The Potential Offer may include a reinvestment offer for certain eligible holders of Challenger Capital Notes 2 (ASX:CGFPB) issued in April 2017 (Challenger Capital Notes 2 Holders). Launch of the Potential Offer remains subject to market conditions and relevant approvals.

If the Potential Offer proceeds, Challenger expects to appoint the following Joint Lead Managers:

• UBS AG, Australia Branch;
• ANZ Securities Limited;
• Morgans Financial Limited;
• National Australia Bank Limited; and
• Westpac Institutional Bank (a division of Westpac Banking Corporation).

Challenger also expects to appoint LGT Crestone Wealth Management Limited as Co-Manager (together with the Joint Lead Managers, the Syndicate Brokers).

Important changes due to the introduction of the Design and Distribution Obligations (DDO) regime

The introduction of the DDO regime has changed the requirements relating to the distribution of certain financial products (including capital notes of Challenger) to certain investors.

In response to the introduction of the DDO regime, Challenger has made the decision that the Potential Offer (including any reinvestment offer) will be limited to (i) wholesale investors and (ii) retail investors who have received personal advice from a qualified financial adviser. As a result, the Potential Offer will not include a securityholder offer and there will be no ability to apply directly to Challenger under the Potential Offer.

Investors wishing to participate in the Potential Offer, including existing Challenger securityholders through any reinvestment offer, will need to do so through a Syndicate Broker. There may be varying costs, administrative effort and time considerations associated with engaging a financial adviser to provide personal advice and not all financial advisers will have access to the Potential Offer.

ASIC has published guidance on choosing a financial adviser on its MoneySmart website at www.moneysmart.gov.au/financial-advice/choosing-a-financial-adviser.

The Potential Offer will be made under a prospectus and any person wishing to apply through a Syndicate Broker will need to complete an application form accompanying that prospectus.

Further information for Challenger Capital Notes 2 Holders

For more information, including regarding the potential reinvestment offer, refer to the attached letter that will be sent to existing Challenger Capital Notes 2 Holders.