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Eqty Rel4.a1 39 | LSE:68VY | London | Bond |
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TIDM68VY
RNS Number : 5581H
Equity Release Funding (No.4) PLC
04 August 2021
NOTICE OF RESULTS AND OF Adjourned MEETINGS
THIS NOTICE IS IMPORTANT AND REQUIRES THE IMMEDIATE ATTENTION OF NOTEHOLDERS. IF ANY NOTEHOLDER IS IN ANY DOUBT AS TO THE ACTION IT SHOULD TAKE OR IS UNSURE OF THE IMPACT OF THE IMPLEMENTATION OF ANY EXTRAORDINARY RESOLUTION TO BE PROPOSED AT A MEETING, IT SHOULD SEEK ITS OWN FINANCIAL AND LEGAL ADVICE, INCLUDING AS TO ANY TAX CONSEQUENCES, IMMEDIATELY FROM ITS STOCKBROKER, BANK MANAGER, SOLICITOR, ACCOUNTANT OR OTHER INDEPENT FINANCIAL OR LEGAL ADVISER.
EQUITY RELEASE FUNDING (NO.4) PLC
(incorporated in England and Wales with limited liability under registered number 4986587)
(the "Issuer")
NOTICE OF RESULTS AND OF ADJOURNMENT OF SEPARATE MEETINGS
of the holders of the outstanding Notes of the Issuer listed below
Current Rate Aggregate of Interest Description Principal (per cent. of Notes ISIN Common Code Amount Outstanding per annum) ------------------- ------------- ------------ -------------------- -------------- GBP215,000,000 XS0197423345 19742334 GBP215,000,000 Three month Class A2 Mortgage Sterling Backed Floating LIBOR + 0.70 Rate Notes due per cent. 2039 (the "Class Floating A2 Notes") Rate GBP61,000,000 XS0197423774 19742377 GBP61,000,000 Three month Class B Mortgage Sterling Backed Floating LIBOR + 1.50 Rate Notes due per cent. 2049 (the "Class Floating B Notes") Rate GBP16,500,000 XS0197424236 19742423 GBP16,500,000 Three month Class C Mortgage Sterling Backed Deferrable LIBOR + 3.30 Interest Floating per cent. Rate Notes due Floating 2049 (the "Class Rate C Notes") GBP1,000,000 XS0197424400 19742440 GBP1,000,000 Three month Class D Mortgage Sterling Backed Deferrable LIBOR + 3.90 Interest Floating per cent. Rate Notes due Floating 2049 (the "Class Rate D Notes")
(each a "Series" and together the "Notes")
NOTICE IS HEREBY GIVEN that separate meetings (each an "Original Meeting" and together the "Original Meetings") of the holders of each Series (the "Noteholders") were convened by the Issuer and held via teleconference on 4 August 2021.
At the Original Meeting of the holders of the Class A2 Notes the necessary quorum was achieved, 100% of Electronic Voting Instructions received were in favour of the Extraordinary Resolution and therefore the Extraordinary Resolution was passed and the Eligibility Condition was satisfied in respect of the Class A2 Notes.
At the Original Meeting of the holders of the Class D Notes the necessary quorum was achieved, 100% of Electronic Voting Instructions received were in favour of the Extraordinary Resolution and therefore the Extraordinary Resolution was passed and the Eligibility Condition was satisfied in respect of the Class D Notes.
At the Original Meeting of the holders of the Class B Notes and the Original Meeting of the holders of the Class C Notes 100% of Electronic Voting Instructions received were in favour of the Extraordinary Resolution, however the required quorum was not met. As such, the Chairman directed that the Original Meeting in respect of the Class B Notes and the Original Meeting in respect of the Class C Notes be adjourned and that the adjourned meetings be held via teleconference on 24 August 2021 for the purpose of considering and, if thought fit, passing the applicable resolutions set out below which will, in respect of the Class B Notes and the Class C Notes, be proposed as an Extraordinary Resolution in accordance with the provisions of the trust deed dated 30 July 2004, as modified, supplemented and/or restated from time to time, made between, inter alios, the Issuer and Citicorp Trustee Company Limited (the "Trustee") as trustee for the Noteholders, and constituting the Notes of each Series (the "Trust Deed"). Noteholders should note that, at the adjourned Meetings, two or more persons present holding or representing not less than one quarter of the aggregate principal amount of the Notes of the relevant Series for the time being outstanding shall form a quorum and shall have the power to pass the Extraordinary Resolution.
The initial Meeting (in respect of the Class B Notes) will commence at 10.00 a.m. (London Time). The subsequent Meeting in respect of the Class C Notes will be held after the completion of the preceding Meeting.
Unless the context requires otherwise, capitalised terms used but not defined in this Notice have the meanings given to them in the Trust Deed, the terms and conditions of the relevant Notes (the "Conditions") or the Consent Solicitation Memorandum (as defined below).
References herein to the "Meeting" are to the adjourned meetings convened hereby of the Noteholders.
In light of the adjournment, the Implementation Date (as defined in the Consent Solicitation Memorandum), being the date on which the Supplemental Trust Deed in respect of each Series of Notes and/or the Amendment Deed (as applicable) is executed by the relevant parties, is expected to be as soon as reasonably practicable after the announcement of the results of the Meetings (if the relevant Extraordinary Resolution is passed at the Meetings and the Eligibility Condition in respect of such Extraordinary Resolution has been satisfied).
The Extraordinary Resolutions being put to the Meetings are identical to those put to the Original Meetings. As such, any Voting Certificates obtained and Electronic Voting Instructions given in respect of the Original Meetings (unless revoked in accordance with the terms of the Trust Deed and, in the case of Electronic Voting Instructions, in accordance with the procedures of the Euroclear or Clearstream, Luxembourg, as the case may be) shall remain valid for the adjourned Meetings.
EXTRAORDINARY RESOLUTION
IN RESPECT OF THE CLASS B NOTES DUE 2049 (XS0197423774)
"THAT this meeting of the holders of the outstanding GBP61,000,000 Notes due 2049 of Equity Release Funding (No.4) PLC (the "Class B Notes" and the "Issuer" respectively) constituted by the trust deed dated 30 July 2004, as modified, supplemented and/or restated from time to time (the "Trust Deed"), made between, inter alios, the Issuer and Citicorp Trustee Company Limited (the "Trustee") as trustee for the holders of the Class B Notes (the "Noteholders"), hereby:
1. (subject to paragraph 8 of this Extraordinary Resolution) assents to the modification of: (A) the terms and conditions of the Class B Notes (the "Conditions") to provide for the replacement of LIBOR with SONIA as the reference rate for calculating interest in respect of the Class B Notes and certain other related amendments so that the relevant provisions of the Conditions will be in the form set out in "Annex C - Form of Amended Conditions" of the Consent Solicitation Memorandum; and (B) the terms of the ERF4 Relevant Documents pursuant to the Amendment Deed to reflect the change to the interest rate basis of the Notes;
2. (subject to paragraph 8 of this Extraordinary Resolution) authorises, directs, requests and empowers the Issuer and the Trustee to: (a) consent to and execute: (i) a Supplemental Trust Deed substantially in the form set out in "Annex B - Form of Supplemental Trust Deed" of the Consent Solicitation Memorandum and (ii) the Amendment Deed substantially in the form set out in "Annex D - Form of Amendment Deed" of the Consent Solicitation Memorandum, in each case to give effect to the changes referred to in paragraph 1 of this Extraordinary Resolution and such other changes as may be necessary, desirable or expedient in its sole opinion, and (b) execute and do all such other deeds, instruments, acts and things as may be necessary, desirable or expedient in its sole opinion to carry out and to give effect to this Extraordinary Resolution and the implementation of the modifications referred to in this Extraordinary Resolution;
3. (subject to paragraph 8 of this Extraordinary Resolution) sanctions and assents to every abrogation, modification or compromise of, or arrangement in respect of, the rights of the Noteholders against the Issuer appertaining to the Class B Notes and the ERF4 Relevant Documents, whether or not such rights arise under the Conditions, the Trust Deed or any other transaction documents, involved in or resulting from or to be effected by, the modifications referred to in paragraphs 1 and 2 of this Extraordinary Resolution and their implementation;
4. agrees that capitalised terms in this Extraordinary Resolution where not defined herein shall have the meanings given to them in the Consent Solicitation Memorandum (a copy of which is available for inspection by Eligible Noteholders as referred to in the Notice);
5. (a) discharges and exonerates the Trustee from, and indemnifies the Trustee against, any and all liability for which it may have become or may become responsible under the Trust Deed or the Class B Notes in respect of any act or omission in connection with this Extraordinary Resolution or its implementation and/or the modifications; and (b) irrevocably waives any claim against the Issuer or the Trustee which arises as a result of any loss or damage to the holders of the Notes suffered or incurred as a result of the Issuer or the Trustee following the terms of this Extraordinary Resolution (including for the avoidance of doubt, the directions and/or instructions contained herein), even though it may subsequently be found that there is a defect in this Extraordinary Resolution or that for any reason this Extraordinary Resolution is not valid or binding upon the holders of the Notes;
6. agrees that the Trustee is not responsible for the accuracy, completeness, validity or correctness of the statements made and documents referred to in this Extraordinary Resolution and the Consent Solicitation Memorandum or any omissions from this Extraordinary Resolution or the Consent Solicitation Memorandum;
7. confirms that the Trustee is hereby authorised and instructed not to obtain any legal opinions in relation to, or to enquire into the power and capacity of any person to enter into, the Amendment Deed or the Supplemental Trust Deed or the due execution and delivery thereof by any party thereto or the validity or enforceability thereof and they shall not be liable for any consequences resulting from this instruction;
8. declares that the implementation of this Extraordinary Resolution shall be conditional on:
(a) the relevant Consent Solicitation (as defined below) not having been terminated; (b) the passing of this Extraordinary Resolution;
(c) the quorum required for, and the requisite majority of votes cast at, this Meeting being satisfied by Eligible Noteholders, irrespective of any participation at this Meeting by Ineligible Noteholders and that, if the Extraordinary Resolution is passed at this Meeting but such condition is not satisfied, the chairman of this Meeting and the Trustee are hereby authorised, directed, requested and empowered to adjourn this Meeting for such period being not less than 14 days nor more than 42 days, to be held via teleconference, for the purpose of reconsidering Resolutions 1 to 9 of this Extraordinary Resolution with the exception of this resolution 8(c) of this Extraordinary Resolution. At any such adjournment of this Meeting, two or more persons present holding or representing not less than one quarter of the aggregate principal amount of the Class B Notes for the time being outstanding shall form a quorum and shall have the power to pass the Extraordinary Resolution, and this condition set out in this paragraph 8(c) will be satisfied if the quorum required for, and the requisite majority of votes cast at, such adjourned Meeting are satisfied by Eligible Noteholders irrespective of any participation at the adjourned Meeting by Ineligible Noteholders; and
9. acknowledges that the following terms, as used in this Extraordinary Resolution, shall have the following meanings given below:
"Consent Solicitation" means the invitation by the Issuer to Noteholders to consent to the modification of the Conditions relating to the Class B Notes and other related documents, as described in the Consent Solicitation Memorandum and as the same may be amended in accordance with its terms;
"Consent Solicitation Memorandum" means the consent solicitation memorandum dated 13 July 2021 prepared by the Issuer in relation to the Consent Solicitation;
"Eligible Noteholders" means a Noteholder who is (a) located and resident outside the United States and is not a U.S. person (as defined in Regulation S under the U.S. Securities Act of 1933, as amended), (b) an eligible counterparty or a professional client (each as defined in Directive 2014/65/EU) and, if applicable, who is acting on behalf of a beneficial owner that is also an eligible counterparty or a professional client, in each case in respect of the Class B Notes and (c) otherwise a person to whom the Consent Solicitation can be lawfully made and that may lawfully participate in the Consent Solicitation;
"ERF4 Relevant Documents" has the meaning given in the Consent Solicitation Memorandum; and
"Ineligible Noteholders" means a Noteholder that is not an Eligible Noteholder."
EXTRAORDINARY RESOLUTION
IN RESPECT OF THE CLASS C NOTES DUE 2049 (XS0197424236)
"THAT this meeting of the holders of the outstanding GBP16,500,000 Notes due 2049 of Equity Release Funding (No.4) PLC (the "Class C Notes" and the "Issuer" respectively) constituted by the trust deed dated 30 July 2004, as modified, supplemented and/or restated from time to time (the "Trust Deed"), made between, inter alios, the Issuer and Citicorp Trustee Company Limited (the "Trustee") as trustee for the holders of the Class C Notes (the "Noteholders"), hereby:
1. (subject to paragraph 8 of this Extraordinary Resolution) assents to the modification of: (A) the terms and conditions of the Class C Notes (the "Conditions") to provide for the replacement of LIBOR with SONIA as the reference rate for calculating interest in respect of the Class C Notes and certain other related amendments so that the relevant provisions of the Conditions will be in the form set out in "Annex C - Form of Amended Conditions" of the Consent Solicitation Memorandum; and (B) the terms of the ERF4 Relevant Documents pursuant to the Amendment Deed to reflect the change to the interest rate basis of the Notes;
2. (subject to paragraph 8 of this Extraordinary Resolution) authorises, directs, requests and empowers the Issuer and the Trustee to: (a) consent to and execute: (i) a Supplemental Trust Deed substantially in the form set out in "Annex B - Form of Supplemental Trust Deed" of the Consent Solicitation Memorandum and (ii) the Amendment Deed substantially in the form set out in "Annex D - Form of Amendment Deed" of the Consent Solicitation Memorandum, in each case to give effect to the changes referred to in paragraph 1 of this Extraordinary Resolution and such other changes as may be necessary, desirable or expedient in its sole opinion, and (b) execute and do all such other deeds, instruments, acts and things as may be necessary, desirable or expedient in its sole opinion to carry out and to give effect to this Extraordinary Resolution and the implementation of the modifications referred to in this Extraordinary Resolution;
3. (subject to paragraph 8 of this Extraordinary Resolution) sanctions and assents to every abrogation, modification or compromise of, or arrangement in respect of, the rights of the Noteholders against the Issuer appertaining to the Class C Notes and the ERF4 Relevant Documents, whether or not such rights arise under the Conditions, the Trust Deed or any other transaction documents, involved in or resulting from or to be effected by, the modifications referred to in paragraphs 1 and 2 of this Extraordinary Resolution and their implementation;
4. agrees that capitalised terms in this Extraordinary Resolution where not defined herein shall have the meanings given to them in the Consent Solicitation Memorandum (a copy of which is available for inspection by Eligible Noteholders as referred to in the Notice);
5. (a) discharges and exonerates the Trustee from, and indemnifies the Trustee against, any and all liability for which it may have become or may become responsible under the Trust Deed or the Class C Notes in respect of any act or omission in connection with this Extraordinary Resolution or its implementation and/or the modifications; and (b) irrevocably waives any claim against the Issuer or the Trustee which arises as a result of any loss or damage to the holders of the Notes suffered or incurred as a result of the Issuer or the Trustee following the terms of this Extraordinary Resolution (including for the avoidance of doubt, the directions and/or instructions contained herein), even though it may subsequently be found that there is a defect in this Extraordinary Resolution or that for any reason this Extraordinary Resolution is not valid or binding upon the holders of the Notes;
6. agrees that the Trustee is not responsible for the accuracy, completeness, validity or correctness of the statements made and documents referred to in this Extraordinary Resolution and the Consent Solicitation Memorandum or any omissions from this Extraordinary Resolution or the Consent Solicitation Memorandum;
7. confirms that the Trustee is hereby authorised and instructed not to obtain any legal opinions in relation to, or to enquire into the power and capacity of any person to enter into, the Amendment Deed or the Supplemental Trust Deed or the due execution and delivery thereof by any party thereto or the validity or enforceability thereof and they shall not be liable for any consequences resulting from this instruction;
8. declares that the implementation of this Extraordinary Resolution shall be conditional on:
(a) the relevant Consent Solicitation (as defined below) not having been terminated; (b) the passing of this Extraordinary Resolution;
(c) the quorum required for, and the requisite majority of votes cast at, this Meeting being satisfied by Eligible Noteholders, irrespective of any participation at this Meeting by Ineligible Noteholders and that, if the Extraordinary Resolution is passed at this Meeting but such condition is not satisfied, the chairman of this Meeting and the Trustee are hereby authorised, directed, requested and empowered to adjourn this Meeting for such period being not less than 14 days nor more than 42 days, to be held via teleconference, for the purpose of reconsidering Resolutions 1 to 9 of this Extraordinary Resolution with the exception of this resolution 8(c) of this Extraordinary Resolution. At any such adjournment of this Meeting, two or more persons present holding or representing not less than one quarter of the aggregate principal amount of the Class C Notes for the time being outstanding shall form a quorum and shall have the power to pass the Extraordinary Resolution, and this condition set out in this paragraph 8(c) will be satisfied if the quorum required for, and the requisite majority of votes cast at, such adjourned Meeting are satisfied by Eligible Noteholders irrespective of any participation at the adjourned Meeting by Ineligible Noteholders; and
9. acknowledges that the following terms, as used in this Extraordinary Resolution, shall have the following meanings given below:
"Consent Solicitation" means the invitation by the Issuer to Noteholders to consent to the modification of the Conditions relating to the Class C Notes and other related documents, as described in the Consent Solicitation Memorandum and as the same may be amended in accordance with its terms;
"Consent Solicitation Memorandum" means the consent solicitation memorandum dated 13 July 2021 prepared by the Issuer in relation to the Consent Solicitation;
"Eligible Noteholders" means a Noteholder who is (a) located and resident outside the United States and is not a U.S. person (as defined in Regulation S under the U.S. Securities Act of 1933, as amended), (b) an eligible counterparty or a professional client (each as defined in Directive 2014/65/EU) and, if applicable, who is acting on behalf of a beneficial owner that is also an eligible counterparty or a professional client, in each case in respect of the Class C Notes and (c) otherwise a person to whom the Consent Solicitation can be lawfully made and that may lawfully participate in the Consent Solicitation;
"ERF4 Relevant Documents" has the meaning given in the Consent Solicitation Memorandum; and
"Ineligible Noteholders" means a Noteholder that is not an Eligible Noteholder."
Background
The Issuer has convened the Meetings for the purpose of enabling Noteholders of each Series to consider and resolve, if they think fit, to pass the Extraordinary Resolution proposed in relation to the Notes of the relevant Series.
On 5 March 2021 (the "LIBOR Announcement Date"), the UK Financial Conduct Authority (the "FCA") confirmed that all Sterling LIBOR settings will either cease to be provided by any administrator or no longer be representative of their underlying market immediately after 31 December 2021 (the "LIBOR Announcement"). The FCA has also made a number of previous announcements regarding the proposed cessation of LIBOR). In relation to 3-month Sterling LIBOR in particular (as the interest rate benchmark currently applicable to the Notes), the LIBOR Announcement provided that immediately after 31 December 2021, such LIBOR setting would no longer be representative of the underlying market and economic reality and that such representativeness will not be restored. For additional background to the LIBOR Announcement, we refer to:
(a) the speech of Andrew Bailey, the Chief Executive of the FCA, on 27 July 2017 entitled "The Future of LIBOR";
(b) the statement of the FCA entitled "FCA Statement on LIBOR panels" dated 24 November 2017;
(c) the speech of Andrew Bailey, the Chief Executive of the FCA, on 12 July 2017 entitled "Interest rate benchmark reform - transition to a world without LIBOR";
(d) the "Dear CEO Letter" sent by the FCA and the Prudential Regulation Authority to major banks and insurers and published on the FCA website, dated 19 September 2018, relating to the need to transition from LIBOR to alternative benchmarks;
(e) the speech of Andrew Bailey, the Chief Executive of the FCA, on 15 July 2019 entitled "The Future of LIBOR";
(f) the statement of the FCA entitled "Transition from LIBOR" dated 4 September 2019; and
(g) the open letter from The Investment Association to issuers entitled "INVESTORS CALL ON COMPANIES TO TAKE URGENT ACTION AND TRANSITION THEIR LIBOR-LINKED BONDS" dated 3 February 2021.
(a) to (f) of the above is available from the website of the FCA at www.fca.org.uk and (g) is available at https://www.theia.org/media/press-releases/investors-call-companies-take-urgent-action-and-transition-their-libor-linked.
In 2017, the Bank of England (the "BoE") and the FCA announced that they had mandated a working group (the "Working Group") to implement a broad-based transition to the Sterling Overnight Index Average ("SONIA") across sterling bond, loan and derivative markets, so that SONIA is established as the primary sterling interest rate benchmark by the end of 2021. Therefore, Sterling LIBOR will not continue on the current basis after 2021, and regulators have urged market participants to take active steps to implement the transition to SONIA and other risk-free rates ahead of this deadline.
On the basis that the final maturity date of each Series of Notes falls after 2021, the Issuer has convened the Meetings for the purpose of enabling the Noteholders of each Series of Notes to consider and resolve, if they think fit, to approve the Proposals by way of an Extraordinary Resolution in relation to each Series of Notes, implementing respective changes in the interest basis specified in the Conditions from LIBOR to SONIA, and corresponding and/or consequential amendments (if any) to the ERF4 Relevant Documents.
The formula for calculating interest on each Series of Notes shall be as set out in Annex 1 to the Notice of Meetings. Due to the differences in the nature of LIBOR and SONIA, the replacement of LIBOR as the reference rate for each Series of Notes requires a corresponding credit adjustment spread to the existing Relevant Margin payable in respect of each Series of Notes. The Proposals use the "5-year historical median" methodology agreed by ISDA for determining this credit adjustment spread and recommended by the Working Group for use in cash products such as the Notes. It involves taking the median of the daily difference between LIBOR and SONIA in the 5 years leading up to the LIBOR Announcement Date. Using this methodology, the credit adjustment spread for 3-month Sterling LIBOR is 0.1193 per cent., as calculated and published by Bloomberg Index Services Limited on the LIBOR Announcement Date and as referenced on Bloomberg screen SBP0003M Index as of the date of this Consent Solicitation Memorandum.
The Trustee has not been involved in the formulation of the Extraordinary Resolutions and the Trustee expresses no opinion on the merits of any Extraordinary Resolution or on whether Noteholders would be acting in their best interests in approving the Extraordinary Resolutions, and nothing in this Notice should be construed as a recommendation to Noteholders from the Trustee to vote in favour of, or against, any Extraordinary Resolution. Noteholders should take their own independent financial, accounting and legal advice on the merits and on the consequences of voting in favour of, or against, the relevant Extraordinary Resolution(s), including as to any tax consequences. The Trustee has not reviewed, nor will it be reviewing, any documents relating to the Consent Solicitations, except those to which it will be a party and this Notice of Meetings. On the basis of the information set out in this Notice of Meetings (other than Annex 2 (Margin Adjustment) of the Notice of Meetings which it has not reviewed) and the Consent Solicitation Memorandum, the Trustee has authorised it to be stated that it has no objection to the Extraordinary Resolutions being put to Noteholders for their consideration.
Consent Solicitations
The Issuer has invited holders of the Notes of each Series (each such invitation a "Consent Solicitation") to consent to the approval, by Extraordinary Resolution at the relevant Meeting, of the modification of the Conditions relating to the relevant Series and related documents as described in the relevant Extraordinary Resolution as set out above, all as further described in the Consent Solicitation Memorandum (as defined in the relevant Extraordinary Resolution set out above).
The Consent Solicitation Memorandum and any other documents or materials relating to the Consent Solicitation are only for distribution or to be made available to persons who are Eligible Noteholders (as defined in the Extraordinary Resolution above).
Subject to the restrictions described in the previous paragraph, Noteholders may obtain, from the date of this Notice, a copy of the Consent Solicitation Memorandum from the Tabulation Agent, the contact details for which are set out below.
General
Eligible Noteholders may obtain, from the date of this Notice, a copy of the Consent Solicitation Memorandum from the Tabulation Agent, the contact details for which are set out below. A Noteholder will be required to produce evidence satisfactory to the Tabulation Agent as to his or her status as an Eligible Noteholder and that he or she is a person to whom it is lawful to send the Consent Solicitation Memorandum and to make an invitation to participate in the Consent Solicitations under applicable laws before being sent a copy of the Consent Solicitation Memorandum.
Copies of (i) the Trust Deed, (ii) this Notice of Meetings and (iii) the current drafts of the Supplemental Trust Deed and the Amendment Deed as referred to in the relevant Extraordinary Resolutions, are also available for inspection by Noteholders on and from the date of this Notice of Meetings up to and including the date of the Meetings, at the specified offices of the Tabulation Agent during normal business hours on any weekday (Saturdays, Sundays and public holidays excepted) up to and including the date of the Meetings and (b) at the Meetings. Any revised versions of the drafts of the Supplemental Trust Deed and the Amendment Deed made available as described above and marked to indicate changes to the draft made available on the date of this Notice of Meetings will supersede the previous drafts of the Supplemental Trust Deed and the Amendment Deed, and Noteholders will be deemed to have notice of any such changes.
The attention of Noteholders is particularly drawn to the procedures for voting, quorum and other requirements for the passing of the Extraordinary Resolutions at the Meetings or any meeting held following any adjournment of any Meeting, which are set out in the second paragraph of "Voting and Quorum" below. Having regard to such requirements, Noteholders are strongly urged either to attend the relevant Meeting(s) (via teleconference) or to take steps to be represented at the relevant Meeting(s) (including by way of submitting Electronic Voting Instructions in favour of the relevant Proposal (all such terms as defined in the Consent Solicitation Memorandum)) as soon as possible.
In light of the ongoing developments in relation to coronavirus (COVID-19), it may be impossible or inadvisable to hold the Meetings at a physical location. Therefore, in accordance with the provisions of the Trust Deed, the Issuer has requested that the Trustee prescribe appropriate regulations regarding the holding of the Meetings via teleconference, as further described below. Any Noteholders who have a Voting Certificate and indicate to the Tabulation Agent (the contact details for which are set out below) that they wish to attend the Meetings (via teleconference) will be provided with further details about attending the Meetings. Noteholders who do not indicate to the Tabulation Agent prior to the Meetings that they wish to attend the Meetings will not be provided with details about attending the meeting and will not be able to attend the Meetings whether or not they hold a Voting Certificate.
Noteholders who have submitted Electronic Voting Instructions (and thereby requested that their votes are included in a form of proxy appointing one or more representatives of the Tabulation Agent as its proxy to attend the Meetings (and any adjourned Meeting) and to vote in the manner specified or identified in such Electronic Voting Instruction) will be unaffected by these alternative regulations and will not be requested to take any further action. The Issuer will take appropriate steps to ensure that only those who would otherwise be entitled to attend and vote at a physical meeting will be entitled to attend the teleconference.
Voting and Quorum
Noteholders who have submitted and not revoked (in the limited circumstances in which revocation is permitted) a valid Electronic Voting Instruction in respect of the relevant Extraordinary Resolution, by which they will have given instructions for the appointment of one or more representatives of the Tabulation Agent by Principal Paying Agent as their proxy to attend and vote (as specified in the relevant Electronic Vote Instruction) in respect of the relevant Extraordinary Resolution at the relevant Meeting and any meeting held following any adjournment of the relevant Meeting, need take no further action to be represented at the relevant Meeting or any such adjourned meeting. Further details on how to submit an Electronic Voting Instruction are set out below.
Noteholders who have not submitted or have submitted and subsequently revoked (in the limited circumstances in which such revocation is permitted) an Electronic Voting Instruction in respect of the relevant Extraordinary Resolution should take note of the relevant provisions set out below detailing how such Noteholders can attend or take steps to be represented at the relevant Meeting (references to which, for the purpose of such provisions, include, unless the context otherwise requires, any meeting held following any adjournment of the relevant Meeting).
1. Subject as set out below, the provisions governing the convening and holding of a meeting of the Noteholders are set out in Schedule 4 to the Trust Deed, a copy of which is available for inspection by the Noteholders as referred to above.
Each person (a beneficial owner) who is the owner of a particular aggregate principal amount of the Notes through Euroclear, Clearstream, Luxembourg or a person who is shown in the records of Euroclear or Clearstream, Luxembourg as a holder of the Notes (a "Direct Participant"), should note that a beneficial owner will only be entitled to attend and vote at the relevant Meeting in accordance with the procedures set out below and where a beneficial owner is not a Direct Participant it will need to make the necessary arrangements, either directly or with the intermediary through which it holds its Notes, for the Direct Participant to complete these procedures on its behalf.
A Noteholder who wishes to attend and vote at the relevant Meeting and any adjourned such Meeting in person must have obtained a valid Voting Certificate issued by the Principal Paying Agent.
A Noteholder may obtain a Voting Certificate in respect of its Notes from the Tabulation Agent by arranging for its Notes to be blocked in an account with Euroclear or Clearstream, Luxembourg (unless the Note is the subject of a block voting instruction which has been issued and is outstanding in respect of the relevant Meeting or any adjourned such Meeting) not less than 48 hours before the time fixed for the Meeting (or, if applicable, any adjourned such Meeting) and within the relevant time limit specified by Euroclear or Clearstream, Luxembourg, as the case may be, upon terms that the Notes will not cease to be so blocked until the first to occur of the conclusion of the relevant Meeting or any adjourned such Meeting and the surrender of the Voting Certificate to the Tabulation Agent and notification by the Tabulation Agent to Euroclear or Clearstream, Luxembourg, as the case may be, of such surrender or the compliance in such other manner with the rules of Euroclear or Clearstream, Luxembourg, as the case may be.
The Issuer notes that in accordance with advice issued by the U.K. government following the COVID- 19 outbreak, non-essential meetings continue to be discouraged under the guidance and that there continue to be restrictions on the number of people that can meet indoors. The Issuer is therefore convening the Meetings by way of teleconference as opposed to holding a physical meeting. Details of the teleconference will be provided to Noteholders requesting Voting Certificates.
A Noteholder not wishing to attend and vote at the relevant Meeting may either deliver the Voting Certificate to the person whom it wishes to attend on its behalf or give a voting instruction (in the form of an electronic voting instruction (an "Electronic Voting Instruction") in accordance with the standard procedures of Euroclear and/or Clearstream, Luxembourg) to, and require the Principal Paying Agent to, include the votes attributable to its Notes in a block voting instruction issued by the Principal Paying Agent for the relevant Meeting or any adjourned such Meeting, in which case the Principal Paying Agent shall appoint a proxy to attend and vote at such Meeting in accordance with such Noteholder's instructions.
If a Noteholder wishes the votes attributable to its Notes to be included in a block voting instruction for the relevant Meeting or any adjourned such Meeting, then (i) the Noteholder must arrange for its Notes to be blocked in an account with Euroclear or Clearstream, Luxembourg for that purpose and (ii) the Noteholder or a duly authorised person on its behalf must direct the Principal Paying Agent as to how those votes are to be cast by way of an Electronic Voting Instruction, not less than 48 hours before the time fixed for the relevant Meeting (or, if applicable, any adjourned such Meeting) and within the time limit specified by Euroclear or Clearstream, Luxembourg, as the case may be, upon terms that the Notes will not cease to be so blocked until the first to occur of (i) the conclusion of the relevant Meeting or any adjourned such Meeting and (ii) not less than 24 hours before the time for which the relevant Meeting is convened, the notification in writing of any revocation of a Noteholder's previous instructions to the Principal Paying Agent and the same then being notified in writing by the Principal Paying Agent to the Issuer and the Trustee and such Notes ceasing in accordance with the procedures of Euroclear or Clearstream, Luxembourg, as the case may be, and with the agreement of the Principal Paying Agent to be held to its order or under its control.
Each Noteholder which arranges for an Electronic Voting Instruction to be submitted must also confirm in such Electronic Voting Instruction whether it is an Eligible Noteholder or an Ineligible Noteholder. Noteholders voting pursuant to forms of proxy will also be required to confirm whether they are an Eligible Noteholder or an Ineligible Noteholder.
For the above purposes, instructions given by Direct Participants to the Tabulation Agent through Euroclear or Clearstream, Luxembourg will be deemed to be instructions given to the Principal Paying Agent.
2. As the proposed amendment is a Basic Terms Modification (as defined in the Trust Deed), the quorum required for each Extraordinary Resolution to be considered at the relevant Meeting is two or more persons present (including by teleconference) and holding or representing in the aggregate not less than one quarter of the aggregate principal amount of the Notes of the relevant Series for the time being outstanding.
In the event such quorum is not present (including by teleconference) within 30 minutes from the time initially fixed for a Meeting, such Meeting shall be adjourned until such date, not less than 14 nor more than 42 days later, to be held via teleconference. At any such adjourned Meeting two or more persons present (including by teleconference) and holding or representing in the aggregate not less than one quarter of the aggregate principal amount of the Notes of the relevant Series for the time being outstanding will form a quorum.
Voting Certificates obtained and Electronic Voting Instructions given in respect of any Meeting (unless revoked in accordance with the terms of the Trust Deed and, in the case of Electronic Voting Instructions, in accordance with the procedures of the Euroclear or Clearstream, Luxembourg, as the case may be) shall remain valid for any such adjourned Meeting.
Noteholders should note these quorum requirements and should be aware that, if the Noteholders either present (including by teleconference) or appropriately represented at the relevant Meeting are insufficient to form a quorum for the relevant Extraordinary Resolution, such Extraordinary Resolution cannot be formally considered at such Meeting. Noteholders are therefore encouraged either to attend the relevant Meeting (via teleconference) or to arrange to be represented at the relevant Meeting as soon as possible.
3. Every question submitted to a Meeting shall be decided in the first instance by a show of hands and in case of equality of votes the chairman of the relevant Meeting shall both on a show of hands and on a poll have a casting vote in addition to the vote or votes (if any) to which he may be entitled as a holder of a Voting Certificate or as a proxy or as a representative.
Unless a poll is (before, or on the declaration of the result of, the show of hands) demanded by the chairman of the relevant Meeting, the Issuer, the Trustee or any person present holding or representing not less than 2 per cent. of the principal amount outstanding of the Notes of the relevant Series then outstanding, a declaration by the chairman of the relevant Meeting that a resolution has been carried or carried by a particular majority or lost or not carried by a particular majority shall be conclusive evidence of the fact without proof of the number or proportion of the votes recorded in favour or against such resolution.
On a show of hands every person who is present and is a holder of Notes or is a proxy or representative shall have one vote. On a poll every such person shall have one vote in respect of each GBP1,000 (or such other amount as the Trustee may, in its discretion, stipulate) in aggregate principal amount outstanding of the Notes of the relevant Series in respect of which he or she is a holder, proxy or representative.
4. To be passed at the relevant Meeting, an Extraordinary Resolution requires a majority of at least three-fourths of the votes cast in respect of such Extraordinary Resolution. If passed, an Extraordinary Resolution shall be binding on all Noteholders of the relevant Series, whether or not present at the Meeting at which it is passed and whether or not voting.
This Notice is given by Equity Release Funding (No.4) PLC.
Noteholders should contact the following for further information:
The Solicitation Agent
NatWest Markets Plc
250 Bishopsgate
London EC2M 4AA
United Kingdom
Telephone: +44 20 7678 5222
Attention: Liability Management
Email: liabilitymanagement@natwestmarkets.com
The Tabulation Agent
Lucid Issuer Services Limited
Tankerton Works
12 Argyle Walk
London WC1H 8HA
United Kingdom
Telephone: +44 20 7704 0880
Attention: Owen Morris
Email: aviva@lucid-is.com
Dated: 04 August 2021
ANNEX 1 - COMPOUNDED DAILY SONIA
"Compounded Daily SONIA", means the rate of return of a daily compound interest investment (with the daily Sterling overnight reference rate as reference rate for the calculation of interest) with respect to an Interest Period, will be calculated by the Agent Bank on the relevant Interest Determination Date in accordance with the following formula, and the resulting percentage will be rounded, if necessary, to the fourth decimal place, with 0.00005% being rounded upwards:
where:
"d" means, for any Interest Period, the number of calendar days in such Interest Period;
"d o " means, for any Interest Period, the number of London Banking Days in such Interest Period;
"i" means, for any Interest Period, a series of whole numbers from one to "do", each representing the relevant London Banking Day in chronological order from, and including, the first London Banking Day in such Interest Period to, and including, the last London Banking Day in such Interest Period;
"Interest Determination Date" means, in respect of any Interest Period, the date falling 5 London Banking Days prior to the Interest Payment Date for such Interest Period (or the date falling 5 London Banking Days prior to such earlier date, if any, on which the Notes are due and payable);
"London Banking Day" or "LBD" means any day on which commercial banks are open for general business (including dealing in foreign exchange and foreign currency deposits) in London;
"n i " for any London Banking Day "i", in the relevant Interest Period, the number of calendar days from, and including, such London Banking Day "i" up to, but excluding, the following London Banking Day;
"p" means 5 London Banking Days;
"Relevant Period" means, in respect of an Interest Period, the period from, and including, the date falling 5 London Banking Days prior to the first day of such Interest Period and ending on, but excluding, the date which is "p" (5 London Banking Days) prior to the Interest Payment Date for such Interest Period (or the date falling "p" (5 London Banking Days) prior to such earlier date, if any, on which the Notes become due and payable);
"SONIA Reference Rate" means, in respect of any London Banking Day, a reference rate equal to the daily Sterling Overnight Index Average ("SONIA") rate expressed as a percentage for such London Banking Day as provided by the administrator of SONIA to authorised distributors and as then published on Refinitiv Screen SONIA Page (or if that page is unavailable, as otherwise is published by such authorised distributors) (the "Screen Page") on the London Banking Day immediately following such London Banking Day; and
"SONIA i-pLBD " means, in respect of any London Banking Day "i" falling in the relevant Interest Period, the SONIA Reference Rate for the London Banking Day falling "p" (5 London Banking Days) prior to the relevant London Banking Day "i".
If, in respect of any London Banking Day in the applicable Relevant Period, the Agent Bank determines that the SONIA Reference Rate is not available on Refinitiv Screen SONIA Page or has not otherwise been published by the relevant authorised distributors, such SONIA Reference Rate shall be: (i) the Bank of England's Bank Rate (the "Bank Rate") prevailing at close of business on the relevant London Banking Day; plus (ii) the mean of the spread of the SONIA Reference Rate to the Bank Rate over the previous five London Banking Days on which a SONIA Reference Rate has been published, excluding the highest spread (or, if there is more than one highest spread, one only of those highest spreads) and lowest spread (or, if there is more than one lowest spread, one only of those lowest spreads) to the Bank.
Notwithstanding the paragraph above, in the event the Bank of England (or working group thereof) publishes guidance as to (i) how the SONIA Reference Rate is to be determined; or (ii) any rate that is to replace the SONIA Reference Rate, the agent bank (or such other party responsible for the calculation of the rate of interest, as specified in the applicable final terms) shall, subject to receiving written instructions from the Issuer to the extent that it is reasonably practicable, follow such guidance in order to determine SONIA (including any credit spread adjustment in order to reduce or eliminate, to the extent reasonably practicable, any transfer of economic value to or from the Issuer as a result of the replacement or adjustment of SONIA) for the purpose of the relevant calculation for so long as the SONIA Reference Rate is not available or has not been published by the authorised distributors.
If the Rate of Interest cannot be determined in accordance with the foregoing provisions in relation to any Interest Period, the Rate of Interest applicable to the Notes during such Interest Period shall be that determined as at the last preceding Interest Determination Date.
If the relevant Series of Notes become due and payable in accordance with Conditions 9 (Events of Default) or 10 (Enforcement of Notes), the final Interest Determination Date shall, notwithstanding the definition specified above, be deemed to be the date on which such Notes became due and payable and the Rate of Interest on such Notes shall, for so long as any such Note remains outstanding, be the rate determined on such date.
ANNEX 2 - MARGIN ADJUSTMENT
Rationale for the Noteholder Proposal
The formula for calculating interest on each Series of Notes shall be as set out in Annex 1 to the Notice of Meetings. Due to the differences in the nature of LIBOR and SONIA, the replacement of LIBOR as the reference rate for each Series of Notes requires a corresponding credit adjustment spread to the existing Relevant Margin payable in respect of each Series of Notes. The Proposals use the "5-year historical median" methodology agreed by the International Swaps and Derivatives Association ("ISDA") for determining this credit adjustment spread and recommended by the Working Group for use in cash products such as the Notes. It involves taking the median of the daily difference between LIBOR and SONIA in the 5 years leading up to the LIBOR Announcement Date. Using this methodology, the credit adjustment spread for 3-month Sterling LIBOR is 0.1193 per cent., as calculated and published by Bloomberg Index Services Limited on the LIBOR Announcement Date and as referenced on Bloomberg screen SBP0003M Index as of the date of this Consent Solicitation Memorandum.
For the avoidance of doubt, the interest basis applicable to each Series of Notes up to but excluding the Effective Date will continue to be Sterling LIBOR, and interest payments made on the Effective Date will not be affected by the pricing methodology proposed in this Consent Solicitation Memorandum.
If, in respect of a Series of Notes, the Extraordinary Resolution is passed at the adjourned Meeting and the Eligibility Condition is satisfied, the modifications with respect to such Series described in the Consent Solicitation Memorandum may be implemented on the Implementation Date with effect from the relevant Effective Date.
The Margin Adjustment
In respect of a Series of Notes, the Rate of Interest that will be effective from the relevant Effective Date will be equal to Compounded Daily SONIA plus the New Margin.
New Margin means:
A. the Current Margin; plus B. the Relevant Credit Adjustment Spread,
where:
A. Current Margin means (i) in the case of the Class A2 Notes, 0.70 per cent., (ii) in the case of the Class B Notes, 1.50 per cent., (iii) in the case of the Class C Notes, 3.30 per cent. and (iv) in the case of the Class D Notes, 3.90 per cent.
B. Relevant Credit Adjustment Spread means 0.1193 per cent.
The detailed provisions relating to the calculation of Compounded Daily SONIA are set out in the Supplemental Trust Deed.
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August 04, 2021 06:04 ET (10:04 GMT)
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