Issue of Debt (2882J)

TIDM35UC

RNS Number : 2882J

Southern Pacific Financing 04-A plc

28 June 2011

THIS NOTICE IS IMPORTANT AND REQUIRES THE IMMEDIATE ATTENTION OF NOTEHOLDERS. IF 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.

IMPORTANT NOTICE TO THE HOLDERS OF THE

Class A GBP305,200,000 mortgage backed floating rate notes due 2042

(the "Class A Notes") (Reg S ISIN: XS0190203124) with detachable A Coupons (Reg S ISIN: XS0190204106)

Class B GBP21,000,000 mortgage backed floating rate notes due 2042

(the "Class B Notes") (Reg S ISIN: XS0190204445)

Class C GBP11,550,000 mortgage backed floating rate notes due 2042

(the "Class C Notes") (Reg S ISIN: XS0190205178)

Class D GBP8,750,000 mortgage backed floating rate notes due 2042

(the "Class D Notes") (Reg S ISIN: XS0190205681)

Class E GBP3,500,000 mortgage backed floating rate notes due 2042

(the "Class E Notes") (Reg S ISIN: XS0190206143)

issued by

Southern Pacific Financing 04-A PLC

(the "Issuer")

on or about 29 April 2004

The Class A Notes, Class B Notes, Class C Notes, Class D Notes and Class E Notes are together referred to as the "Notes".

Capitalised terms used but not otherwise defined herein shall have the meanings ascribed to them in the Terms and Conditions of the Notes set out in the Trust Deed (the "Trust Deed") dated 28 April 2004 (as amended) and entered into between the Issuer and Capita IRG Trustees Limited (the "Trustee"), the master definitions schedule (the "Master Definitions Schedule") dated 28 April 2004 and the Deed (as defined below).

In accordance with their respective mortgage arrangements, customers of Southern Pacific Mortgages Limited ("SPML") make mortgage payments into the Barclays Collection Accounts held at Barclays Bank PLC ("Barclays"). A majority of mortgage customers make their mortgage payments by direct debit. Such electronic payments are made in accordance with the direct debit scheme (the "Scheme") and are governed by rules (the "Bacs Rules") established by BACS Payment Schemes Limited ("Bacs"). Barclays currently provides, as a Collection Account Bank, direct debit sponsorship to SPML (the "Sponsorship"), together with related direct debit services (the "Services").

Pursuant to the current Bacs Rules, any company that wishes to receive payments by direct debit must become a Bacs approved servicer user (a "Service User"). Once approved, a Service User is allocated a single Service User number (a "SUN") that will be used by financial institutions to correctly allocate direct debit payments to the relevant Service User. SPML currently has one SUN for direct debit payments made into all the accounts that the company has open at Barclays for its various securitisation transactions.

Barclays provide direct debit sponsorship to SPML for the Barclays Collection Accounts in relation to indemnity claims that may be made by customers against SPML as the Service User. Indemnity claims are currently raised manually by Barclays with Acenden Limited (previously known as Capstone Mortgage Services Limited) ("Acenden") as Cash/Bond Administrator for the Issuer and settled by Barclays positively making a payment from the Barclays Collection Accounts.

Barclays have informed us that Bacs have recently updated the Scheme so that payments which are the subject of an indemnity claim will be required to be automatically clawed back from the Barclays Collection Accounts. The new automated service went live on 18 October 2010 and the final migration date for all financial institutions to be using the new process was 30 April 2011.

Barclays' agreement to the continued provision of the Sponsorship and the Services is subject to certain modifications being made to the Transaction Documents to address concerns Barclays have in relation to their liability regarding customer payments made by direct debit, cheque, credit or debit card payments, their compliance with rules governing payments made by direct debit and their rights as a Secured Creditor to the Transaction Documents. Such modifications include documenting and/or clarifying the following:

(a) the terms on which Barclays is providing the Sponsorship and Services in relation to the Barclays Collection Accounts (the current form of the Bank Agreement does not specifically set out the terms on which Barclays agree to provide such Sponsorship and Services);

(b) that, for the avoidance of doubt, the liability of Barclays in relation to the provision of Sponsorship and the Services pursuant to the Bank Agreement are secured (and obligations of the Issuer) in accordance with the Deed of Charge;

(c) Barclays' right of set off against the Barclays Collection Accounts in relation to liability that it may incur due to amounts paid by direct debit, cheque, credit or debit card not cleared for fate or clawed back for whatever reason;

(d) reporting obligations of the Cash/Bond Administrator to Barclays in relation to the status of clawback claims by customers pursuant to the Direct Debiting Scheme; and

(e) the debiting of Barclays' administrative fees in relation to the Bank Accounts as and when they fall due from the relevant Bank Accounts (together with a waiver from the parties to the Bank Agreement for undertaking such arrangement in the past in breach of the terms of the Bank Agreement and the Deed of Charge).

Barclays confirmed to the Issuer that they would no longer agree to continue to provide Sponsorship or Services to SPML in relation to the Collection Accounts unless the aforementioned modifications and clarifications were made by the relevant parties to the Bank Agreement. If Barclays had ceased to provide such Sponsorship or Services in relation to the Collection Accounts, amounts paid by customers using the Direct Debit Scheme would no longer have been able to be received into the Collection Accounts. This would have resulted in a material reduction of funds available from customers to pay Noteholders in accordance with the Transaction Documents. Such a reduction may have meant that we would have insufficient funds to pay all amounts due to Noteholders under the Notes when they fall due. The Issuer therefore confirmed to the Trustee that it was in the interests of the Noteholders for the Trustee to consent to the modification of the Bank Agreement and the creation by SPML of the new SUN so that Barclays agreed to continue to provide Sponsorship and Services in relation to the Barclays Collection Accounts and that there would be materially prejudicial implications for Noteholders if the Trustee had not done so. Furthermore, in conjunction with Acenden, the Issuer concluded that, as far as it was aware and having made all reasonable enquiries, the only commercially feasible course was to accommodate Barclays' requirements.

In light of the above, an accession, amendment and interface deed dated 18 April 2011 (the "Deed") was entered into between, among others, Barclays, the Trustee and the Issuer in order to accommodate Barclays' requirements for the continued provision of Sponsorship and the Services. Such Deed is available for inspection at the registered office of the Issuer during normal business hours.

This Notice is given by the Issuer.

24 June 2011

This information is provided by RNS

The company news service from the London Stock Exchange

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