TIDM44KM
RNS Number : 6594J
BOS (Shared Appreciation Mrtg) No.2
25 August 2021
NOTICE OF NOTEHOLDER MEETING
THIS NOTICE IS IMPORTANT AND REQUIRES THE IMMEDIATE ATTENTION OF
NOTEHOLDERS.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO, OR TO
ANY PERSON LOCATED OR RESIDENT IN, THE UNITED STATES OF AMERICA OR
ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO RELEASE, PUBLISH OR
DISTRIBUTE THIS NOTICE.
If Noteholders are in any doubt about any aspect of the
proposals in this notice and/or the action they should take, they
are recommended to seek their own financial advice immediately from
their stockbroker, bank manager, solicitor, accountant or other
financial adviser authorised under the Financial Services and
Markets Act 2000 (if they are in the United Kingdom) or from
another appropriately authorised independent financial adviser and
such other professional advisor from their own professional
advisors as they deem necessary.
FURTHER INFORMATION REGARDING THE MATTERS REFERRED TO IN THIS
NOTICE IS AVAILABLE IN THE CONSENT SOLICITATION MEMORANDUM (THE
CONSENT SOLICITATION MEMORANDUM) ISSUED BY THE ISSUER TODAY, AND
ELIGIBLE NOTEHOLDERS (AS DEFINED BELOW) ARE ENCOURAGED TO READ THIS
NOTICE IN CONJUNCTION WITH THE SAME.
BOS (SHARED APPRECIATION MORTGAGES) NO. 2 PLC
(incorporated with limited liability in England and Wales with
registered number 03149607)
(the Issuer)
NOTICE OF NOTEHOLDER MEETING
to the holders of the
GBP105,600,000 Asset Backed Notes due August 2072 (ISIN:
XS0078634200)
(the Notes, and the holders thereof, the Noteholders) of the
Issuer presently outstanding.
NOTICE IS HEREBY GIVEN that a meeting (the Meeting) of the
Noteholders convened by the Issuer will be held via videoconference
on 23 September 2021 for the purpose of considering and, if thought
fit, passing the applicable resolution set out below which will be
proposed as an Extraordinary Resolution in accordance with the
provisions of the Trust Deed dated 25 July 1997 as amended,
restated, modified and/or supplemented from time to time (the Trust
Deed) made between the Issuer and Chase Manhattan Trustees Limited
as trustee for the Noteholders and constituting the Notes.
The Meeting will commence at 10.20 a.m. (London time) (11.20
a.m. (CET)).
Capitalised terms used in this notice (the Notice) and not
otherwise defined herein shall have the meanings given to them in
the Consent Solicitation Memorandum dated 25 August 2021 (the
Consent Solicitation Memorandum), which is available for inspection
by Eligible Noteholders (as defined below) during normal business
hours at the specified offices of the Principal Paying Agent on any
weekday (public holidays excepted) and on the following website
https://deals.lucid-is.com/sams (the Website) up to and including
the date of the Meeting (see "Documents Available for Inspection"
below). In accordance with normal practice, the Trustee, the
Tabulation Agent and the Principal Paying Agent have not been
involved in the formulation of the Noteholder Proposals outlined in
the Consent Solicitation Memorandum or the Extraordinary
Resolution. The Trustee, the Tabulation Agent, the Solicitation
Agent and the Principal Paying Agent express no opinion on, and
make no representations as to the merits of, the Noteholder
Proposal set out in the Consent Solicitation Memorandum, the
Amendment Documents, the Extraordinary Resolution or the proposed
amendments referred to in the Extraordinary Resolution set out
below.
None of the Trustee, the Tabulation Agent, the Solicitation
Agent or the Principal Paying Agent makes any representation that
all relevant information has been disclosed to Noteholders in or
pursuant to this Notice, the Consent Solicitation Memorandum or
otherwise. None of the Trustee, the Tabulation Agent, the
Solicitation Agent or the Principal Paying Agent has approved the
draft Amendment Documents referred to in the Extraordinary
Resolution set out below and the Trustee recommends that
Noteholders arrange to inspect and review such draft Amendment
Documents as provided below in this Notice. Accordingly,
Noteholders should take their own independent legal, financial,
tax, regulatory or other advice on the merits and the consequences
of voting in favour of the Extraordinary Resolution, including any
tax consequences, and on the impact of the implementation of the
Extraordinary Resolution.
None of the Trustee, the Tabulation Agent, the Solicitation
Agent or the Principal Paying Agent are responsible for the
accuracy, completeness, validity or correctness of the statements
made in the Consent Solicitation Memorandum or omissions therefrom
or for the acts or omissions of the Issuer, or any other person in
connection with the Consent Solicitation.
In particular, Bank of Scotland plc assumes no responsibility
for the information contained in the Consent Solicitation
Memorandum and expresses no opinion on, and makes no
representations as to the merits of, the Noteholder Proposal
outlined in the Consent Solicitation Memorandum or the
Extraordinary Resolution. No liability whatsoever in respect of the
Consent Solicitation Memorandum, the Noteholder Proposal, the
Extraordinary Resolution or the Notes is accepted by Bank of
Scotland plc or any company in the same group of companies as Bank
of Scotland plc (other than the Issuer).
Neither this Notice nor the Consent Solicitation Memorandum
constitute or form part of, and should not be construed as, an
offer for sale, exchange or subscription of, or a solicitation of
any offer to buy, exchange or subscribe for, any securities of the
Issuer or any other entity. The distribution of the Consent
Solicitation Memorandum may nonetheless be restricted by law in
certain jurisdictions. Persons into whose possession the Consent
Solicitation Memorandum comes are required to inform themselves
about, and to observe, any such restrictions.
Background
The UK Financial Conduct Authority (FCA) announced on 5 March
2021 (the 5 March Announcement) that all LIBOR settings will either
cease to be provided by any administrator or no longer be
representative of the underlying market and economic reality (and
that representativeness will not be restored) immediately after (i)
31 December 2021, in the case of all sterling, euro, Japanese Yen
and Swiss Franc, and certain U.S. dollar settings, or (ii) 30 June
2023, in the case of the remaining U.S. dollar settings.
In addition, the Bank of England and the FCA announced that it
has mandated a working group to promote 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.
There is now certainty that LIBOR in its current form will cease
at the end of 2021. Regulators have urged market participants to
take active steps to implement the transition to risk-free rates
ahead of this deadline.
Further, the Trustee has informed the Issuer that, as a result
of the EU Benchmarks Regulation (EU 596/2014) (the BMR) imposing
certain obligations on market participants which are considered
benchmark "users", legacy rate calculation provisions (in
particular involving Trustee discretions and/or approvals) in
affected transactions, which could create liability exposure for
service providers which is not commensurate with their commercial
position, have been widely re-examined.
On the basis that:
(a) certain elements used for calculations for the Notes
reference sterling LIBOR, for which the cessation date of such
settings has now been announced by the FCA to occur as at 31
December 2021;
(b) the Maturity Date (being the Interest Payment Date falling
in August 2072) of the Notes occurs after the cessation date for
sterling LIBOR rates; and
(c) the Trustee has requested that the Issuer remove certain
Trustee approvals and discretions in the Conditions and the Trust
Deed as, in common with changing regulatory practice and the
position of the market, it is no longer able to perform any duties
under or in connection with rate calculation provisions, whether
discretionary or mandatory,
the Issuer has convened the Meeting for the purpose of enabling
the Noteholders to consider and resolve, if they think fit, to
approve the Noteholder Proposal (as further described below) by way
of an Extraordinary Resolution in relation to the Notes (i) to
convert the existing interest basis specified in the Conditions and
the Transaction Documents as applicable to calculations for certain
amounts payable under the Notes from sterling LIBOR to SONIA and
(ii) to implement amendments to the Conditions and the Trust Deed
to remove certain Trustee approvals and discretions and to update
the notice and meeting provisions in each case to reflect current
practices.
Noteholder Proposal
Pursuant to the above, the Issuer has convened the Meeting by
the above notice to request that Noteholders consider and agree by
Extraordinary Resolution to the matters contained in the
Extraordinary Resolution set out below.
The Issuer, under the Noteholder Proposal (as defined below), is
requesting that the Noteholders consider and, if thought fit,
approve the Extraordinary Resolution. If approved by the
Noteholders, the Extraordinary Resolution will be binding on all
Noteholders, including those Noteholders who do not vote in favour
of the Extraordinary Resolution or who do not vote in connection
with the Extraordinary Resolution.
In order to convert the existing interest basis specified in the
Conditions and the Transaction Documents as applicable to
calculations for certain amounts payable under the Notes from
sterling LIBOR to the SONIA Rate (as defined below):
(a) the interest basis for the calculation of:
(i) default interest in accordance with the Conditions and the terms of the Trust Deed;
(ii) the Funding Element in accordance with the terms of the
Mortgage Portfolio Agreement; and
(iii) the Equity Compensation Amount in accordance with the Conditions;
will be Compounded Daily SONIA for the relevant period (the
SONIA Rate). The detailed provisions relating to the calculation of
the SONIA Rate are set out in Annex A to this Notice.
(b) The applicable margin will be the sum of any existing margin
already applicable to the relevant payments under the Transaction
Documents (if any) and, in each case, the relevant Adjustment
Spread. The detailed provisions relating to the determination of
the Adjustment Spreads are set out in Annex B to this Notice.
It is also proposed that the Conditions and the Trust Deed will
be amended in order to:
(a) remove (i) the requirement for Trustee approval of (A) LIBOR
determined by the Reference Agent where no screen rate is
available, (B) the appointment of replacement Reference Agents and
Reference Banks, and (C) any alterations, or any successor indices,
to the Halifax Regional Indices (as defined in the Conditions) and
(ii) the discretion of the Trustee to calculate the relevant rate
or amount on the failure of the Issuer or the Reference Agent (as
applicable) to do so; and
(b) update the notice and meeting provisions: (i) to provide for
Notices in relation to the Notes delivered via the Clearing Systems
to be deemed given to Noteholders on the same day on which such
Notice was delivered to the Clearing Systems; (ii) to ensure
consistency between the Conditions and the provisions for meetings
of Noteholders set out in Schedule 4 of the Trust Deed and (iii) to
reflect provisions for (A) virtual Noteholder meetings being held,
(Bi) electronic consent provisions, and (C) written resolutions to
be approved by the same majority as an Extraordinary Resolution,
rather than 100% approval being required,
in each case to reflect current practices.
The Extraordinary Resolution, if passed, constitutes (amongst
others) a direction by the Noteholders to the Trustee to consent to
and to concur in the amendments to the Conditions, the relevant
Transaction Documents to implement relevant changes (i) to convert
the existing interest basis specified in the Conditions and the
Transaction Documents as applicable to calculations for certain
amounts payable under the Notes from sterling LIBOR to SONIA and
(ii) to remove certain Trustee approvals and discretions and to
update the notice and meeting provisions in each case to reflect
current practices, as more fully set out in the Amendment Documents
and as may be necessary to give effect thereto, the Noteholder
Proposal).
The Noteholder Proposal is being put to Noteholders for the
reasons set out in the Consent Solicitation Memorandum.
Noteholders are referred to the Consent Solicitation Memorandum
which provides further background to the Noteholder Proposal and
the reasons therefor.
Consent Solicitation
Noteholders are further given notice that the Issuer has invited
holders of the Notes (such invitation a Consent Solicitation) to
consent to the approval, by Extraordinary Resolution at the
Meeting, of the modification of the Conditions relating to the
Notes as described in paragraph 1 of the Extraordinary Resolution
as set out below, all as further described in the Consent
Solicitation Memorandum (as defined in paragraph 10 of the
Extraordinary Resolution set out below).
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 (i) located
and resident outside the United States and who are not U.S. persons
(as defined in Regulation S under the Securities Act) or acting for
the account or benefit of any U.S. person, (ii) eligible
counterparties (as defined in COBS), or professional clients (as
defined in UK MiFIR) and, if applicable and acting on a
non-discretionary basis, who are acting on behalf of a beneficial
owner that is also an eligible counterparty or a professional
client, in each case in respect of the Notes and (iii) otherwise a
person to whom the Consent Solicitation can be lawfully made and
that may lawfully participate in the Consent Solicitation (all such
persons Eligible Noteholders).
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. In order to receive a
copy of the Consent Solicitation Memorandum, a Noteholder will be
required to provide confirmation as to his or her status as an
Eligible Noteholder.
EXTRAORDINARY RESOLUTION
IN RESPECT OF THE GBP105,600,000 ASSET Backed Notes due August
2072
"THAT this Meeting of the holders (together, the Noteholders) of
the GBP105,600,000 Asset Backed Notes due August 2072 (the Notes)
of BOS (Shared Appreciation Mortgages) No. 2 Plc (the Issuer),
constituted by the trust deed dated 25 July 1997 as amended,
restated, modified and/or supplemented from time to time (the Trust
Deed) made between the Issuer and Chase Manhattan Trustees Limited
as trustee for, inter alios, the Noteholders:
1. (subject to paragraph 9 of this Extraordinary Resolution)
assents to the modification of:
(a) the terms and conditions of the Notes (the Conditions), as
set out in Schedule 3 to the Trust Deed, as may from time to time
be modified or amended and restated in accordance with the Trust
Deed, in order that the existing interest basis specified therein
as being applicable to calculations for certain amounts payable
under the Notes is converted from sterling LIBOR to the SONIA Rate
for the relevant period, on the Interest Payment Date falling in
November 2021 (the Transition Date) as more fully set out in the
Supplemental Trust Deed (as defined in paragraph 2 below);
(b) certain terms of the Trust Deed, as set out in the
Supplemental Trust Deed (as defined in paragraph 2 below) in order
to include the method of calculation of the SONIA Rate and other
consequential changes to the terms of the Trust Deed;
(c) certain terms of the Paying Agency Agreement, Mortgage
Portfolio Agreement, Master Definitions Schedule and the Options
Agreement (each as defined in the Transaction Documents) as more
fully set out in the Deed of Amendment and Restatement and the ISDA
Amendment Agreement (each as defined in paragraph 2below); and
(d) the Trust Deed and the Conditions, as set out in the
Supplemental Trust Deed (as defined in paragraph 2 below) in order
to remove certain Trustee approvals and discretions and to update
the notice and meeting provisions, in each case to reflect current
practices;
2. (subject to paragraph 9 of this Extraordinary Resolution)
authorises, directs, requests and empowers:
(a) (i) the Issuer, the Trustee and BNYM (as defined in
paragraph 10 below) to execute a deed supplemental to the Trust
Deed which annexes the form of the Conditions (the Supplemental
Trust Deed);
(ii) the Issuer, the Trustee, BNYM, the Principal Paying Agent,
the Reference Agent, Bank of Scotland plc and UBS AG, London Branch
to execute a deed of amendment and restatement amending and
restating the Mortgage Portfolio Agreement, the Paying Agency
Agreement and the Master Definitions Schedule (the Deed of
Amendment and Restatement);
(iii) the Issuer, the Trustee, BNYM and UBS AG, London Branch to
execute an ISDA amendment agreement amending the Options Agreement
(the ISDA Amendment Agreement, together with the Supplemental Trust
Deed and the Deed of Amendment and Restatement, the Amendment
Documents and each an Amendment Document),
in each case to effect the modifications referred to in
paragraph 1 of this Extraordinary Resolution, in the form or
substantially in the form of the drafts produced to this Meeting
and for the purpose of identification signed by the chairman
thereof, with such amendments thereto (if any) as the Trustee shall
require or agree to; and
(b) each of the Issuer and the Trustee to execute and to do all
such 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 paragraph 1 of this Extraordinary
Resolution;
3. discharges and exonerates the Trustee from all liability for
which it may have become or may become responsible under the Trust
Deed, the Notes, the Conditions or any Transaction Document or any
document related thereto in respect of any act or omission in
connection with the passing of this Extraordinary Resolution or its
implementation, the modifications referred to in paragraph 1 of
this Extraordinary Resolution or the implementation of those
modifications, the executing of the Amendment Documents and any
deeds, agreements, documents or instructions or the performance of
any acts, matters or things to be done to carry out and give effect
to the matters contemplated in the Amendment Documents, the Notice
or this Extraordinary Resolution;
4. irrevocably waives any claim that the Noteholders may have
against the Trustee arising as a result of any loss or damage which
the Noteholders may suffer or incur as a result of the Trustee
acting upon this Extraordinary Resolution (including but not
limited to circumstances where it is subsequently found that this
Extraordinary Resolution is not valid or binding on the holders)
and the Noteholders further confirm that the Noteholders will not
seek to hold the Trustee liable for any such loss or damage;
5. expressly agrees and undertakes to indemnify and hold
harmless the Trustee from and against all losses, liabilities,
damages, costs, charges and expenses which may be suffered or
incurred by them as a result of any claims (whether or not
successful, compromised or settled), actions, demands or
proceedings brought against the Trustee and against all losses,
costs, charges or expenses (including legal fees) which the Trustee
may suffer or incur which in any case arise as a result of the
Trustee acting in accordance with the Extraordinary Resolution and
the Trust Deed;
6. (subject to paragraph 9 of this Extraordinary Resolution)
sanctions and assents to every abrogation, modification, compromise
or arrangement in respect of the rights of the Noteholders
appertaining to the Notes against the Issuer, whether or not such
rights arise under the Conditions, the Notes, the Trust Deed or any
other Transaction Documents involved in, resulting from or to be
effected by the amendments referred to in paragraph 1 of this
Extraordinary Resolution and their implementation;
7. waives any and all requirements, restrictions and conditions
precedent set forth in the Transaction Documents on any person, in
implementing the Amendment Documents, this Extraordinary Resolution
and the Noteholder Proposal;
8. discharges and exonerates the Issuer from all liability for
which it may have become or may become responsible under the Trust
Deed, the Notes or any Transaction Document or any document related
thereto in respect of any act or omission in connection with the
passing of this Extraordinary Resolution or the executing of any
deeds, agreements, documents or instructions, the performance of
any acts, matters or things to be done to carry out and give effect
to the matters contemplated in the Amendment Documents, the Notice
or this Extraordinary Resolution;
9. declares that the implementation of this Extraordinary
Resolution shall be conditional on:
(a) the passing of this Extraordinary Resolution; and
(b) 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, in the event that the Extraordinary
Resolution is passed at this Meeting but such condition is not
satisfied, the chairman of this Meeting is hereby authorised,
directed, requested and empowered to adjourn this Meeting for such
period being not less than 14 clear days nor more than 42 clear
days, and shall be held via videoconference at such time as may be
appointed by the chairman of this Meeting and approved by the
Trustee, for the purpose of reconsidering resolutions 1 to 12 of
this Extraordinary Resolution with the exception of resolution 9(b)
of this Extraordinary Resolution. At any such adjournment of this
Meeting, two or more persons present holding Definitive Notes or
voting certificates or being proxies or representatives and holding
or representing in aggregate not less than 25 per cent. of the
aggregate Principal Amount Outstanding of the Notes then
outstanding shall form a quorum and shall have the power to pass
such Extraordinary Resolution, and this condition set out in this
paragraph 9(b) 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;
10. acknowledges that the following terms, as used in this
Extraordinary Resolution, shall have the meanings given below:
Consent Solicitation means the invitation by the Issuer to all
Eligible Noteholders to consent to the modification of the
Conditions relating to the Notes 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 25 August 2021 prepared by the Issuer in relation
to the Consent Solicitation;
Eligible Noteholder means each Noteholder who is (a) located and
resident outside the United States and not a U.S. person (as
defined in Regulation S under the Securities Act), (b) an eligible
counterparty (as defined in COBS), or a professional client (as
defined in UK MiFIR) and, if applicable and acting on a
non-discretionary basis, 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 Notes and (c) otherwise a
person to whom the Consent Solicitation can be lawfully made and
that may lawfully participate in the Consent Solicitation;
Ineligible Noteholder means each Noteholder who is not a person
to whom the Consent Solicitation is being made, on the basis that
such Noteholder is either (i) a U.S. person and/or located or
resident in the United States and/or (ii) not an eligible
counterparty (as defined in COBS), or a professional client (as
defined in UK MiFIR), and, if applicable and acting on a
non-discretionary basis, who is not acting on behalf of a
beneficial owner that is also an eligible counterparty or a
professional client and/or (iii) a person to whom the Consent
Solicitation cannot otherwise be lawfully made;
Securities Act means the U.S. Securities Act of 1933, as
amended; and
Trustee means BNY Mellon Corporate Trustee Services Limited (as
successor in business to J.P. Morgan Trustee and Depositary Company
Limited, formerly known as Chase Manhattan Trustees Limited), or
should The Bank of New York Mellon, London Branch (BNYM) at any
time be determined as being the trustee for the time being under
the Trust Deed, The Bank of New York Mellon, London Branch;
11. agrees that capitalised terms in this document where not
defined herein shall have the meanings given to them in the Consent
Solicitation Memorandum (a copy of which is available for
inspection as referred to in the Notice); and
12. approves that the Trustee be and 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 Documents, or the due execution and delivery thereof
by any party thereto or the validity or enforceability thereof and
that it shall not be liable to any Noteholder for any consequences
resulting from following this instruction."
Ineligible Noteholders
Submission of Ineligible Holder Instructions
In respect of any Notes held through Euroclear Bank SA/NV
(Euroclear) or Clearstream Banking, S.A. (Clearstream, Luxembourg),
the submission of Ineligible Holder Instructions will be deemed to
have occurred upon receipt by the Tabulation Agent from Euroclear
or Clearstream, Luxembourg, as applicable, of a valid instruction
(an Ineligible Holder Instruction) submitted in accordance with the
requirements of Euroclear or Clearstream, Luxembourg, as
applicable. Each such Ineligible Holder Instruction must specify,
among other things, the aggregate principal amount of the Notes to
which such Ineligible Holder Instruction relates, the securities
account number at Euroclear or Clearstream, Luxembourg, as
applicable, in which the relevant Notes are held and whether the
Ineligible Noteholder wishes to instruct the Principal Paying Agent
to appoint two or more representatives of the Tabulation Agent to
attend (via videoconference) the Meeting (and any adjourned such
Meeting) and vote in favour of or against the Extraordinary
Resolution. The receipt of such Ineligible Holder Instruction by
Euroclear or Clearstream, Luxembourg, as applicable, will be
acknowledged in accordance with the standard practices of Euroclear
or Clearstream, Luxembourg, as applicable, and will result in the
blocking of the relevant Notes in the relevant Ineligible
Noteholder's account with Euroclear or Clearstream, Luxembourg, as
applicable, so that no transfers may be effected in relation to
such Notes until the earlier of (i) the date on which the relevant
Ineligible Holder Instruction is validly revoked (including their
automatic revocation on the termination of the Consent
Solicitation) and (ii) the conclusion of the Meeting (or, if
applicable, any adjourned such Meeting).
Only Accountholders may submit Ineligible Holder Instructions.
Each beneficial owner of Notes who is an Ineligible Noteholder and
is not an Accountholder, must arrange for the Accountholder through
which such beneficial owner of Notes who is an Ineligible
Noteholder holds its Notes to submit an Ineligible Holder
Instruction on its behalf to Euroclear or Clearstream, Luxembourg,
as applicable, before the deadlines specified by the relevant
clearing system.
By delivering, or arranging for the delivery on its behalf, of
an Ineligible Holder Instruction in accordance with the procedures
described below, a Noteholder shall be deemed to agree, undertake,
acknowledge and represent to the Issuer, the Tabulation Agent and
the Solicitation Agent that at (i) the time of submission of such
Ineligible Holder Instruction; (ii) the Expiration Deadline; (iii)
the time of the Meeting and at the time of any adjourned Meeting;
and (iv) the Effective Date (and if a Noteholder is unable to make
any such acknowledgement or give any such representation or
warranty, such Noteholder or Accountholder should contact the
Tabulation Agent immediately):
(a) It is an Ineligible Noteholder.
(b) It is not a person or entity (a Person) (A) that is, or is
directly or indirectly owned or controlled by a Person that is,
described or designated in (i) the most current "Specially
Designated Nationals and Blocked Persons" list (which as of the
date hereof can be found at:
https://www.treasury.gov/ofac/downloads/sdnlist.pdf) or (ii) the
Foreign Sanctions Evaders List (which as of the date hereof can be
found at: http://www.treasury.gov/ofac/downloads/fse/fselist.pdf)
or (iii) the most current "Consolidated list of persons, groups and
entities subject to EU financial sanctions" (which as of the date
hereof can be found at:
https://eeas.europa.eu/headquarters/headquarters-homepage_en/8442/Consolidated%20list%20of%20sanctions);
or (B) that is otherwise the subject of any sanctions administered
or enforced by any Sanctions Authority, other than solely by virtue
of their inclusion in: (i) the most current "Sectoral Sanctions
Identifications" list (which as of the date hereof can be found at:
https://www.treasury.gov/ofac/downloads/ssi/ssilist.pdf) (the SSI
List), (ii) Annexes 3, 4, 5 and 6 of Council Regulation No.
833/2014, as amended from time to time including by Council
Regulation No. 960/2014 and Council Regulation (EU) No 1290/2014
and Council Regulation (EU) No 2015/1797 (the EU Annexes), or (iii)
any other list maintained by a Sanctions Authority, with similar
effect to the SSI List or the EU Annexes. For these purposes
Sanctions Authority means each of: (i) the United States
government; (ii) the United Nations; (iii) the European Union (or
any of its member states) or the United Kingdom; (iv) any other
equivalent governmental or regulatory authority, institution or
agency which administers economic, financial or trade sanctions;
and (v) the respective governmental institutions and agencies of
any of the foregoing including, without limitation, the Office of
Foreign Assets Control of the US Department of the Treasury, the
United States Department of State, the United States Department of
Commerce and Her Majesty's Treasury.
This representation shall not be sought or given at any time
after such representation is first made if and to the extent that
it is or would be unenforceable by reason of breach of (i) any
provision of Council Regulation (EC) No 2271/1996 of 22 November
1996 (the EU Blocking Regulation) (or any law or regulation
implementing the EU Blocking Regulation in any member state of the
European Union), (ii) any provision of the EU Blocking Regulation
as it forms part of domestic law of the United Kingdom by virtue of
the EUWA and any secondary legislation made under it, or (iii) any
similar blocking or anti-boycott law in the European Union or the
United Kingdom.
(c) It is assuming all the risks inherent in participating in
the Consent Solicitation and has undertaken all the appropriate
analyses of the implications of the Consent Solicitation without
reliance on the Issuer, the Trustee, the Principal Paying Agent,
the Solicitation Agent or the Tabulation Agent.
(d) It has observed the laws of all relevant jurisdictions,
obtained all requisite governmental, exchange control or other
required consents, complied with all requisite formalities and paid
any issue, transfer or other taxes or requisite payments due from
it in each respect in connection with any vote in relation to the
Extraordinary Resolution, in any jurisdiction and that it has not
taken or omitted to take any action in breach of the
representations or which will or may result in the Issuer, the
Trustee, the Solicitation Agent, the Tabulation Agent or any other
person acting in breach of the legal or regulatory requirements of
any such jurisdiction in connection with any votes in relation to
the Extraordinary Resolution.
(e) It has full power and authority to vote in the Meeting (or any such adjourned Meeting).
(f) Each Ineligible Holder Instruction is made on the terms and
conditions set out in this notice and therein.
(g) Each Ineligible Holder Instruction is being submitted in
compliance with the applicable laws or regulations of the
jurisdiction in which the Noteholder is located or in which it is
resident or located and no registration, approval or filing with
any regulatory authority of such jurisdiction is required in
connection with each such Ineligible Holder Instruction.
(h) It holds and will hold, until the earlier of (i) the date on
which its Ineligible Holder Instruction is validly revoked, in
accordance with the terms of the Consent Solicitation and (ii)
conclusion of the Meeting or (if applicable) any adjourned Meeting,
as the case may be, the Notes the subject of the Ineligible Holder
Instruction, in the relevant Clearing System and, if it holds its
Notes through Euroclear, or Clearstream in accordance with the
requirements of the relevant Clearing System and by the deadline
required by the relevant Clearing System, it has submitted, or has
caused to be submitted, an Ineligible Holder Instruction to the
relevant Clearing System, as the case may be, to authorise the
blocking of such Notes with effect on and from the date thereof so
that no transfers of such Notes may be effected until the
occurrence of any of the events listed in (i) or (ii) above.
(i) It acknowledges that none of the Issuer, the Trustee, the
Solicitation Agent, the Tabulation Agent and/or the Principal
Paying Agent or any of their respective affiliates, directors,
officers, employees or agents has made any recommendation as to
whether to vote on the Extraordinary Resolution and it represents
that it has made its own decision with regard to voting on the
Extraordinary Resolution based on any independent legal, financial,
tax, regulatory or other advice that it has deemed necessary to
seek.
(j) It acknowledges that all authority conferred or agreed to be
conferred pursuant to these acknowledgements, representations,
warranties and undertakings and every obligation of the Noteholder
offering to vote on the Extraordinary Resolution shall to the
extent permitted by applicable law be binding upon the successors,
assigns, heirs, executors, trustees in bankruptcy and legal
representatives of the Noteholder voting on the Extraordinary
Resolution and shall not be affected by, and shall survive, the
death or incapacity of the Noteholder voting on the Extraordinary
Resolution, as the case may be.
(k) The Notes have not been and will not be registered under the
Securities Act, or the securities laws of any state or other
jurisdiction of the United States, and may not be offered or sold
in the United States or to, or for the account or benefit of, U.S.
persons, unless an exemption from the registration requirements of
the Securities Act is available (terms used in this paragraph that
are, unless otherwise specified, defined in Regulation S are used
as defined in Regulation S).
(l) None of the Issuer, the Solicitation Agent, the Tabulation
Agent, the Principal Paying Agent or the Trustee or any of their
respective directors, officers, employees, agents or affiliates has
given (directly or indirectly through any other person) any
assurance, guarantee, or representation whatsoever as to the
expected or projected success, profitability, return, performance,
result, effect, consequence or benefit (including legal,
regulatory, tax, financial, accounting or otherwise) of the Consent
Solicitation.
(m) None of the Issuer, the Trustee, the Principal Paying Agent,
the Solicitation Agent or the Tabulation Agent is acting as a
fiduciary or financial or investment adviser for it.
(n) The terms and conditions of the Consent Solicitation shall
be deemed to be incorporated in, and form a part of, the Ineligible
Holder Instruction which shall be read and construed accordingly
and that the information given by or on behalf of such Noteholder
in the Ineligible Holder Instruction is true and will be true in
all respects at the time of the Meeting (or any adjourned
Meeting).
(o) No information has been provided to it by the Issuer, the
Trustee, the Solicitation Agent or the Tabulation Agent, or any of
their respective directors or employees or affiliates, with regard
to the tax, regulatory or other consequences for Noteholders
arising from the participation in the Consent Solicitation, the
implementation of any Extraordinary Resolution, and it acknowledges
that it is solely liable for any taxes and similar or related
payments imposed on it under the laws of any applicable
jurisdiction as a result of its participation in the Consent
Solicitation, and agrees that it will not and does not have any
right of recourse (whether by way of reimbursement, indemnity or
otherwise) against the Issuer, the Trustee, the Solicitation Agent
or the Tabulation Agent, or any of their respective directors or
employees, or any other person in respect of such taxes and
payments.
If the relevant Ineligible Noteholder is unable to give any of
the representations and warranties described above, such Ineligible
Noteholder should contact the Tabulation Agent.
Each Ineligible Noteholder submitting an Ineligible Holder
Instruction in accordance with its terms shall be deemed to have
agreed to indemnify the Issuer, the Solicitation Agent, the
Tabulation Agent, the Principal Paying Agent, the Trustee and any
of their respective affiliates, directors, officers, employees or
agents against all and any losses, costs, fees, claims,
liabilities, expenses, charges, actions or demands which any of
them may incur or which may be made against any of them as a result
of any breach of any of the terms of, or any of the
representations, warranties and/or undertakings given pursuant to,
such vote by such Noteholder.
REQUIREMENTS OF U.S. SECURITIES LAWS
If the Extraordinary Resolution is passed and implemented in
respect of the Notes, until the expiry of the period of 40 days
after the date of the Supplemental Trust Deed, offers or sales of
the Notes may not be made in the United States or to U.S. persons
unless made outside the United States pursuant to Rules 903 and 904
of Regulation S.
Noteholders who have submitted and not revoked a valid Consent
Instruction or Ineligible Holder Instruction in respect of the
Extraordinary Resolution by 4 p.m. (London time) (5 p.m. (CET)) on
20 September 2021 (the Expiration Deadline), by which they will
have given instructions for the appointment of two or more
representatives of the Tabulation Agent by the Principal Paying
Agent as their proxy to vote in favour of or against (as specified
in the relevant Consent Instruction or Ineligible Holder
Instruction) the Extraordinary Resolution at the Meeting (or any
adjourned such Meeting), need take no further action to be
represented at the Meeting (or any such adjourned such
Meeting).
General Information
The attention of Noteholders is particularly drawn to the quorum
required for the Noteholders' Meeting and for any adjourned Meeting
which is set out in paragraphs 1 , 2 , 3 , 4 and 5 of " Voting and
Quorum " below. Having regard to such requirements, Noteholders are
strongly urged either to attend (via videoconference) the Meeting
or to take steps to be represented at the Meeting, as referred to
below, as soon as possible.
Voting and Quorum
1. The provisions governing the convening and holding of the
Meeting are set out in Schedule 4 (Provisions for Meetings of
Noteholders) to the Trust Deed, a copy of which is available for
inspection by the Noteholders during normal business hours at the
specified offices of the Principal Paying Agent on any weekday
(public holidays excepted) and on the Website up to and including
the date of the Meeting and at the Meeting.
All of the Notes are represented by a global Note and are held
by a common depositary for Euroclear Bank SA/NV (Euroclear) and
Clearstream Banking, S.A. (Clearstream, Luxembourg). For the
purpose of the Meeting, a Noteholder shall mean each person who is
for the time being shown in the records of Euroclear or
Clearstream, Luxembourg as the holder of a particular Principal
Amount Outstanding of the Notes.
Any Noteholder who indicates that they wish to participate in
the videoconference for the Meeting in person (rather than being
represented by the Tabulation Agent) will be provided with further
details about attending the Meeting. A Noteholder wishing to attend
(via videoconference) the Meeting must provide the Tabulation Agent
with a valid voting certificate issued by the Principal Paying
Agent relating to the Note(s) in respect of which it wishes to
vote.
Any Noteholder who wishes to vote in respect of the
Extraordinary Resolution but does not wish to attend (via
videoconference) the Meeting should: (i) in the case of a
beneficial owner whose Notes are held in book--entry form by a
custodian, request such beneficial owner's custodian to vote on the
Extraordinary Resolution in accordance with the procedures set out
in Section 4 "Procedures in connection with the Consent
Solicitation" of the Consent Solicitation Memorandum, or (ii) in
the case of a Noteholder whose Notes are held in book--entry form
directly in the relevant Clearing System, vote on the Extraordinary
Resolution in accordance with the procedures set out in Section 4
"Procedures in connection with the Consent Solicitation" of the
Consent Solicitation Memorandum.
Noteholders should note that the timings and procedures set out
below reflect the requirements for Noteholders' Meetings set out in
the Trust Deed, but that the Clearing Systems and the relevant
intermediaries may have their own additional requirements as to
timings and procedures for voting on the Extraordinary Resolution.
Accordingly, Noteholders wishing to vote in respect of the
Extraordinary Resolution are strongly urged either to contact their
custodian (in the case of a beneficial owner whose Notes are held
in book--entry form by a custodian) or the relevant Clearing System
(in the case of a Noteholder whose Notes are held in book--entry
form directly in the relevant Clearing System), as soon as
possible.
2. The quorum at the Meeting for passing an Extraordinary
Resolution (the business of which includes the sanctioning of a
Basic Terms Modification) shall (subject as provided below) be two
or more persons present holding or representing Notes or voting
certificates or being proxies or representatives and holding or
representing in aggregate not less than 75 per cent. of the
aggregate Principal Amount Outstanding of the Notes then
outstanding. If a quorum is not present within 15 minutes after the
time fixed for the Meeting, the Meeting will be adjourned for such
period being not less than 14 days nor more than 42 days, and shall
be held via videoconference at such time as may be appointed by the
chairman of the Meeting and approved by the Trustee. In addition,
in the event that the quorum required for, and the requisite
majority of votes cast at, the Meeting is satisfied but the
Eligibility Condition in respect of such Meeting is not satisfied,
the chairman of the Meeting will adjourn the Meeting for such
period being not less than 14 days nor more than 42 days, and such
Meeting shall be held via videoconference at such time as may be
appointed by the chairman of the Meeting and approved by the
Trustee. The Extraordinary Resolution will be considered at an
adjourned Meeting (notice of which will be given to the
Noteholders). At any adjourned Meeting, two or more persons present
holding or representing Notes or voting certificates or being
proxies or representatives and holding or representing in aggregate
not less than 25 per cent. of the aggregate Principal Amount
Outstanding of the Notes then outstanding shall (subject as
provided below) form a quorum and shall have the power to pass the
Extraordinary Resolution.
3. To be passed at the Meeting, the Extraordinary Resolution
requires (a) a majority in favour consisting of at least 75 per
cent. of the votes cast; or (b) a resolution in writing signed by
or on behalf of all Noteholders who for the time being are entitled
to receive notice of a meeting in accordance with the terms of the
Trust Deed, which resolution in writing may be contained in one
document or in several documents in like form each signed by or on
behalf of one or more of the Noteholders. The question submitted to
the Meeting shall be decided in the first instance by a show of
hands unless a poll is (before, or on the declaration of, the
result of the show of hands) demanded by the chairman of the
Meeting, the Issuer or by two or more persons present holding Notes
or a voting certificate or being a proxy or representative and
representing or holding in the aggregate not less than one-fiftieth
of the Principal Amount Outstanding of the Notes then outstanding.
A declaration by the Chairman 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 of or against such resolution.
4. The implementation of the Consent Solicitation and the
Extraordinary Resolution will be conditional on:
(a) the passing of the Extraordinary Resolution; and
(b) the quorum required for, and the requisite majority of votes
cast at, the Meeting being satisfied by Eligible Noteholders,
irrespective of any participation at the Meeting by Ineligible
Noteholders (including the satisfaction of such condition at an
adjourned Meeting) (the Eligibility Condition),
(together, the Consent Conditions).
5. If passed, the Extraordinary Resolution passed at the Meeting
will be binding upon all the Noteholders whether or not present or
voting at the Meeting.
Documents Available for Inspection
Copies of items (a) to (b) below (together, the Noteholder
Information) will be available from the date of this Notice, for
inspection during normal business hours at the specified offices of
the Principal Paying Agent on any weekday (public holidays
excepted) and on the Website up to and including the date of the
Meeting and at the Meeting:
(a) this Notice; and
(b) the current drafts of each Amendment Document, each as
referred to in the Extraordinary Resolution set out above.
This Notice should be read in conjunction with the Noteholder
Information.
The Noteholder Information may be supplemented from time to
time. Existing Noteholders should note that the Amendment Documents
may be subject to amendment (where such amendments are in line with
the Proposed Amendments) up until 7 days prior to the date fixed
for the Meeting. Should such amendments be made, blacklined copies
(showing the changes from the originally available Amendment
Documents) and clean versions will be available for inspection, at
the specified office of the Principal Paying Agent and on the
Website.
Certain blackline copies of the Amendment Documents have been
prepared using automatic word conversions of scanned physical
documents. As a result, the blacklines may show certain other
amendments which reflect corrections of a typographical or
formatting nature in order for the Amendment Documents to follow
the original physical copies where necessary. None of the Issuer,
the Trustee, the Solicitation Agent, the Tabulation Agent or the
Principal Paying Agent makes any representation that the blacklines
are an exact reflection of the amendments made to the relevant
Transaction Documents.
Existing Noteholders will be informed of amendments to the
Amendment Documents by announcements released on the regulatory
news service of the London Stock Exchange. Announcements will also
be made through the Clearing Systems for onward dissemination to
the Existing Noteholders.
Contact Information
Further information relating to the Proposed Amendments can be
obtained from the Solicitation Agent directly:
Lloyds Bank Corporate Markets plc
10 Gresham Street
London EC2V 7AE
Telephone number: +44 (0)20 7158 1726 / 1719
Attention: Liability Management Group
Email: liability.management@lloydsbanking.com
The address of the Principal Paying Agent, the Tabulation Agent,
the Trustee are set out below:
Trustee Tabulation Agent
BNY Mellon Corporate Trustee Services Limited Lucid Issuer Services Limited
40th Floor Tankerton Works
One Canada Square 12 Argyle Walk
London E14 5AL London WC1H 8HA
Fax: +44 (0)20 7964 4637 Telephone number: +44 (0)20 7704 0880
Email: corpsov4@bnymellon.com Email: sams@lucid-is.com
Attention: Trustee Administration Manager
Principal Paying Agent
The Bank of New York Mellon, London Branch, One Canada Square
London E14 5AL
Telephone: +44 (0)1202 689 984
Email: corpsov4@bnymellon.com
Attention: Corporate Trust Administration (Structured Finance)
Noteholders whose Notes are held by Euroclear or Clearstream,
Luxembourg should contact the Tabulation Agent at the address
details above for further information on how to vote at the
Meeting.
Announcements
If the Issuer is required to make an announcement relating to
matters set out in this Notice, any such announcement will be made
in accordance with all applicable rules and regulations via notices
to the Clearing Systems for communication to Noteholders and an
announcement released on the regulatory news service of the London
Stock Exchange.
This Notice is given by:
BOS (SHARED APPRECIATION MORTGAGES) NO. 2 PLC
Dated 25 August 2021
Annex A
Compounded daily sonia
http://www.rns-pdf.londonstockexchange.com/rns/6594J_1-2021-8-24.pdf
Annex B
SPREAD ADJUSTMENT DETERMINATION
1. Rationale for the Proposal
Due to the differences in the nature of LIBOR and SONIA, the
replacement of LIBOR as the reference rate for the purposes of
calculating certain amounts under the Notes will also require
corresponding adjustments to the relevant margin or interest basis
(as applicable). An adjustment (being the relevant Adjustment
Spread (as defined below)) will be added when calculating any
payment arising in the period from and including the Transition
Date which is determined with reference to Compounded Daily
SONIA.
The pricing methodologies for the Adjustment Spreads are based
on the 5-year historical median lookback approach using principles
outlined in the methodology for such adjustments contained in the
ISDA IBOR Fallback Supplement (supplement number 70 to the 2006
ISDA Definitions (which can be found at
http://assets.isda.org/media/3062e7b4/23aa1658-pdf/), which
incorporates into the ISDA definitions new interbank offered rate
fallbacks).
The date from which the proposed change in reference rate for
the provisions which currently reference sterling LIBOR is
scheduled to occur on the Interest Payment Date falling in November
2021 (the Transition Date). For the avoidance of doubt, the
interest basis applicable to the calculation of certain amounts
payable under the Notes up to but excluding the Transition Date
will continue to be sterling LIBOR and the Adjustment Spreads will
not apply to any calculations for the period up to but excluding
the Transition Date.
2. The Adjustment Spreads
Using the principles outlined in the ISDA IBOR Fallback
Supplement:
(i) the 3M Adjustment Spread will be the rate specified on
Bloomberg screen "SBP0003M Index", or any successor page, as
calculated by Bloomberg Index Services Limited (or a successor
provider as approved and/or appointed by ISDA from time to time)
(Bloomberg) in relation to 3-month Sterling LIBOR; and
(ii) the 12M Adjustment Spread will be the rate specified on
Bloomberg screen "SBP0012M Index", or any successor page, as
calculated by Bloomberg in relation to 12-month Sterling LIBOR,
in each case as shown on the relevant Bloomberg screen as at the
date of this Consent Solicitation Memorandum. The 3M Adjustment
Spread and the 12M Adjustment Spread are together the Adjustment
Spreads and each an Adjustment Spread.
As at the date of this Consent Solicitation Memorandum, and as a
result of the Financial Conduct Authority's announcement on 5 March
2021[1]:
(i) the rate specified on Bloomberg screen "SBP0003M Index" in
relation to 3-month Sterling LIBOR has been fixed at 0.1193 per
cent., and such rate (subject to any corrections or adjustments
made to such rate by Bloomberg in accordance with its rule book)
will be the 3M Adjustment Spread; and
(ii) the rate specified on Bloomberg screen "SBP0012M Index" in
relation to 12-month Sterling LIBOR has been fixed at 0.4644 per
cent., and such rate (subject to any corrections or adjustments
made to such rate by Bloomberg in accordance with its rule book)
will be the 12M Adjustment Spread.
3. The adjusted margin for default interest calculated in
accordance with the Conditions and the terms of the Trust Deed for
any payments relating to the period commencing on and including the
Transition Date
The margin for default interest calculated in accordance with
the Conditions and the terms of the Trust Deed (the Default
Interest Margin) shall be adjusted as follows:
the sum of:
(A) 0.30 per cent. per annum; plus
(B) the 12M Adjustment Spread.
4. The adjusted margin for the Funding Element calculated in
accordance with the terms of the Mortgage Portfolio Agreement for
any payments relating to the period commencing on and including the
Transition Date
The margin for the Funding Element calculated in accordance with
the terms of the Mortgage Portfolio Agreement (the Funding Element
Margin) shall be adjusted as follows:
the sum of:
(A) 0.30 per cent. per annum; plus
(B) the 3M Adjustment Spread.
5. The margin to be applied in calculating the Equity
Compensation Amount in accordance with the Conditions for any
payments relating to the period commencing on and including the
Transition Date
The margin to be applied in calculating the Equity Compensation
Amount in accordance with the Conditions (the Equity Compensation
Amount Margin) shall be the 3M Adjustment Spread.
The detailed provisions relating to the calculation of
Compounded Daily SONIA are set out in the Amendment Documents
available at the following link:
https://deals.lucid-is.com/sams.
For all payments arising in the period up to but excluding the
Transition Date, the payments for such periods shall continue to be
determined by reference to the applicable GBP LIBOR rate in effect
at such time.
[1]
https://www.fca.org.uk/publication/documents/future-cessation-loss-representativeness-libor-benchmarks.pdf
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END
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