THIS NOTICE IS
IMPORTANT AND REQUIRES THE IMMEDIATE ATTENTION OF
SENIOR
NOTEHOLDERS. IF SENIOR NOTEHOLDERS ARE IN ANY DOUBT AS TO THE
ACTION
THEY SHOULD TAKE,
THEY SHOULD SEEK THEIR OWN FINANCIAL AND LEGAL ADVICE,
INCLUDING AS TO
ANY TAX CONSEQUENCES, IMMEDIATELY FROM THEIR STOCKBROKER,
SOLICITOR,
ACCOUNTANT OR OTHER INDEPENDENT FINANCIAL OR LEGAL ADVISER.
Notice of separate
meetings of the holders
(the "SENIOR
Noteholders") of the outstanding
Series 1 Class A1
Asset Backed 8.369 Per Cent. Premium Yield Notes due 2058
(ISIN: USG34346AA77; Common Code: 7518471)
(the "Series 1
Class A1 Notes")
Series 1 Class A2
Asset Backed 8.569 Per Cent. Premium Yield Notes due 2058
(ISIN: USG34346AB50; Common Code: 7518498)
(the "Series 1
Class A2 Notes")
Series 2
Class A Asset Backed Variable Rate Notes due 2058
(ISIN USG34346AE99; Common Code 7518536)
(the "Series 2
Class A Notes")
issued by
FINANCE FOR RESIDENTIAL SOCIAL HOUSING PLC
(the "Issuer")
On 26 March 1997
The Series 1 Class A1 Notes, Series 1 Class A2 Notes and Series
2 Class A Notes are each a "Class" of Notes and together
referred to as the "Senior Notes".
Capitalised terms used but not otherwise defined in this Notice
shall have the meanings set out in the trust deed (the "Trust
Deed") dated 26 March 1997 (as
amended from time to time) and entered into between the Issuer and
Royal Exchange Trust Company Limited as trustee (such role now
being performed by Capita Trust Company Limited under power of
attorney) (the "Trustee") and the bank agreement (the
"Bank Agreement") dated 26 March
1997 (as amended from time to time) and entered into between
the Issuer, The Royal Bank of Scotland plc ("RBS") (formerly National
Westminster Bank plc) (the "Account Bank" and the
"Administrator") and the Trustee.
The Trustee has not been involved in
the formulation of the matters set out in this Notice, including,
without limitation, the matters set out in section 1 (Background to
the Extraordinary Resolution) (the "Proposal") and, in
accordance with normal practice, the Trustee expresses no opinion
on the merits of the Proposal (which it was not involved in
negotiating) or the Extraordinary Resolution and no opinion
on whether Senior Noteholders would be acting in their best
interests voting for or against the Proposal or the Extraordinary
Resolution but on the basis of the information contained in this
Notice has authorised it to be stated that it has no objection to
the Extraordinary Resolution being submitted to Senior Noteholders
for their consideration. The Trustee makes no representation that
all relevant information has been disclosed to Senior Noteholders
in connection with the Proposal, the Extraordinary Resolution and
this Notice. The Trustee is not responsible for the accuracy,
completeness, validity or correctness of the statements made in
this Notice or omissions from this Notice. Nothing in this Notice
should be construed as a recommendation to Senior Noteholders from
the Trustee to vote in favour of, or against, the Proposal or the
Extraordinary Resolution. The Trustee recommends that Senior
Noteholders take their own independent professional advice on the
merits and the consequences of voting in favour of, or against, the
Extraordinary Resolution and the Proposal.
No person has been authorised to make any recommendation on
behalf of the Issuer, the Trustee or the Principal Paying Agent as
to whether or how the Senior Noteholders should vote pursuant to
the Proposal. No person has been authorised to give any
information, or to make any representation in connection therewith,
other than those contained herein. If made or given, such
recommendation or any such information or representation must not
be relied upon as having been authorised by the Issuer, the Trustee
or the Principal Paying Agent.
This Notice is issued and directed only to the Senior
Noteholders and no other person shall, or is entitled to, rely or
act on, or be able to rely or act on, its contents.
Each person receiving this Notice must
make its own analysis and investigation regarding the Proposal and
make its own voting decision, with particular reference to its own
investment objectives and experience, and any other factors which
may be relevant to it in connection with such voting decision. If
such person is in any doubt about any aspect of the Proposal and/or
the action it should take, it should consult its professional
advisers.
Senior Noteholders should refer to
section 3 (Voting and Quorum) of this Notice for details concerning
methods of voting in respect of the Extraordinary Resolution and
Proposal described in this Notice and quorum provisions in respect
of the Senior Noteholders' Meetings.
NOTICE IS HEREBY GIVEN to the holders of the Senior Notes
(the "Senior Noteholders") that pursuant to Condition 14 of
the Terms and Conditions of the Series 1 Notes and Condition 13 of
the Terms and Conditions of the Series 2 Notes and the provisions
of the Ninth Schedule of the Trust Deed separate meetings of the
Senior Noteholders of each Class (each a "Senior Noteholders’
Meeting") convened by the Issuer will be held at the offices of
Fieldfisher LLP on 6 May 2016
at 10am (London time) (in respect of the Series 1 Class
A1 Notes), at 10.30am (in respect of
the Series 1 Class A2 Notes) and at 11am (in respect of the Series 2 Class A Notes)
for the purpose of considering and, if thought fit, passing the
resolution which will be proposed as an Extraordinary Resolution at
each Senior Noteholders' Meeting in accordance with the provisions
of the Ninth Schedule of the Trust Deed.
-
Background to the Extraordinary
Resolution
Pursuant to the terms of the Bank Agreement, the Account Bank
shall be an entity which has its short term unsecured,
unsubordinated and unguaranteed debt rated at least A-1 by S&P
and its long term unsecured, unsubordinated and unguaranteed debt
rated at least A3 by Moody's or such other rating which is
consistent with the relevant published criteria of the relevant
rating agency from time to time (the "Account Bank Required
Rating").
Following the downgrade by S&P of the short-term credit
rating from A-1 to A-2 (the "RBS Downgrade") of The Royal
Bank of Scotland plc
("RBS"), RBS ceased to meet the rating requirements required
to fulfil certain of its roles under the Trust Deed, the
Administration Agreement and the Bank Agreement.
Pursuant to the Bank Agreement, in the event that the Account
Bank no longer has the Account Bank Required Rating, the Account
Bank shall either:
-
deposit the Balance of the Collection Account in an account in
the name of the Issuer with an institution that has the Account
Bank Required Rating within 30 days of such downgrade, provided
that such entity shall agree to enter an agreement and mandate on
terms substantially similar to the terms of the Bank Agreement;
or
-
the Bank will be required to ensure that its obligations are
guaranteed by an institution that has the Account Bank Required
Rating within 30 days.
RBS has provided the Issuer and the Trustee with draft
documentation (the "Documents") prepared by RBS's legal
counsel for the purpose of implementing a proposal (the "RBS
Proposal") to mitigate potential credit rating linkage
determined by the Rating Agencies between RBS's current credit
rating and its role as the Account Bank through its provision of
collateral to support its obligations under the Bank Agreement.
The Documents are as follows:
-
an amendment deed to the Bank Agreement and Cash Management
Agreement (the "Amendment Deed") between the Issuer, the
Trustee and RBS (as Account Bank, Administrator and Cash Manager)
which amends certain provisions of the Cash Management Agreement
and the Bank Agreement to enable RBS to provide additional support
for the rating of the Notes in its role as the Account Bank in
accordance with the RBS Proposal;
-
a collateral agreement (the "Collateral Agreement")
between the Issuer, the Trustee and RBS (as Account Bank and Cash
Manager) pursuant to which RBS as Account Bank may, in certain
circumstances, post cash and/or securities to support its
obligations to the Issuer; and
-
a custody agreement (the "Custody Agreement") between the
Issuer, the Trustee, RBS and Bank of New York Mellon appointing
Bank of New York Mellon as the custodian (the "Custodian")
of any securities deposited by RBS for safekeeping and to hold any
cash received for deposit for the account of the Issuer.
RBS shall pay to the Custodian such fees and charges as agreed
between RBS and the Custodian in respect of the services of the
Custodian pursuant to the Custody Agreement and reimburse the
Custodian for out-of-pocket expenses that are a normal incident of
the services provided under the Custody Agreement. RBS shall
also indemnify and hold harmless the Custodian and BNY Mellon
affiliates from all losses incurred by such parties other than as a
result of their own negligence, wilful misconduct or fraud pursuant
to the Custody Agreement.
The Custodian shall be subject to non-petition provisions in the
Custody Agreement.
RBS shall, upon demand, pay to the Issuer the amount of any and
all (a) reasonable costs (including reasonable legal costs and
expenses) which the Issuer may incur in connection with the
administration of the Collateral Agreement and (b) costs (including
legal costs and expenses) which the Issuer may incur in connection
with the exercise or enforcement of any of its rights under the
Collateral Agreement.
Pursuant to the terms of the Custody Agreement, in certain
circumstances, the Custodian may credit the Issuer's cash account
with cash equal to the amount of any payment which the Custodian
anticipates will be received by the Custodian or depository prior
to actual receipt by the Custodian of final payment of such
amount. Such advance credit shall be regarded by the
Custodian as an extension of credit to the Issuer. As the
Issuer is prohibited from incurring indebtedness under the terms of
the Trust Deed without the prior written consent of the Trustee,
the Issuer requests that the Senior Noteholders direct the Trustee
to consent to the Issuer incurring such potential indebtedness if
it enters into the Custody Agreement. It is not the intention of
the Issuer to become voluntarily indebted pursuant to the terms of
the Custody Agreement.
RBS has discussed the RBS Proposal with Moody’s Investors
Service ("Moody’s") and Standard and Poor’s Rating Services
("S&P" and, together with Moody's, the "Rating
Agencies"). The Rating Agencies have confirmed that they have
no further comments on the RBS Proposal. It is RBS’s expectation,
based on RBS’s understanding of the relevant criteria published by
the Rating Agencies, that:
-
the RBS Proposal is in accordance with S&P’s counterparty
criteria and as a result the ratings of the Notes will no longer be
constrained at the long-term issuer credit rating of RBS (BBB+),
and
-
the RBS Proposal will have no impact on the Moody’s ratings of
the Notes.
The Issuer wishes to seek a direction from the Senior
Noteholders pursuant to an Extraordinary Resolution the form of
which is set out in paragraph 2 below (the "Extraordinary
Resolution") passed at separate meetings directing it and the
Trustee to implement the RBS Proposal and enter into the
Documents.
-
Form of Extraordinary Resolution
"THAT this Senior Noteholders' Meeting of the holders of
the Series 1 Class A1 Notes/Series 1 Class A2 Notes/ Series 2 Class
A Notes presently outstanding of Finance for Residential Social
Housing plc (the "Senior Notes" and the "Issuer",
respectively) constituted by a trust deed dated 26 March 1997 (as amended from time to time) (the
"Trust Deed") each made between the Issuer and Royal
Exchange Trust Company Limited as trustee (such role now being
performed by Capita Trust Company Limited under power of attorney)
(the "Trustee") as trustee for the holders of the Senior
Notes (the "Senior Noteholders") hereby by Extraordinary
Resolution resolves:
-
to approve the terms of each of the Documents;
-
that the Trustee is hereby authorised, directed, requested,
ratified, sanctioned, instructed and empowered to consent to the
Issuer incurring indebtedness with the Custodian in certain
circumstances in accordance with the terms of the Custody
Agreement;
-
that the Trustee is hereby authorised, directed, requested,
ratified, sanctioned, instructed and empowered to concur to the
Documents and, in order to give effect thereto and to implement the
same, forthwith to execute the Documents and to concur in, execute
and do all such other deeds, instruments, acts and things as may be
necessary or appropriate to carry out and give effect to this
Extraordinary Resolution;
-
to waive, and hereby authorises, directs, requests, ratifies,
sanctions, instructs and empowers the Trustee to waive any breach
or potential breach of any provision of any Transaction Document
that has occurred or may occur as a result of the RBS
Downgrade;
-
to hold harmless, discharge and exonerate the Trustee from all
liability for which it may have become or may become liable under
the Trust Deed, the Notes, the Bank Agreement or any other
Transaction Document or otherwise in respect of any act or omission
for which the Trustee may become responsible in connection with the
Documents, or by reason of the implementation of, or the Trustee
acting in accordance with, this Extraordinary Resolutionor making
any determination or exercising (or, as the case may be, not
exercising) any other power or right conferred pursuant to, or
arising out of this Extraordinary Resolution;
-
that the Trustee is hereby authorised, directed, empowered,
requested, ratified, sanctioned and instructed without the need for
any further consent or approval to take (or refrain from taking, as
the case may be) all such actions and things as may be required,
necessary or desirable to implement and to give effect to this
Extraordinary Resolution, including without limitation the
execution of any documents, declarations, certificates, agreements,
deeds or instruments (howsoever described) to give effect to this
Extraordinary Resolution; and
-
to sanction every abrogation, modification, compromise or
arrangement in respect of the rights of the Noteholders against the
Trustee involved in or resulting from this Extraordinary
Resolution.
Capitalised terms in this Extraordinary Resolution shall, except
where the context otherwise requires or save where otherwise
defined herein, bear the meanings given in or incorporated in the
notice convening this Senior Noteholders' Meeting dated
14 April 2016."
3.
Voting and Quorum
The provisions governing the convening and holding of the Senior
Noteholders’ Meetings are set out in the ninth Schedule to the
Trust Deed.
For the purposes of each Senior Noteholders' Meeting, a
"Senior Noteholder" shall mean, in the case of the Senior
Notes held though Clearstream Banking, societe anonyme
("Clearstream, Luxembourg")
and/or Euroclear Bank S.A./N.V. ("Euroclear"), each person
who is for the time being shown in the records of Clearstream,
Luxembourg and/or Euroclear as the
holder of a particular principal amount of the Senior Notes and, in
the case of the Senior Notes held though the Depository Trust
Company ("DTC"), each person who is shown in the records of
DTC as the holder of a particular principal amount of the Senior
Notes on 14 April 2016 (the
"Record Date"). Transferees of the Senior Notes after the
Record Date will not be entitled to vote on the Extraordinary
Resolution.
Quorum
Each person who is the owner of a particular nominal amount
of the Senior Notes, as shown in the records of Clearstream,
Luxembourg and/or Euroclear as the
holder of a particular principal amount of the Senior Notes and in
the case of the Senior Notes held though the DTC, each person who
is on the Record Date shown in the records of DTC as the holder of
a particular principal amount of the Senior Notes or their
respective accountholders ("Accountholders"), (a "Beneficial
Owner") should note that they are not the registered holders of the
Senior Notes for the purposes of the Senior Noteholders' Meeting
and will only be entitled to attend and vote at the Senior
Noteholders' Meeting in accordance with the procedures set out
below in "Procedures for Voting". On this basis, the only
Senior Noteholder currently able to vote at the Senior Noteholders'
Meeting with respect to the Senior Notes represented by the Global
Note Certificate will be the registered holder of the Global Note
Certificate, which is Citibank, Brussels, as nominee for the common depositary
of Euroclear and Clearstream. However Citibank, Brussels may grant proxies to the Beneficial
Owners to attend and vote at the Senior Noteholders' Meeting.
Alternatively, Beneficial Owners who hold their interests through a
clearing system and who do not wish to attend and vote in person
may convey their voting instructions by contacting the relevant
clearing system (or through the relevant Accountholder, if
applicable) and arrange for votes to be cast on their behalf. See
"Procedures for Voting" below.
The quorum required at each Senior
Noteholders’ Meeting is at least two or more Voters representing or
holding not less than the Relevant Fraction. of the aggregate
Principal Amount Outstanding of the Senior Notes of the relevant
Class; provided however that for so long as the Relevant Fraction
of the Principal Amount outstanding of the relevant Class of Senior
Notes is represented by a Global Note, a single Proxy representing
the holder thereof shall be deemed to be two Voters for the
purposes of forming a quorum. The Relevant Fraction for this
Extraordinary Resolution is one half.
If a quorum is not present within 15
minutes from the time fixed for such Senior Noteholders’ Meeting,
such Senior Noteholders’ Meeting will be adjourned until such date,
not less than 14 nor more than 42 days later, and to such time and
place as the Chairman may decide. At least 10 days’ notice
(exclusive of the day on which the notice is given and of the day
on which the Senior Noteholders' Meeting is to be resumed) of a
Senior Noteholders’ Meeting adjourned through want of a quorum
shall be given in the same manner as for an original Senior
Noteholders’ Meeting and that notice shall state the quorum
required at the adjourned meeting. No notice need, however,
otherwise be given of a Senior Noteholders' Meeting which has been
adjourned for any other reason. The quorum required at any
such adjourned meeting will be at least two or more Voters whatever
the proportion of the Senior Notes which they represent provided
however that for so long as the Relevant Fraction of the Principal
Amount Outstanding of the relevant Class of Senior Notes is
represented by a Global Note, a single Proxy representing the
holder thereof shall be deemed to be two Voters for the purposes of
forming a quorum. If a quorum is not present within 15
minutes from the time fixed for a meeting so adjourned, the meeting
shall be dissolved.
Procedure for Voting
The holder of a Bearer Note may obtain a Voting Certificate from
the Principal Paying Agent or require the Principal Paying Agent to
issue a Block Voting Instruction by depositing such Note with the
Principal Paying Agent not later than 48 hours before the time
fixed for the relevant Senior Noteholders' Meeting. A Voting
Certificate, Block Voting Instruction or a Proxy authorised in such
Block Voting Instruction shall be valid until (in the case of a
Voting Certificate) the earliest of (i) the conclusion of the
relevant Senior Noteholders' Meeting; and (ii) the surrender of
such Voting Certificate to the Principal Paying Agent and (in the
case of a Block Voting Instruction and a Proxy authorised
thereunder) the earlier of (i) the conclusion of the relevant
Senior Noteholders' Meeting and (ii) the surrender to such
Paying Agent, not less than 48 hours before the time fixed for the
relevant Senior Noteholders' Meeting (or if the relevant
Senior Noteholders' Meeting has been adjourned, the time fixed for
its resumption), of the receipt for the deposited Senior Notes and
notification thereof by the Principal Paying Agent to the Issuer
and the Trustee of the deposited Senior Notes to which it relates.
So long as a Voting Certificate or Block Voting Instruction is
valid, the bearer thereof (in the case of a Voting Certificate) or
any Proxy named therein (in the case of a Block Voting Instruction)
shall be deemed to be the holder of the Senior Notes to which it
relates for all purposes in connection with the relevant Senior
Noteholders' Meeting. A Voting Certificate and a Block Voting
Instruction cannot be outstanding simultaneously in respect of the
same Note.
A holder of a Registered Definitive Note may by an instrument in
writing in the form for the time being available from the specified
office of the Registrar in the English language signed by the
holder (or, in the case of joint holders, the first named) or its
duly appointed attorney or, in the case of a corporation, executed
under its seal or signed on its behalf by its duly appointed
attorney or a duly authorised officer of the corporation and
delivered to the Registrar not later than 48 hours prior to the
time for which such meeting or adjourned meeting is convened,
appoint any person to attend and act on his or its behalf in
connection with any meeting or proposed Senior Noteholders'
meeting.
Any holder of a Registered Definitive Note which is a
corporation may by resolution of its directors or other governing
body and the delivery of an executed or certified copy of such
resolution (or, if such resolution is not in English, a certified
English translation thereof) to the Registrar not later than 48
hours prior to the time for which such meeting or adjourned meeting
is convened, authorise any person to act as its representative in
connection with the relevant Senior Noteholders' Meeting.
Only Voters, representatives of the Issuer and the Trustee, the
financial advisers of the Issuer and the Trustee and the legal
counsel to the Issuer, the Trustee and such advisers may attend and
speak at the relevant Senior Noteholders' Meeting.
Every question submitted to the relevant Senior Noteholders'
Meeting shall be decided in the first instance by a show of hands.
Unless a poll is validly demanded before or at the time that the
result is declared, the Chairman's declaration that on a show of
hands a resolution has been passed, passed (or not passed) by a
particular majority or rejected shall be conclusive, without proof
of the number of votes cast for, or against, the relevant
Extraordinary Resolution.
A demand for a poll shall be valid if it is made by the
Chairman, the Issuer, the Trustee or one or more Voters
representing or holding not less than one fiftieth of the aggregate
Principal Amount Outstanding of the Senior Notes of the relevant
class. The poll may be taken immediately or after such adjournment
as the Chairman directs. A valid demand for a poll shall not
prevent the continuation of the relevant Senior Noteholders'
Meeting for any other business.
On a show of hands every Voter has one vote. On a poll every
person who is present has one vote for each £100,000 of Registered
Definitive Notes of the relevant Class of which he is a holder or
in respect of which he is a proxy or representative or in respect
of each Unit of Bearer Notes of the relevant Class so produced or
represented by the voting certificate so produced or in respect of
which he is a proxy. The holder of a Global Note shall be treated
as having one vote for each £100,000 principal amount of Senior
Notes represented by such Global Note. Without prejudice to the
obligations of proxies, a person entitled to more than one vote
need not use them all or cast them all in the same way.
In case of equality of votes the chairman shall both on a show
of hands and on a poll have a casting vote in addition to any other
votes which he may have.
To be passed at the Senior Noteholders’ Meeting, the
Extraordinary Resolution requires a majority of at least 75 per
cent of the votes cast.
If passed at each Senior Noteholders' Meeting, the Extraordinary
Resolution will be binding on all the Senior Noteholders of the
relevant Class, whether or not present at the relevant Senior
Noteholders' Meeting and whether or not voting, and upon all
Couponholders.
Any Extraordinary Resolution passed by the Senior Noteholders at
a Senior Noteholders' Meeting shall also be binding on the
Mezzanine Noteholders and the Series 3 Noteholders.
Principal Paying
Agent
Citibank, N.A., London Branch
Citigroup Centre
Canada Square
Canary Wharf
London E14 5LB
Tel: +44 (0)20 7500 2017
Email: kris.chung@citi.com
Trustee
Capita Trust Company Limited
4th Floor
40 Dukes Place
London
EC3A 7NH
Fax: +44 (0)20 3170 0246
Email: corporatetrusts@capita.co.uk
Account Bank and
Administrator
The Royal Bank of Scotland
280 Bishopsgate
London
EC2M 4AA
Tel: +44 (0)20 7085 3781
Email: liability.management@rbs.com
Attention: Liability Management
Subject to the Extraordinary Resolution being passed by the
Senior Noteholders and all relevant documents being executed, the
Amendments set out above shall be become effective and the
Noteholders will be notified thereof in accordance with the
Conditions.
This notice is given by:
Issuer
Finance for Residential Social Housing
plc
4th Floor
40 Dukes Place
London
EC3A 7NH
Fax: +44 (0)20 3170 0246
Email: spvservices@capitafiduciary.co.uk
Dated 14 April 2016