Wasps 22 Discussion Threads

[bsharman3] 06/7/2022 16:13

So the likelihood is that we won't get back the value of our bonds and will lose our hard earned investment? What a nightmare.

[1bondinvestor] 06/7/2022 15:13

By the time the August date arrives I expect a further extension to be announced. It will be a case of kicking the can further down the road. Why would any responsible institution consider the refinance in view of the controversial background & Wasps' poor financial position? I wrote to the trustees but they require proof of ownership before replying. This is awaited from Hargreaves Lansdown. From other postings I note that the trustees want their costs covered by investors before considering enforcement action. It will be difficult to get bondholders to agree & contribute. We are in the position of having security for the bond but little prospect of realising it. One possibility is an action by solicitors on a profit sharing basis, that is no win no fee. It would mean a haircut for bondholders but it would at least be better than hanging on indefinitely on an unquoted investment.

[dandigirl] 06/7/2022 13:44

Hi: At 12 (a) I read the piece below in the Prospectus which refers to The Trust Deed. Was wondering if the Deed itself adds any more detail. Also there are Transaction Documents covering enforcement of security.

Having been involved on the fringes of one or two of these in the past, putting together a big enough group is an expensive, time-consuming and thankless task. People just don't want to divvy up towards the costs. Talk is easy. Making a bank transfer is not so.

Anybody remember Mark Taber who did brilliantly in similar situations back in the day.

Besides, it will be the end of the month in the blink of an eye. We should know more then. Personally, I am hopeful. Richardson paid interest to maturity and appears to be trying to refinance.



""""""""Meetings of Bondholders: The Trust Deed contains provisions for convening meetings of Bondholders to consider matters affecting their interests, including the sanctioning by Extraordinary Resolution of a modification of any of these Conditions or any provisions of the Transaction Documents. Such a meeting may be convened by Bondholders holding not less than 10 per cent. in nominal amount of the Bonds for the time being outstanding. The quorum for any meeting convened to consider an Extraordinary Resolution will be two or more persons holding or representing a clear majority in nominal amount of the Bonds for the time being outstanding, or at any adjourned meeting two or more persons being or representing Bondholders whatever the nominal amount of the Bonds held or represented, unless the business of such meeting includes consideration of proposals, inter alia, (i) to modify the maturity of the Bonds or the dates on which interest is payable in respect of the Bonds, (ii) to
reduce or cancel the nominal amount of, or interest on, the Bonds, (iii) to change the currency of payment of the Bonds or the Coupons, or (iv) to modify the provisions concerning the quorum required at any meeting of Bondholders or the majority required to pass an Extraordinary Resolution, (v) to modify or cancel the Guarantee or (vi) to modify, amend, waive or release any part of the Security, in which case the necessary quorum will be two or more persons holding or representing not less than 75 per cent., or at any adjourned meeting not less than 25 per cent., in nominal amount of the Bonds for the time being outstanding. Any Extraordinary Resolution duly passed shall be binding on Bondholders (whether or not they
were present at the meeting at which such resolution was passed) and on all Couponholders.

The Trust Deed provides that a resolution in writing signed by or on behalf of the holders of not less than 90 per cent. in nominal amount of the Bonds outstanding shall for all purposes be as valid and effective as an Extraordinary Resolution passed at a meeting of Bondholders duly convened and held. Such a resolution in writing may be contained in one document or several documents in the same form, each signed by or on behalf of one or more Bondholders"""""""".

[barondene] 06/7/2022 13:44

Did not realise the Trust Document was in the prospectus - I must have fallen asleep before then

I think LS2 must have missed the number of financial, regulatory and reporting defaults WASPS have had plus they still have not filed 3 Subsidiary Company Accounts ( despite the Holding Company signing off last November ) and the Interim Accounts for December not filed?

So they do comply but only after being pursued

[addition] 06/7/2022 13:04

Hello, it's all in the original prospectus. The Trustee has said as much in the announcements posted below as well (hard reading!). You have the prospectus?

The trustee has not mentioned the Extraordinary Resolution (ER)threshold in its communications, I am not sure why. If anyone is in contact with the trustee, you may wish to ask about the ER.

[dandigirl] 06/7/2022 12:47

Addition: Your post suggests that you have seen a copy of the Trust Deed? Care to post a link please? Thanks.

[barondene] 06/7/2022 12:42

The following is NOT advice or intended to be and is only for general information

@thincat1 Sadly I think the Trustee document is skewed in favour of the Trustees. I assume you and your broker have not read it ?

I have been given some guidance thus:

Everything that has been told to you by the Trustee is, in essence, correct. The payment/indemnity of his costs by the bondholders is standard and covered in Case Law

[addition] 06/7/2022 12:26

The bottom line here is that bondholders need to get organised if they want greater control. It does appear that some prefer to be passive, do nothing and accept what they are told. That’s one strategy.

It appears that the Trustee is waiting to be instructed by the requisite number of investors but there are wider issues here (the de-listing) which have the potential to impact reputations – and one wonders if that has been thought through properly. It is also possible that the Trustee is saving you from yourselves (at the moment) on the basis that accelerating is quite aggressive when they may be privy to more information about the refinancing than you are. Or they may have no more information than you at all – I think one post below said as much. Perhaps the Trustee will accelerate without instruction if the refinancing does not occur to plan (or for some other reason).

Let’s suppose you do get organised and you do instruct the Trustee to accelerate following an Extraordinary Resolution (which needs less of you, 10%) or by 25% of you. The Trustee has said that subject to being indemnified, secured and funded that they will then take action. If they don’t within a reasonable amount of time then bondholders can step-in. It gets a bit complicated but the processes are there.

Someone asked: will get your money back if and when the issuer refinances the bonds. If a funder comes in and is prepared to lend at least £35m plus accrued interest, then you get your money back. Some investors have noted that the issuer has had seven years to plan a refinancing, they waited until the last day of the bond to tell you a refinancing wasn’t happening, then that it was expected to happen before 30 June and that now, it is expected before 12 August. Some investors are seeing an emerging pattern.

Currently, you know the issuer is working on a refinancing and you know who has been looking at it (a bank and the local council). Let’s give them some leeway, the refinancing may happen and you will find out before the end of the month. It is also possible that the refinancing might not happen. Interest rates are going up and there is inflation. The refinancing might not happen if the new lenders cannot agree terms between each other or if the issuer thinks the terms are punitive. If the terms offered are good, then it would seem rational for the issuer to refinance and pay bondholders back. If the terms offered are not so good (for the issuer and owner) then things could drag on – perhaps the issuer will just say that the refinancing plans are expected to happen by another date.

Until bondholders step-up and get organised, all you will ever know is what someone wishes to tell you. At the moment the Trustee is waiting to be told what to do (by bondholders). The Trustee is not obliged to do anything until told to issue an acceleration notice. To get an acceleration notice issued, 10% of bondholders need to call an Extraordinary Resolution meeting or 25% of bondholders can just instruct the Trustee to do so.

Once an acceleration notice is issued, the bonds become immediately repayable and things get interesting. Bondholders may get more control (via the Trustee) over what happens next rather than being passive receivers of information. Just bear in mind (and the following numbers are all made up) that some bondholders’ views on what constitutes getting their money back might be different from yours. You may have paid £60 for your bond and I may have paid £100 (I don’t own any bonds) – so our view will differ. You may be willing to accept a lower offer (and still get all your money back) than me for example. The Trustee will consider solutions for bondholders as a group, not as individuals.

First though, your bonds need to be re-listed because that will enable a market to operate and that will allow you to sell (or buy) at the market price. This de-listing (as others have pointed out below) is quite unusual and probably should not have happened. Others have pointed out that the Trustee has asked the LSE to re-list the bond but the LSE does not do that, the FCA does. If the FCA re-lists the bonds the LSE will re-admit them to trading and a market should start. So the Trustee should be talking to the FCA (and the LSE). It is impossible to say whether the bonds will be re-listed but if they are, this will give you the ability to get some or all of your money back.

There are ways to get your money back:

1. you should have been able to do this through the secondary market but you cannot. But that might be fixed but we don’t know when.
2. The issuer might refinance as they say they will – the best solution, fingers crossed
3. You may need to get (some or all of) your money back by getting organised and getting the Trustee to take more affirmative action on your behalf

[l2s] 06/7/2022 11:26

Sorry Thincat1, I am going to totally disagree with you. I do not think that "It would be better if trustees were required to act at once in a default, and recovered their costs from the issuer, not the bondholders." On the contrary, I think it would always be better for a Trustee to use discretion and take only timely appropriate action for the purpose of ensuring that Bondholders receive all their money back. It is not the role of Trustees to act as some big stick to beat the company with for failing to meet a maturity date particularly when there is still no evidence that the loan will not actually be repaid. Yes, they missed the maturity date and yes, they missed the end of June expected date but, as we all seem to be discovering, everything seems to take longer to achieve nowadays than anyone expects!

[thincat1] 06/7/2022 10:54

Last week, I asked Chris Hobbs "May I ask what is holding you back from issuing an acceleration document? I can see that this is at your discretion, but these bonds are in default and the issuer has failed to do what they were expected to do today. My understanding was that these were the circumstances which trustees exist to remedy."

I've now had a reply from Lawrence Griffiths; "Further to your email below, we thought it may be useful to directly share a further notice the Trustee published on Friday in relation to this matter which you should also receive via your custodian/broker.

"In the notices we have published (in particular the notice of 1st June) we noted that pursuant to the relevant provisions of the Trust Deed, the Trustee is not minded to exercise its discretion to accelerate the bond at this stage and will not take any steps to accelerated or enforce unless so directed by the requisite amount of bondholders and indemnified and/or secured and/or pre-funded to its satisfaction. The requisite amount of bondholders required under the terms of the Trust Deed in this instance is one quarter in nominal amount.

"Please feel free to let us know if you have any additional questions or would like to discuss further."

This doesn't answer my question. So I replied on Monday "May I ask why you aren't minded to intervene? The bonds are in default and the issuer failed to arrange refinancing within the timeline that they indicated. They also delisted the bonds without notifying or compensating the holders. Also, if the issuer also fails to redeem the bonds on 12 August, will you then issue an acceleration notice? What would it take to spur the trustee into action?"

It seems the Trustee is unwilling to do anything without pressure from enough bondholders and indemnification. One of the lessons from this is that protections of bondholders in the case of default are weaker than I thought. It would be better if trustees were required to act at once in a default, and recovered their costs from the issuer, not the bondholders.

[pusb] 06/7/2022 10:17

That’s very dismissive of someone who may be reliant on repayment of their money, invested in good faith in a scheme which has breached twice so far.

[fastcat99] 06/7/2022 07:33

Hmmm - a Reader’s Digest customer ! 😀

[bsharman3] 06/7/2022 07:05

Will we (bondholders) get our money back?

[barondene] 02/7/2022 08:17

I am not an advisor nor that knowledgeable, so following is just a suggestion:

I understand, it only takes a Bondholder to request the Trustee to organise a call / meeting or similar to other Bondholders to consider further action or approve of the current stance

At least you might learn of why the Trustee is taking his current stance

[fastcat99] 01/7/2022 23:57

hi everyone,

I received the two Default Notices yesterday as pdf attachments to an email from 'the Trustee' (specifically [e-mail]) which seems to contain essentially the same text as zzaxx99 also reported, yesterday evening #605.

Chris' email contained two (disingenuous, irritating) paragraphs to explain the Trustee's point of view with regard to communication:

"The Trustee issued notices through the bond clearing systems (Euroclear and Clearstream) on 17 May 2022 and 1 June 2022, both attached here for your reference.

"The contact information of the Trustee is set out in the 1 June 2022 notice – you MAY WISH TO ASK YOUR BROKER why this information was not passed onto you."

I have since had a lengthy discussion with my own broker on this issue (no SIPP/ISA wrapper involved, btw) – he doesn't regularly follow Euroclear and Clearstream as they are not primarily BULLETIN boards like RNS: indeed, if I have correctly grasped the technical detail, they don't generate automatic alerts in the same way.
Moreover it seems to me highly questionable for the Trustee to have relied (apparently exclusively) on independent BROKERS to his Notices to us
– since the LSE delisting announcement on 17 May, this stock cannot be legally traded, and brokers will be accordingly unwilling/unable to advise clients on it
- given that the Trustee role is by definition to defend our legitimate interests, he could/should be much more diligent in reporting to us.

On 9 June cc2014 posted the 'rumour' of Default and I tried to pin down the detail (#509-513), but he felt unable to go further. It seems even he had not grasped that this was already the subject of a Notice actually addressed to Bondholders !

Is all this delay/ignorance simply 'our fault'??!
- I really don't think so, though WE are the big losers for it
- Opening proper dialogue with the Trustee has been unnecessarily complicated;
- "He" (this MAY actually be Laurence Griffiths) seems remiss in his method of issuing Notices
- Wasps Finance have been silent to the point of active obstruction on many key issues (above all, failing to disclose the plan to delist in their 13 May Notice)
- Tulcangroup have been attributed responsibilities by both Trustee and Issuer Notices which Elizabeth Snow NOW suggests she simply does not recognise (!)

THESE are some of the considerations to evidence that 'fundamental covenants' to bondholders regarding both process (communications) and substance (the tradability of our bonds) have been breached;
Indeed on the crucial issue of delisting, it now seems the Trustee agrees (see #605, zzaxx9 yesterday: "we have written to the Issuer to request that they reinstate the listing")
and this is why I think bondholders have good grounds to claim some recompense in the course of the final refinancing process
- these are ideas which I previously developed #535, #557, #565 and #607
- the sums involved would surely be tiny in relation to the big picture, certainly nothing to rock the boat
- but I feel this to be justified as a matter both of principle AND of precedent (January 2018)

[l2s] 01/7/2022 22:48

According to the information provided by fastcat99 - 30 Jun '22 - 20:49 – 611, the Trustee “need not take any such steps, actions and proceedings unless (a) it shall have been so directed by an Extraordinary Resolution or so requested in writing by Bondholders holding at least one quarter in nominal amount of the Bonds outstanding, and (b) it shall have been indemnified and/or secured and/or pre-funded to its satisfaction.” And further that “At the current time, the Trustee does not intend to take any steps to enforce the terms of the Transaction Documents, the Bonds and the Coupons unless so directed and indemnified and/or secured and/or pre-funded to its satisfaction.”
On that basis and as I said in L2S - 30 Jun '22 - 10:45 – 593, “I have no reason to believe that I am being lied to”. In the meantime I will be entitled to further payments of 6.5% on my capital which I would certainly have struggled to find if the bonds had been repaid on 13 May.
So thincat1 I am firmly in the “give them until 12 August to arrange refinancing” and am quite happy that the Trustee appears to be taking the same line.

[thincat1] 01/7/2022 20:55

I am a longtime lurker here, grateful for the input of other users. I emailed Chris Hobbs at US Bank yesterday, and he referred to the statements of 17 May and 1 June as having been issued through "bond clearing systems".

The Trustee's statement says that they have discretion to issue an acceleration notice, but have decided not to. So I have asked Mr Hobbs "May I ask what is holding you back from issuing an acceleration document? I can see that this is at your discretion, but these bonds are in default and the issuer has failed to do what they were expected to do today. My understanding was that these were the circumstances which trustees exist to remedy." I have yet to receive a reply.

He also said "In terms of the de-listing of the Bonds from the London Stock Exchange, we have written to the Issuer to request that they reinstate the listing and understand that they have requested that the LSE do that."

For me, the question is whether to go on the offensive (organising to push the Trustee into action, alerting Companies House that the Wasps entities are apparently insolvent) or to give them until 12 August to arrange refinancing. What do others think?

[carmic] 01/7/2022 16:22

Thank you again fastcat99, this is very interesting. Maybe for those of us holding within an ISA the notice went to the Broker.
Can you confirm where you found this please.

[barondene] 01/7/2022 16:05

Has the Trustee posted an update since yesterday that may not have reached Bondholders?

[dandigirl] 01/7/2022 15:58

Thank you, fastcat. Where did you see these please? Thanks.

[fastcat99] 30/6/2022 20:49

and here is the conclusive Notice of 1 JUNE
(many of us have wasted breath arguing about angels on heads of pins when our brokers could/should have supplied factual info !)

NOTICE OF EVENT OF DEFAULT
WASPS FINANCE PLC (the “Issuer”)
Notice to the holders of £35,000,000 6.50 PER CENT. SECURED BONDS due 13 May 2022 (the “Bonds”) of the Issuer (ISIN: XS1221940510; Common Code: 122194051)
THIS NOTICE IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION
We, U.S. Bank Trustees Limited, in our capacity as trustee in respect of the Bonds (the “Trustee”) refer to the notice delivered by the Issuer dated 13 May 2022 whereby the Issuer notified the holders of the Bonds that the Issuer has agreed, subject to final due diligence and documentation, the terms for the refinancing of the Bonds, with a lending group including HSBC UK Bank plc (“HSBC”) as senior debt provider (the “Notice”). The Notice is available at the following link:
In a notice dated 17th May, the Trustee notified Bondholders that, in respect of the final Maturity Date falling on 13 May 2022, the Issuer had informed the Trustee that it had insufficient funds to redeem the Bonds at their nominal amount on such date in accordance with Condition 6(a) and it was not anticipated that there will be sufficient further funds available to enable the Issuer to make such payment within the applicable grace period specified in Condition 9(a) of the Terms and Conditions of the Bonds. The applicable grace period has now expired and the Issuer has notified the Trustee that this therefore constitutes an Event of Default.

Directions and Indemnity: following the occurrence of an Event of Default, the Trustee at its discretion may, and if so requested by holders of at least one quarter in nominal amount of the Bonds then outstanding or if so directed by an Extraordinary Resolution shall (subject, in each case, to its being indemnified and/or secured and/or pre-funded to its satisfaction), give notice (an “Acceleration Notice”) to the Issuer that the Bonds are, and they shall immediately become, due and payable as at such date at their nominal amount together (if applicable) with accrued interest.

At any time after the Bonds become due and payable, the Trustee may, at its discretion and without further notice, institute such proceedings or take such steps or actions against the Issuer, the Guarantors, ACL2006, or any of them, as it may think fit to enforce the terms of the Transaction Documents, the Bonds and the Coupons and, at any time after the Security has become enforceable the Trustee may, in its discretion and without further notice, take such steps, actions and proceedings as it may see fit to enforce the Security, but it need not take any such steps, actions and proceedings unless (a) it shall have been so directed by an Extraordinary Resolution or so requested in writing
by Bondholders holding at least one quarter in nominal amount of the Bonds outstanding, and (b) it shall have been indemnified and/or secured and/or pre-funded to its satisfaction.

At the current time, the Trustee does not intend to take any steps to enforce the terms of the Transaction Documents, the Bonds and the Coupons unless so directed and indemnified and/or secured and/or pre-funded to its satisfaction.

Contacts: Noteholders who have queries concerning anything mentioned in this notice may contact the Trustee along with relevant proof of their holding at:
Address: U.S. Bank Trustees Limited Fifth Floor 125 Old Broad Street London EC2N 1AR
Reference: Corporate Trust re Wasps Finance PLC
E-mail: [e-mail]

Capitalised terms used and not otherwise defined in this notice shall have the same meaning as in the prospectus dated 24 April 2015 which was issued by the Issuer in connection with the Bonds.
Notice is given by the Trustee dated 1 June 2022
U.S. BANK TRUSTEES LIMITED

[fastcat99] 30/6/2022 20:41

Here is the exact text of the Trustee's Notice of Potential Event of Default, dated 17 MAY

If you are in any doubt as to the action you should take, you are recommended to seek your own advice immediately from your stockbroker, bank manager, solicitor, accountant or other financial adviser authorised under the Financial Services and Markets Act 2000 (if you are in the United Kingdom), or from another appropriately authorised independent financial adviser.
NOTICE OF POTENTIAL EVENT OF DEFAULT WASPS HOLDING PLC (the “Issuer”) Notice to the holders of £35,000,000 6.50 PER CENT. SECURED BONDS due 13 May 2022 (the “Bonds”) of the Issuer (ISIN: XS1221940510; Common Code: 122194051)
THIS NOTICE IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION
We, U.S. Bank Trustees Limited, in our capacity as trustee in respect of the Bonds (the “Trustee”) refer to the notice delivered by the Issuer dated 13 May 2022 whereby the Issuer notified the holders of the Bonds that the Issuer has agreed, subject to final due diligence and documentation, the terms for the refinancing of the Bonds, with a lending group including HSBC UK Bank plc (“HSBC”) as senior debt provider (the “Notice”). The Notice is available at the following link:
We hereby notify you that, in respect of the final Maturity Date falling on 13 May 2022, the Issuer has informed the Trustee that it had insufficient funds to redeem the Bonds at their nominal amount on such date in accordance with Condition 6(a) and it is not anticipated that there will be sufficient further funds available to enable the Issuer to make such payment within the applicable grace period specified in Condition 9(a) of the Terms and Conditions of the Bonds. The Issuer has notified the Trustee that this therefore constitutes a Potential Event of Default.
Capitalised terms used and not otherwise defined in this notice shall have the same meaning as in the prospectus dated 24 April 2015 which was issued by the Issuer in connection with the Bonds.
Notice is given by the Trustee dated 17 May 2022 U.S. BANK TRUSTEES LIMITED
Pursuant to the Notice, enquiries may be addressed to the Issuer as follows: Elizabeth Snow [e-mail]

[zzaxx99] 30/6/2022 20:05

@ fastcat

It was the first email address I posted a couple of messages above (#599)

[fastcat99] 30/6/2022 19:48

I am also in correspondence with Daily Telegraph Questor, and of course Simon Gilbert, - but once we have opened a direct channel with the Trustee, that should be our first port of call
- as dandigirl himself recommended on.... 21 August 2020 !!
- My instincts are 'to play the system' in order to defend our rights to the maximum, absolutely NOT to bring the whole edifice down (which may or may not be the real agenda of some CCFC folk)

PS minor pedantic correction to my own post #602: it was Elizabeth Snow, not Stone (but don't bother anyway - although her 13 May signature was not qualified by "MEDIA enquiries", they have closed that door, so Tulchangroup are now an official waste of time!)

[fastcat99] 30/6/2022 19:19

Great news @zzaxx99
- especially the last point, which is really substantive progress (or regress, however you look at it - a risky "Buying opportunity emerging" :) )
- can you state the email address which the Trustee used when replying to you, who there (he/she/it) acts as trustee, and indeed anything else which you have gleaned about how US Bank Trust exercises this function ?
- I have just sent a rather ponderous email along just those lines to the three email addresses which you quoted earlier;
- once I hear they are in listening mode, I want to develop all arguments regarding how the Issuer has transgressed the acceptable limit in its dealings with bondholders; the delisting was probably the worst such transgression, but there are others.
- this is what I meant by "all breakages must be paid for" #557/565 above