENDMENT OR OTHER CHANGE WITHOUT NOTICE PRIOR TO THE SALE DATE. UNDER NO CIRCUMSTANCES WILL THIS PRELIMINARY PRIVATE PLACEMENT MEMORANDUM CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY. NOR WILL THERE BE ANY SALE OF THE REFINANCING SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY JURISDICTION. This confidential private placement memorandum (this "Memorandum") is being circulated to a limited number of sophisticated prospective investors (each investor in Preferred Shares, an "Investor") on a confidential basis for the purpose of evaluating an investment in the Preferred Shares. This Memorandum may not be reproduced or distributed, in whole or in part, nor may its contents be disclosed or used, for any other purpose without the prior written consent of the Issuer. Capitalized terms used in this Memorandum have the meanings given to them herein, in particular in Section 11, "Summary of Principal Terms" and the Appendix, "Glossary." EFTA01433969 Deutsche.AM Distributors, Inc. ("DDI") and Deutsche Bank Securities Inc. ("DBSI"), affiliates of the Portfolio Advisor, have been appointed by the Issuer as its non-exclusive Placement Agents in connection with the private offer and sale of Preferred Shares on behalf of the Issuer. RREEF is the brand name for the real estate division of the asset management affiliate of Deutsche Bank AG ("Deutsche Bank" and, together with its affiliates, the "Deutsche Bank Group"). In the United States this relates to the asset management activities of RREEF America L.L.C.; in Germany: RREEF Investment GmbH, RREEF Management GmbH and RREEF Special Invest GmbH; in Australia: Deutsche Asset Management (Australia) Limited (ABN 63 116 232 154), an Australian financial services license holder; in Hong Kong: Deutsche Asset Management (Hong Kong) Limited; in Japan: Deutsche Securities Inc.1; in Singapore: Deutsche Asset Management (Asia) Limited (Company Reg. No. 198701485N); in the United Kingdom: Deutsche Alternative Asset Management (Global) Limited, Deutsche Alternative Asset Management (UK) Limited and Deutsche Asset Management (UK) Limited; and in Denmark, Finland, Norway and Sweden: Deutsche 1 Financial advisory (not investment advisory) and distribution services only. Confidential February 2018 EFTA01433970 RIN II - 094 Alpha Group Capital LLC Alternative Asset Management (UK) Limited and Deutsche Alternative Asset Management (Global) Limited in addition to other regional entities in Deutsche Bank Group. Investments in the Preferred Shares are not deposits with or other liabilities of Deutsche Bank, or of any other entity in Deutsche Bank Group, and are subject to investment risk, including possible delays in repayment and loss of income and capital invested. None of Deutsche Bank, the Issuer, the Co-Issuer, the Portfolio Advisor, the Placement Agents or any other entity in the Deutsche Bank Group or any of their respective affiliates guarantees any particular rate of return on the Preferred Shares, nor do they guarantee the repayment of any investments made in the Preferred Shares. THE PREFERRED SHARES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT AND THE PREFERRED SHARES HAVE NOT BEEN AND ARE NOT EXPECTED TO BE REGISTERED UNDER THE SECURITIES LAWS OF ANY U.S. STATE OR ANY OTHER JURISDICTION. THE PREFERRED SHARES WILL BE OFFERED AND SOLD BY THE ISSUER IN THE UNITED STATES FOR INVESTMENT PURPOSES ONLY TO (I) "QUALIFIED INSTITUTIONAL BUYERS" WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT OR (II) "ACCREDITED INVESTORS" (AS DEFINED IN REGULATION D UNDER THE SECURITIES ACT) THAT ARE ALSO "QUALIFIED PURCHASERS" WITHIN THE MEANING OF SECTION 3(C)(7) OF THE INVESTMENT COMPANY ACT. THE PREFERRED SHARES WILL BE OFFERED AND SOLD BY THE ISSUER OUTSIDE OF THE UNITED STATES UNDER THE EXEMPTION PROVIDED BY REGULATION S UNDER THE SECURITIES ACT. IT IS NOT EXPECTED THAT THE PREFERRED SHARES WILL BE REGISTERED UNDER SECTION 12(G) OR ANY OTHER PROVISION OF THE EXCHANGE ACT AND THE RULES PROMULGATED THEREUNDER. NEITHER THE ISSUER NOR THE COISSUER WILL BE REGISTERED AS AN INVESTMENT COMPANY UNDER THE INVESTMENT COMPANY ACT. The Preferred Shares may not be sold, transferred, assigned, exchanged, made subject pledged, hypothecated, encumbered, made subject to a grant of participation in, to any derivatives contract, swap, structured note or any other arrangement, directly, indirectly or synthetically, or otherwise disposed of (collectively, "Transferred") except (i) pursuant to an exemption from registration under the Securities Act, exemption from registration under the Investment Company Act and registration or exemption under any other applicable securities laws and (ii) as otherwise permitted under the Issuer's Articles, the PS Issuing and Paying Agency Agreement and the PS Purchase Agreement. The Preferred Shares have not been recommended by any U.S. federal or state EFTA01433971 or non-U.S. securities commission or regulatory authority and none of the foregoing authorities has confirmed the accuracy or determined the adequacy of this Memorandum. Any representation to the contrary is unlawful. Prospective Investors should pay particular attention to the information in Section 12, "Certain Risk Factors" and Section 13, "Conflicts of Interest" of this Memorandum. Investment in the Preferred Shares is suitable only for sophisticated investors and requires the financial ability and willingness to accept the high risks and lack of liquidity inherent in an investment in the Preferred Shares. Investors in the Preferred Shares must be prepared to bear these risks for an extended period of time. No assurance can be given that the Issuer's investment objective will be achieved or that investors will receive a return of their capital. In making an investment decision, each investor must rely on its own examination of the Preferred Shares, and the terms of this offering, including the merits and risks involved. This Memorandum is not intended to, and must not be taken solely as the basis for, an investment decision with respect to a purchase of Preferred Shares. Prospective Investors should not construe the contents of this Memorandum as legal, tax, investment or accounting advice, and each prospective Investor is urged to consult with its own advisors with respect to legal, tax, regulatory, financial and accounting consequences of its investment in the Preferred Shares. By investing in the Preferred Shares, each prospective Investor will represent to the Issuer that such investor complies with the criteria and requirements described herein and specified in the Issuer's documents referred to herein. The Issuer Confidential ii February 2018 EFTA01433972 RIN II - 094 Alpha Group Capital LLC intends not to accept a subscription from any person or entity that does not represent that such standards are met. In the case of purchases of Preferred Shares by fiduciary accounts, the foregoing standards must be met either by the fiduciary account or by such person who directly or indirectly supplies the funds to the fiduciary account for the purchase of the Preferred Shares. The Preferred Shares are offered subject to the right of the Issuer or the Placement Agents to reject any subscription in whole or in part for any reason or no reason at all. The information in this Memorandum is subject change. to Investors in the Preferred Shares may not be able to liquidate their investment in the Preferred Shares in the event of an emergency or for any other reason because there is not now any market for Preferred Shares and it is not anticipated that one will develop. In addition, the Preferred Shares have not been and will not be registered under the Securities Act, and may not be Transferred except pursuant to an exemption from registration of the Preferred Shares under the Securities Act and an exemption from registration of the Issuer under the Investment Company Act. Various U.S. state laws and non-U.S. laws relating to the sale of securities may also require compliance before any transfer of Preferred Shares is affected. Transferability of the Preferred Shares is subject to certain further restrictions in the Articles, the PS Issuing and Paying Agency Agreement and the PS Purchase Agreement (see Section 11, "Summary of Principal Terms—Preferred Shares—Purchase Restrictions"). Each prospective Investor in the Preferred Shares must be prepared to hold its investment for the life of the Preferred Shares (see Section 12, "Certain Risk Factors"). No person has been authorized in connection herewith to give any information or make any representations other than as contained in this Memorandum and any representation or information not contained herein may not be relied upon as having been authorized by Issuer, the Co-Issuer, the Portfolio Advisor, Deutsche Bank Group, the Placement Agents or any of their respective directors, officers, employees, members, partners, shareholders or affiliates. Neither the delivery of this Memorandum nor any sale made under it will subsequent to the date on the front cover of this Memorandum, or, if earlier, the date when such information is referenced. Certain economic and market information contained in this Memorandum has been obtained from published sources and/or prepared by other parties and in certain cases has not been updated through the date of this Memorandum. All data in this Memorandum is as of the date set forth on the front cover of this Memorandum unless otherwise noted. While such sources EFTA01433973 are believed to be reliable, none of the Issuer, the Co-Issuer, the Portfolio Advisor, Deutsche Bank Group, the Placement Agents or any of their respective directors, officers, employees, partners, members, shareholders or affiliates assumes any responsibility for the accuracy or completeness of such information. In considering any prior performance information contained in this Memorandum, prospective Investors should bear in mind that past performance is not necessarily indicative of future results, and there can be no assurance that the investment team of the Portfolio Advisor or the Issuer will achieve comparable results or that targeted returns or asset allocations will be met. There can be no assurance that the Issuer will be able to achieve its investment objective. This Memorandum is to be used by the prospective Investor to which it is furnished solely in connection with its consideration of a potential investment the Preferred Shares described herein. The information contained herein should be treated in a confidential manner and may not be reproduced or used in whole or in part for any other purpose, nor may it be disclosed, without the prior written consent of the Issuer, the Portfolio Advisor or the Placement Agents. Each prospective Investor receiving a copy of this Memorandum, by accepting such delivery, will be deemed to have agreed not to disclose or use any of the information provided in this Memorandum except for the purpose of an evaluation by it of an investment in the Preferred Shares, will further agree not to distribute that information to any other person or entity, and will agree to return its copy of this Memorandum promptly upon request by the Issuer. Notwithstanding anything in this Memorandum to the contrary, to comply with U.S. Treasury Regulation Sections 1.6011 4(b)(3) and 301.6111-2(c), and any state or local law or regulation incorporating all or part of such sections, each recipient Confidential iii February 2018 imply that any information contained herein is correct as of any date EFTA01433974 RIN II - 094 Alpha Group Capital LLC (and each employee, representative or other agent of such recipient) of this Memorandum may disclose to any and all persons, without limitation of any kind, the U.S. federal income tax treatment, tax structure and tax strategies of the Issuer or any transactions undertaken by the Issuer, it being understood and agreed that, for this purpose, (i) the name of, or any other identifying information regarding (a) the Issuer or any existing or future investor (or any affiliate thereof) in the Preferred Shares, or (b) any investment or transaction entered into by the Issuer; (ii) any performance information relating to the Issuer, the Portfolio Advisor or their respective investments; and (iii) any performance or other information relating to previous investments managed by the Portfolio Advisor or any of its affiliates, do not constitute such tax treatment, tax structure or tax strategy information. Each prospective Investor is invited to meet with representatives of the Issuer and the Portfolio Advisor and to discuss with, ask questions of and receive answers from, such representatives concerning the terms and conditions of the offering of Preferred Shares and to obtain any additional information, to the extent that such representatives possess such information or can acquire it without unreasonable effort or expense, necessary to verify the information contained herein. This Memorandum summarizes certain provisions of the Securities, the Initial Facility, the PS Issuing and Paying Agency Agreement, the Portfolio Advisory Agreement and other Transaction Agreements. The summaries do not purport to be complete and are subject to, and are qualified in their entirety by reference to, the provisions of the actual documents (including definitions of terms). Copies of the above documents are available on request from the Placement Agents, the Issuer, the Portfolio Advisor or the PS Issuing and Paying Agent. The distribution of this Memorandum and the offer and sale of the Preferred Shares in certain jurisdictions may be restricted by law. This Memorandum does not constitute an offer to sell or the solicitation of an offer to buy in any state of the United States or other U.S. or non-U.S. jurisdiction to any person to whom it is unlawful to make such offer or solicitation in such state or jurisdiction. This offering does not constitute an offer of the Preferred Shares to the public, and no action has been or will be taken to permit a public offering in any jurisdiction where action would be required for that purpose. The Preferred Shares may not be offered or sold, directly or indirectly, and this Memorandum may not be distributed in any jurisdiction, except in accordance with the legal requirements applicable in such jurisdiction. Prospective Investors should inform themselves as to the legal requirements and tax consequences within the jurisdictions of their citizenship, residence, domicile and place of business with respect EFTA01433975 to the acquisition, holding or disposal of the Preferred Shares, and any foreign exchange restrictions that may be relevant thereto. No representation or warranty of any kind is intended or should be inferred with respect to the economic return or the tax consequences from an investment in the Preferred Shares. No assurance can be given that existing laws will not be changed or interpreted adversely. Other than where expressly stated herein with respect to the Issuer, no representation or warranty, express or implied, is or will be given by the Issuer, the Co- Issuer, the Portfolio Advisor, the Placement Agents, Deutsche Bank Group or their respective affiliates, advisers, directors, employees or agents and, without prejudice to any liability for, or remedy in respect of, fraudulent misrepresentation, no responsibility or liability or duty of care is or will be accepted by the Issuer, the Co-Issuer, respective affiliates, advisers, the Portfolio Advisor, directors, employees or agents as to the fairness, accuracy, completeness, currency, reliability or reasonableness of the information or opinions contained in this Memorandum or any other written or oral information made available to any prospective Investor or its advisers in connection with any proposed investment in the Preferred Shares or otherwise in connection with this Memorandum. In particular, but without prejudice to the generality of the foregoing, no representation or warranty is given as to the achievement or reasonableness of any future projections, forecasts, targeted or illustrative returns. The Issuer does not currently plan to, but may in the future, enter into swaps, commodity futures, options on futures, commodity options contracts and/or other instruments subject to the jurisdiction of the CFTC ("Regulated CFTC Confidential iv February 2018 the Placement Agents, Deutsche Bank Group or their EFTA01433976 RIN II - 094 Alpha Group Capital LLC Instruments"). If the Issuer does trade such instruments, it will only do so in a manner that either (a) does not cause the Issuer to be a "commodity pool" under the CEA and the regulations promulgated thereunder (the "CFTC Regulations") or (b) permits the Portfolio Advisor intends to qualify for exemptions from registration requirements under the CFTC Regulations applicable to a commodity pool operator ("CPO") and a commodity trading advisor ("CTA"), as applicable, and will file a notice of exemption with the National Futures Association in accordance with the CFTC Regulation 4.13(a)(3) and rely on exemptive relief pursuant to 4.14(a)(5), respectively (the "CFTC Exemptions"). If necessary, the Portfolio Advisor intends to qualify for the CFTC Exemptions with respect to the Issuer on the basis that (i) the Preferred Shares are exempt from registration under the Securities Act and are not offered and sold through a public offering in the United States; (ii)(a) at all times the aggregate initial margin and premiums required to establish positions in the Regulated CFTC Instruments, determined at the time the most recent position was established, will not exceed 5% of the liquidation value of the Issuer or (b) the aggregate net notional value of the Issuer's positions in Regulated CFTC Instruments, determined at the time the most recent position was established, will not exceed 100% of the Issuer's liquidation value; (iii) purchasers of the Preferred Shares will be generally limited to "accredited investors" as that term is defined in Section 501 of Regulation D under the Securities Act, or trusts formed by an accredited investor for the benefit of a family member, "knowledgeable employees" as that term is defined in Regulation Section 3c-5(a)(4) under the Investment Company Act, or "qualified eligible persons" as that term is defined in CFTC Regulation Section 4.7(a)(2)(viii)(a); and (iv) the Issuer will not be marketed as, a vehicle for trading in the commodity futures or commodity options markets. Therefore, unlike a registered CPO, the Portfolio Advisor is not required to provide to the investors a disclosure document or certified annual reports prepared in accordance with the relevant CFTC Regulations. In addition, the Portfolio Advisor is not required to comply with the disclosure, reporting and recordkeeping requirements applicable to a registered CPO and CTA. Subject to any amendments to the CEA or the CFTC Regulations, including the CFTC Exemptions, the Portfolio Advisor will seek to either comply with the CEA and the CFTC Regulations without relying on any exemption or rely on other exemption(s) (as amended) to the CEA and/or the CFTC Regulations (which may prevent the Issuer from trading in Regulated CFTC Instruments in order to satisfy the condition(s) for the relevant exemption). EFTA01433977 This Memorandum has not been reviewed or approved by the CFTC. EU RETENTION REQUIREMENTS The Retention Holder will represent and undertake to the Issuer, the Security Party, the Portfolio Administrator and the Placement Agents to hold the Retention Interests on the terms set out in the EU Risk Retention Letters entered into in connection with the Refinancing. Each prospective investor is required to independently assess and determine whether the information provided herein and in any reports provided to investors in relation to this transaction are sufficient to comply with the EU Retention Requirements or any other regulatory requirement. None of the Issuer, the Portfolio Advisor, the Placement Agents, the Retention Holder, the Portfolio Administrator, the Security Party, their respective affiliates or any other Person makes any representation, warranty or guarantee that any such information is sufficient for such purposes or any other purpose and no such Person shall have any liability to any prospective investor or any other Person with respect to the insufficiency of such information or any failure of the transactions contemplated hereby to satisfy the EU Retention Requirements or any other applicable legal, regulatory or other requirements other than in the case of the Retention Holder pursuant to and in accordance with the EU Risk Retention Letter. Each prospective investor in the Preferred Shares which is subject to the EU Retention Requirements or any other regulatory requirement should consult with its own legal, accounting and other advisers and/or its national regulator to determine whether, and to what extent, such information is sufficient for such purposes and any other requirements of which it is uncertain. See Section 12, "Certain Risk Factors — Risks Relating to the Preferred Shares — European Risk Retention Rules" and Section 14, "Certain Legal, ERISA and Tax Matters — European Risk Retention" and "- Retention Requirements Under the EU Risk Retention Rules" below. Confidential February 2018 EFTA01433978 RIN II - 094 Alpha Group Capital LLC PRIIPS Regulation / Prohibition on Sales to EEA Retail Investors The Preferred Shares are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the European Economic Area ("EEA"). For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU (as amended, "MiFID II"); or (ii) a customer within the meaning of Directive 2002/92/EC (as amended, the "Insurance Mediation Directive" ), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II. Consequently no key information document required by Regulation (EU) No 1286/2014 (as amended, the "PRIIPs Regulation") for offering or selling the Refinancing Securities or otherwise making them available to retail investors in the EEA has been prepared and therefore offering or selling the Refinancing Securities or otherwise making them available to any retail investor in the EEA may be unlawful under the PRIIPS Regulation. MiFID II product governance / Professional investors and ECPs only target market Solely for the purposes of each manufacturer's product approval process, the target market assessment in respect of the Preferred Shares has led to the conclusion that: (i) the target market for the Preferred Shares is eligible counterparties and professional clients only, each as defined in MiFID II; and (ii) all channels for distribution of the Preferred Shares to eligible counterparties and professional clients are appropriate. Any person subsequently offering, selling or recommending the Preferred Shares (a "distributor") should take into consideration the manufacturers' target market assessment; however, a distributor subject to MiFID II is responsible for undertaking its own target market assessment in respect of the Preferred Shares (by either adopting or refining the manufacturers' target market assessment) and determining appropriate distribution channels. No invitation may be made to the public in the Cayman Islands to subscribe for the Preferred Shares. PROSPECTIVE INVESTORS SHOULD REVIEW THE NOTICES BELOW FOR CERTAIN INFORMATION RELATING TO OFFERS AND SALES OF PREFERRED SHARES IN THE ISSUER TO INVESTORS IN VARIOUS STATES OF THE UNITED STATES. NOTICE TO FLORIDA RESIDENTS The Preferred Shares are offered pursuant to a claim of exemption under section 517.061 of the Florida Securities and Investor Protection Act and have not been registered under said act in the state of Florida. All Florida residents who are not EFTA01433979 institutional investors described in section 517.061(7) of the Florida Securities and Investor Protection Act have the right to void their purchase of the Preferred Shares, without penalty, within three days after the first tender of consideration. NOTICE TO GEORGIA RESIDENTS The Preferred Shares have not been registered under the Georgia Uniform Securities Act of 2008, and may not be sold or Transferred except in a transaction which is exempt under such act or pursuant to an effective registration under such act. "Forward-Looking Statements" Certain statements in this Memorandum (including those relating to current and future market conditions and trends in respect thereof) that are not historical facts constitute "forward -looking statements" for purposes of U.S. securities laws. These include statements regarding future results or expectations with respect to the Portfolio, are based on current expectations, estimates, projections, opinions and/or beliefs and can be identified by the use of forward-looking terminology such as "may", "will", "should", "expect", "anticipate", "project", "estimate", "intend", "continue", "target", or "believe" or the negatives thereof or other variations thereon or comparable terminology. Such forward-looking statements are based on facts and conditions as they exist at the time such statements are made, various operating assumptions and predictions as Confidential vi February 2018 EFTA01433980 RIN II - 094 Alpha Group Capital LLC to future facts and conditions, which may be difficult to accurately make and involve the assessment of events beyond the control of the Issuer or the Portfolio Advisor. Caution must be exercised in relying on forward-looking statements. Due to various risks and uncertainties, including those set forth in Section 12, "Certain Risk Factors" and Section 13, "Conflicts of Interest", actual events or results or the actual performance of the Portfolio may differ materially from those reflected or contemplated in such forward-looking statements. made as of the date hereof, and none of the Issuer, The forward-looking statements contained in this Memorandum are the Co-Issuer, the Portfolio Advisor or the Placement Agents undertakes any obligation to update any forward-looking statement to reflect subsequent events, new information or circumstances arising after the date hereof. In this Memorandum, "$", "USD" and "dollars" refers to the lawful currency of the United States, and "United States", "U.S" and "US" refers to the United States of America. Confidential vii February 2018 EFTA01433981 RIN II - 094 Alpha Group Capital LLC Contents Section Page Executive Summary 2 Summary of Key Terms .. 7 Investment Highlights 9 Investment Opportunity 11 Investment Strategy 16 Investment Criteria 19 Investment Process 21 Infrastructure Debt Investment Characteristics 25 Deutsche Asset Management Infrastructure Platform 28 Transaction Structure Prior to Refinancing 38 Transaction Structure Following Potential Refinancing 38 Summary of Principal Terms 43 Certain Risk Factors 95 EFTA01433982 Conflicts of Interest 121 Certain Legal, ERISA and Tax Matters 128 Appendix: Glossary 148 Confidential viii February 2018 EFTA01433983 RIN II - 094 Alpha Group Capital LLC Section 1 Executive Summary Confidential 1 February 2018 EFTA01433984 RIN II - 094 Alpha Group Capital LLC Executive Summary RIN II Ltd. (the "Issuer" or "RIN II"), an exempted company incorporated with limited liability in the Cayman Islands, is a new investment fund managed by RREEF America L.L.C. (the "Portfolio Advisor"), an investment advisor subsidiary of Deutsche Asset Management ("DeAM"). The Issuer's objective will be to generate attractive risk adjusted returns by making investments in private infrastructure debt. RIN II will be a successor investment fund to RIN Ltd. ("RIN I"), which is currently managed by the Portfolio Advisor. RIN II intends to follow a strategy similar to that of RIN I. RIN I has invested approximately $450 million across 38 distinct Obligors, from inception in November 4, 2014 through November 30, 2017, and has and will continue to invest and reinvest in private infrastructure debt through its RIN II Reinvestment Period. In addition, the Portfolio Advisor has demonstrated the ability to source attractive loans in the primary market, with 77% of RIN I's portfolio (as of November 30, 2017) comprised of loans sourced in the primary market.2 The Issuer's investments will be funded by equity capital received from investors in the Preferred Shares being offered hereby and from debt financing, which is expected to occur in two phases, as described below. RIN II will seek to generate a Target Equity IRR of 12%-15%3 comprised predominantly of current yield for the Preferred Shares. For individual portfolio investments, the target rate of return will be commensurate with the assessed degree of risk. To provide a significant alignment of interest with investors in Preferred Shares and to comply with any applicable risk retention requirements then in effect, the Retention Holder intends to purchase, and retain, not less than 5% (or any other amount that is sufficient for the Issuer to comply with the requirements imposed pursuant to the US (to the extent applicable) and EU Risk Retention Rules) of the Preferred Shares, the loans comprising the Initial Facility and the Issuer's securities issued pursuant to the Refinancing during the life of such Refinancing Securities. Initially, on the date of issuance of the Preferred Shares, the Issuer will enter into the Initial Facility in a maximum aggregate outstanding principal amount up to $168,425,000, which may be increased up to an amount up to $463,168,750 subject to satisfaction of certain conditions described herein. During the term of the Initial Facility, the Preferred Share Purchasers will be required to fund their Capital Commitment in capital contributions. During an 18 month ramp-up period (the "Ramp-Up Period"), subject to the availability of financing under the Initial Facility, the Issuer intends to accumulate a portfolio of private infrastructure loans of at least $375 million which represents 75% of the portfolio's targeted aggregate principal amount of approximately $500 million (the "Target Principal Balance"). During EFTA01433985 the Ramp-Up Period, the portfolio will be funded by the proceeds of the Initial Facility and the Contributions. After the Preferred Share Issuance Date and during the term of the Initial Facility, the Issuer may issue Additional Preferred Shares in accordance with the terms of the PS Issuing and Paying Agency Agreement and the PS Purchase Agreement. Following the Ramp-Up Period, the Issuer intends to enter into a Refinancing of the Initial Facility by issuing tranched, floating rate (and possibly fixed-rate) Refinancing Securities and, subject to the satisfaction of the applicable conditions set forth in the Transaction Agreements, issue additional debt and/or increase the Aggregate Capital Commitment (as defined below). However, the occurrence of such Refinancing and the issuance of additional debt and/or increase in the Aggregate Capital Commitment will depend on market conditions, the satisfaction of requisite approvals and a number of other factors. 2 Past performance is not necessarily indicative of future results. 3 The target return of the Preferred Shares is net of the Issuer's Advisory Fees, expenses, performance fees, portfolio company taxes, taxes payable by the Issuer and related withholding taxes from portfolio investments. There can be no assurance that the assumptions underlying the target returns of the Preferred Shares will prove to be accurate. There can be no assurance that any favorable return of the Preferred Shares will be met or that significant losses on the Preferred Shares will be avoided. The projections contained herein are subject to a number of assumptions and uncertainties and may or may not be realized, including that a CLO refinancing is completed on favorable terms. Please refer to Section 12 "Certain Risk Factors" and Section 13 "Conflicts of Interest" for further important information relating to target returns of the Preferred Shares. Confidential 2 February 2018 EFTA01433986 RIN II - 094 Alpha Group Capital LLC DeAM's global infrastructure platform (the "Platform") has a 23-year track record of delivering strong, stable returns for investors. The Platform is the specialist infrastructure funds management business of DeAM, one of the world's leading investment management institutions with over $810 billion of assets under management 4 . The Platform employs 38 dedicated investment professionals5 and manages approximately $22.3 billion of assets, with offices in London, New York and Chicago. DeAM manages multiple credit-oriented funds across asset classes, securitization vehicles. Investment Strategy The Issuer's investment strategy will seek to achieve attractive risk- adjusted returns through investments in private infrastructure debt in the primary and secondary markets. The Portfolio Advisor believes that substantial opportunities in private infrastructure debt will persist over the intermediate- to long-term due to the following drivers: Expected increased demand: I. Long-term need for infrastructure investments requires substantial dedicated private debt capital; II. Financially strained public authorities are increasingly turning to the private sector for capital; and III. Private investors continue increasing their allocations to infrastructure to take advantage of stable long-term returns offered by sector investments with low business risk relative to investments in other private corporates. Expected constrained supply: I. Banks facing capital constraints from greater regulation and refocusing strategies accordingly; and II. Institutional investor capital vehicles are often too limited in scale and flexibility to efficiently aggregate sufficient private infrastructure debt capital. The strategy capitalizes on the growing demand for, and limited supply of, private debt to provide financing or refinancing ("Event-Driven" financings) to infrastructure businesses, a dynamic that is expected by the Issuer and the Portfolio Advisor to provide a meaningful scarcity premium in the form of attractive loan margins. The Portfolio Advisor will seek for the Issuer to capture the scarcity premium through primary market and selective secondary market loan investments. To execute the investment strategy, the Portfolio Advisor, on behalf of the Issuer, will seek to purchase primary market loan investments from multiple sources. The Portfolio Advisor will utilize its primary market relationship network and the Platform's infrastructure investment management experience to identify attractive seasoned loan opportunities as it seeks to EFTA01433987 build an investment portfolio for the Issuer (the "Portfolio") with a target Ba3/B1 credit profile on average. The Portfolio Advisor also intends to purchase seasoned loans in the secondary market on behalf of the Issuer. The Portfolio Advisor believes the selective investment strategy that it intends to utilize on behalf of the Issuer, combined with the seniority and security typically associated with the senior secured loan asset class, should allow RIN II to achieve a lower risk profile compared to an investment in senior unsecured, subordinated debt, or equity of comparable assets. Further compared to typical non-financial corporates, infrastructure financings tend to have a meaningful capital expenditure element. As an example, as of November 30, 2017, greater than 57% of RIN I's portfolio is comprised of borrowers that either (i) have issued debt where the use of proceeds has been used to fund capital expenditures or (ii) a meaningful percentage of internally generated cash flow is used to fund capital expenditures. including private funds and In both instances the Portfolio Advisor 4 As of June 30, 2017. 5 As of June 30, 2017. Confidential 3 February 2018 EFTA01433988 RIN II - 094 Alpha Group Capital LLC believes that this dynamic is credit accretive to lenders as funding capital expenditures, rather than distributing excess cash flow to Sponsors, enhances the borrower's asset base and a loan's equity cushion. Investment Criteria In executing the Issuer's investment strategy, the Portfolio Advisor will seek attractive risk-adjusted returns with an emphasis on capital preservation by monitoring and administrating the Portfolio of Collateral Obligations consistent with the Issuer's return objectives, the Investment Guidelines for the Initial Facility (see Schedule II), the Investment Criteria and other criteria and restrictions applicable to the Issuer and the Portfolio Advisor under the Transaction Agreements. The Portfolio Advisor intends to utilize the following approach when considering investments: I Invest in debt of operating infrastructure assets — Invest in the debt of privately owned or operated infrastructure assets that exhibit one or more of the following attributes: generate stable and predictable cash flow, demonstrate a solid operational track record, have strong competitive market positioning, have substantial asset coverage, and benefit from experienced management; II. Pursue disciplined investment approach — Employ a selection process based on intensive due diligence and fundamental credit analysis (including an assessment preservation; III. Evaluate risk-adjusted return — Evaluate investments based on relative value and utilize multiple methodologies, such as discounted cash flow analysis, expected returns for comparable cash and synthetic credit profiles, secondary market executed trades and asset coverage analysis; and IV. Construct diverse portfolio — Build an expected portfolio of at least 30 assets and seek diversification by sub-sector and tenor. No single investment will comprise more than 5% of the total Collateral Obligations, determined as set forth in Section 6, "Investment Criteria". Ramp-Up Period The Portfolio Advisor, on behalf of the Issuer, will seek to accumulate Collateral Obligations during the Ramp-Up Period in an amount up to the Target Principal Balance. Pursuant to the terms of the Initial Facility, the PS Issuing and Paying Agency Agreement and the PS Purchase Agreement, Contributions will be required to be made over time as described in Section 11, "Summary of Principal Terms—Capital Calls." Intended Refinancing Once the Issuer has accumulated Collateral Obligations in an aggregate amount equal to or approaching the Target Principal Balance, the Issuer intends to refinance the Initial Facility through a Refinancing effected by issuing tranched rated EFTA01433989 Refinancing Securities. The Issuer's goal is to issue at least $[425] million in principal amount of rated Refinancing Securities to repay the Initial Facility, pay transaction expenses, and provide additional funds for investment by the Issuer. The Issuer contemplates that it may seek to increase the Aggregate Capital Commitment at the time of a Refinancing, subject to the satisfaction of the conditions and requirements set forth in the Transaction Agreements and the receipt of requisite approvals. It is expected by the Issuer that Deutsche Bank or an affiliate thereof will seek to retain at least 5% of each of the Initial Facility and the Refinancing, and Deutsche Bank and/or an affiliate thereof will seek to retain its 5% stake in the Preferred Shares. No assurance can be made that the intended Refinancing will occur on such terms (or at all) (see Section 12, "Certain Risk Factors—Risks Relating to the Preferred Shares—Refinancing Risks"). Any principal repayments received during the term of the Refinancing are intended to be invested by the Issuer within the initial phase of up to a five-year reinvestment period commencing with the Refinancing (the "RIN II Reinvestment Period"). During the RIN II Reinvestment Period, it Confidential 4 February 2018 of underlying collateral value) to emphasize capital is expected that the Issuer will continue from time to time to purchase EFTA01433990 RIN II - 094 Alpha Group Capital LLC infrastructure loans. The foregoing investment strategy will be subject requirements, parameters and transaction structure of any Refinancing. to, and will be superseded by, the detailed Confidential 5 February 2018 EFTA01433991 RIN II - 094 Alpha Group Capital LLC Section 2 Summary of Key Terms Confidential 6 February 2018 EFTA01433992 RIN II - 094 Alpha Group Capital LLC Summary of Key Terms Set forth below are certain key terms of the Issuer, the Initial Facility and the Preferred Shares. The information below is qualified in its entirety by Section 11, "Summary of Principal Terms" and the applicable Transaction Agreements. Capitalized terms used but not otherwise defined herein have the meanings specified in Section 11, or in the Appendix, "Glossary". Issuer RIN II Ltd., an exempted company incorporated with limited liability in the Cayman Islands, as issuer of the Preferred Shares, as borrower under the Initial Facility, and as co-issuer of the Refinancing Co-Issuer Portfolio Advisor Initial Facility Lenders RIN II LLC, a Delaware limited liability company, as co-issuer of the Refinancing RREEF America L.L.C. Barclays Bank PLC ("Barclays") and Deutsche Bank AG, Cayman Branch ("Deutsche Bank"), as sole initial lenders under the Initial Facility Barclays is expected to hold 95% of the Initial Facility, and Deutsche Bank is expected to hold 5% of the Initial Facility Initial Facility Par Amount Preferred Share Aggregate Capital Commitment Ramp-Up Period Target Equity IRR Investment Objective Base Advisory Fee Subordinated Advisory Fee Incentive Fee Hurdle Incentive Advisory Fee $168,425,000, which may be increased to $463,168,750 as described in Section 11, "Summary of Principal Terms—Loans Under the Initial Facility." Up to $75.0 million Up to [18] months (subject to extension in accordance with the terms of the Initial Facility) Net target equity IRR of 12%-15%6 Achieve attractive risk-adjusted returns through investments in private USD loans to infrastructure businesses operating primarily in the United States Prior to Refinancing: [35] bps per annum of the Fee Basis Amount Following the Refinancing: [15] bps per annum of the Fee Basis Amount Prior to Refinancing: [0] bps per annum of the Fee Basis Amount. Following the Refinancing: [30] bps per annum of the Fee Basis Amount. EFTA01433993 11% Target Equity IRR 20% after exceeding the Incentive Fee Hurdle 6 Please refer to footnote 3. Confidential 7 February 2018 EFTA01433994 RIN II - 094 Alpha Group Capital LLC Section 3 Investment Highlights Confidential 8 February 2018 EFTA01433995 RIN II - 094 Alpha Group Capital LLC Investment Highlights The Preferred Shares of RIN II are intended to provide Investors with a number of benefits: Benefits of Private Infrastructure Debt I The Preferred Shares provide attractive access to private infrastructure loans that frequently offer the following: - Preferred position in capital structure with substantial equity cushion - Stable expected returns realized through a contractually pre-determined interest payment and principal repayment profile - Security interest in collateral of critical infrastructure - Historically low default and high recovery rates7 Favorable Risk Adjusted Returns and Relative Value I Potential for significant positive spread between investment margins and lower cost funding - Target asset credit yields of on average LIBOR + 3.25%-4.25% - Seek attractive value relative to broadly syndicated loan market Low Correlation IILow correlation relative to sector equity investments as debt investments tend to exhibit lower cash flow volatility than equity investments given their preferred position in the capital structure I Low correlation among individual infrastructure assets10 Experienced Portfolio Advisor and Leading Platform I The Platform has a 23-year track record of delivering strong, stable returns for investors I Portfolio Advisor team with complementary skill sets and collective infrastructure experience of approximately 78 years8 - Completed $37.0 billion of financing transactions across 96 infrastructure businesses9 - Ratio of seven investment professionals to 38 portfolio investments facilitates thorough private equity style due diligence and daily investment monitoring 7 Source: 'Infrastructure Default and Recovery Rates 1983-2016', Moody's, July 2017. 8 For further information regarding the Portfolio Advisor team, see Section 9, "Deutsche Asset Management Infrastructure Platform-Portfolio EFTA01433996 Advisor Team Member Biographies". 9 As of November 13, 2017. Based on Team members' professional activities, including experience at prior employers. Transaction numbers are based on the collective team's experience; this includes acting in varying capacities such as a lead arranger and or a financial counterparty. Confidential 9 February 2018 EFTA01433997 RIN II - 094 Alpha Group Capital LLC Section 4 Investment Opportunity Confidential 10 February 2018 EFTA01433998 RIN II - 094 Alpha Group Capital LLC Investment Opportunity The Portfolio Advi