58HD Gt.hall No1 A1

TIDM58HD

RNS Number : 5023G

Great Hall Mortgages No1 plc

26 July 2021

THIS NOTICE IS IMPORTANT AND REQUIRES THE IMMEDIATE ATTENTION OF NOTEHOLDERS. PLEASE LET THIS NOTICE SERVE AS OFFICIAL AUTHORISATION (LETTER OF AUTHORITY) TO RELEASE SECURITY HOLDINGS IDENTITY INFORMATION UNDER EU DIRECTIVE 2007/36/EC AND THE RELATED COMMISSION IMPLEMENTING REGULATION (EU) 2018/1212 OF 03 SEPTEMBER 2018. 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 INDEPENT FINANCIAL OR LEGAL ADVISER.

NOTICE TO THE HOLDERS OF THE

GBP216,300,000 Class A2a Notes due 2038

(Common Code: 027608639; ISIN: XS0276086393)

(the "Class A2a Notes")

EUR175,000,000 Class A2b Notes due 2038

(Common Code: 027609279; ISIN: XS0276092797)

(the "Class A2b Notes")

GBP25,800,000 Class Ba Notes due 2038

(Common Code: 027608698; ISIN: XS0276086989)

(the "Class Ba Notes")

EUR7,500,000 Class Bb Notes due 2038

(Common Code: 027609333; ISIN: XS0276093332)

(the "Class Bb Notes")

GBP11,500,000 Class Ca Notes due 2038

(Common Code: 027608752; ISIN: XS0276087524)

(the "Class Ca Notes")

EUR8,000,000 Class Cb Notes due 2038

(Common Code: 027609392; ISIN: XS0276093928)

(the "Class Cb Notes")

GBP6,000,000 Class Da Notes due 2038

(Common Code: 027608850; ISIN: XS0276088506)

(the "Class Da Notes")

EUR11,500,000 Class Db Notes due 2038

(Common Code: 027609503; ISIN: XS0276095030)

(the "Class Db Notes")

GBP5,600,000 Class Ea Notes due 2038

(Common Code: 027608922; ISIN: XS0276089223)

(the "Class Ea Notes")

issued by

Great Hall Mortgages No. 1 PLC Series 2006-1

(the "Issuer" or the "Transaction" as the context requires)

on 12 December 2006

The Class A2a Notes, Class A2b Notes, Class Ba Notes, Class Bb Notes, the Class Ca Notes, the Class Cb Notes, the Class Da Notes, the Class Db Notes and the Class Ea Notes are together, the "Notes".

Capitalised terms used but not otherwise defined in this notice shall have the meanings set out in the glossary in the prospectus issued by the Issuer on 12 December 2006 in respect to the Transaction.

Since July 2017, there has been a concerted and intensive global regulator-driven effort to encourage, and ultimately effect, the transition away from the use of interbank offered rates, including the GBP London Interbank Offered Rate ("LIBOR"), in financial instruments to risk-free rates or other appropriate benchmarks.

In January 2020, the Bank of England (the "BoE"), the UK Financial Conduct Authority (the "FCA") and the Working Group on Sterling Risk-Free Reference Rates published a joint statement outlining priorities and milestones for 2020 on LIBOR transition.

LIBOR-linked mortgages, such as the Loans, are specifically highlighted as a class for which there is a case for action in the UK Risk Free Rate's Working Group's ("RFR Working Group") Paper on the identification of Tough Legacy issues published in May 2020.

On 5 March 2021, the FCA formally announced that the future cessation and loss of representativeness of LIBOR will take place on 31 December 2021. The FCA will no longer compel panel banks to submit to LIBOR beyond 31 December 2021 and the FCA will no longer use its powers to require the benchmark administrator of LIBOR to continue to use its powers to publish LIBOR on the basis of panel bank submissions. In addition, the Bank of England and the FCA have mandated the RFR 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. Therefore, the continuation of LIBOR on the current basis will cease after 2021, and regulators have urged market participants to take active steps to implement the transition to SONIA and other risk-free rates ("RFRs") ahead of this deadline.

By way of overview, the Transaction includes the following LIBOR-linked elements:

   1.           Notes with a floating rate of interest linked to LIBOR; 
   2.           Series Investment Accounts with floating rates of interest linked to LIBOR; 
   3.           a Series Liquidity Facility with a floating rates of interest linked to LIBOR; 
   4.           a Series Currency Hedge Agreement with reference to LIBOR, 

which in each case are subject to the terms of the Transaction Documents and the Series Note Conditions; and

5. underlying Mortgage Loans bearing interest linked to LIBOR, which are subject to the terms of the Mortgage Conditions.

The below provisions are subject to the Transaction Documents (as the same may have been amended or restated from time to time).

Overview

The Issuer is considering certain amendments to the Transaction Documents to replace LIBOR with an alternative reference rate before the discontinuation of LIBOR and the activation of fall-back positions (if any) in such documents. Noteholders are requested to disclose their identity and holdings to the Issuer in order to participate in discussions relating to the replacement methodology and are encouraged to review the Series Note Conditions and the Transaction Documents in full (in particular any fallback provisions applicable in case of unavailability of LIBOR) and take their own advice as to the potential implications of the discontinuation of LIBOR.

The Issuer is considering soliciting a proposal for amendments to the Transaction Documents to Noteholders. Any such solicitation will take place as soon as possible to enable the Issuer sufficient time to implement any approved proposal before the Interest Payment date falling on 18 December 2021 at the latest. Should Noteholders not disclose themselves and participate in discussions, the preferences of Noteholders may not be taken into consideration in preparing the final proposal for Noteholders to vote on by way of an Extraordinary Resolution at meetings of the Noteholders.

   1.           Notes with a floating rate of interest linked to LIBOR 

If, following the discontinuance of LIBOR, the Benchmark Rate cannot be determined by the Interest Calculation Agent, the Benchmark Rate shall be the Benchmark Rate most recently determined in relation to the Interest Liability, as set out in section 5.5 (Determination of Benchmark Rate using a previous rate) of the Standard Benchmark Rate Provisions applicable to the Notes. If the rate of interest is determined by reference to a calculation made on a previous historic date on an ongoing basis, this would have the effect of converting the existing floating rate of interest to a fixed rate of interest.

   2.           Series Investment Accounts bearing rates of interest linked to LIBOR 

If, following the discontinuation of LIBOR, it is not possible to determine Series Investment Account Interest Rates to be paid by the Series Investment Account Provider on the Series Investment Accounts, pursuant to clause 3.1(c) of the Note Issue Instrument constituting the Series Investment Account Servicers Agreement and sections 4.6 and 4.7 of the Series Specific Provisions set out in the Note Issue Supplement, no alternative interest rate is provided for in the Transaction Documents. This will potentially result in no effective interest rate being applied to the Series Investment Accounts.

   3.           Series Liquidity Facility bearing rate of interest linked to LIBOR 

If, following the discontinuation of LIBOR, it is not possible to determine the Interest Rate for the Series Liquidity Facility Drawings, no alternative interest rate is provided for in the Transaction Documents. This will potentially result in no effective interest rate being applied under the Series Liquidity Facility Agreement.

   4.           Series Currency Hedge Agreement with a rate linked to LIBOR 

If, following the discontinuation of LIBOR, the rates for the Series Currency Hedge Agreement cannot be determined, no alternative rate is provided for in the Transaction Documents. This will potentially result in no effective interest rate being applied under the Series Currency Hedge Agreement.

   5.           Underlying mortgage loans bearing interest linked to LIBOR 

The Series Portfolio Servicer has been appointed to perform mortgage administration services as set out in the Series Portfolio Services Agreement. In the Series Portfolio Services Agreement, the Series Portfolio Legal Title Holder has been granted the authority as lender to determine and set the rate of interest applicable to the Mortgage Loans in accordance with the Mortgage Conditions in the Series Portfolio.

As of the date of the latest investor report dated 18 March 2021, in respect of the Interest Payment Date on 18 March 2021, there were 372 LIBOR-linked mortgage loans outstanding (representing 28.23% of the total outstanding pool), as more particularly set out in such investor report.

Pursuant to the terms of the Standard Series Portfolio Services Provisions, the Series Portfolio Servicer shall take all action and do all other things which it would be reasonable to expect a Prudent Residential Mortgage Lender to do in administering its mortgages or as reasonably requested by the Security Trustee.

The FCA acknowledges that there are "tough legacy" contracts across various financial products which reference LIBOR and cannot practicably be transitioned away from that benchmark rate without actions or agreements by or between the contract counterparties themselves which are practically difficult to undertake in the period until discontinuance.

The Financial Services Act 2021 (the "Act") provides an overarching legal framework which gives the FCA new and enhanced powers to manage the wind-down of a critical benchmark and seeks to reduce the risk of litigation arising from disputes about the continuity of "tough legacy" contracts. The Act aims to do this by providing the FCA with the necessary powers to designate a change to the methodology by which a benchmark such as LIBOR is set so that references in "tough legacy" contracts to LIBOR will effectively be treated as a reference to the new methodology (i.e. a synthetic LIBOR rate), rather than a rate which no longer exists.

On 20 May 2021, the FCA launched a consultation paper in relation to how it proposes using its powers in relation to the use of critical benchmarks that are being wound down. The FCA stated that the paper would be of interest to users of critical benchmarks such as LIBOR, including mortgage lenders and intermediaries and consumers who have mortgages that use critical benchmarks. The FCA asked for comments on the paper by 17 June 2021 and following the consultation, in Q3 of 2021, it will publish a statement of policy and feedback statement.

The Issuer and the Servicer are in discussions as to what action, if any, can or will be taken in respect of the LIBOR-linked Mortgage Loans in light of the obligations of the relevant parties under the Mortgage Conditions, the Transaction Documents, the publications from the BoE, FCA and RFR Working Group and also applicable law and regulation. There can be no assurance that the interest rate on the LIBOR-linked Mortgage Loans will be able to be set by the Series Portfolio Legal Title Holder following the discontinuation of LIBOR.

Restrictions on Amendments

Any proposed amendment to the rate of interest on the Notes, the Series Investment Accounts and/or the Series Liquidity Facility from LIBOR to SONIA or an alternative RFR (including the determination of any credit spread adjustment and any consequential amendments to the Transaction Documents to give effect thereto) will require the approval of Noteholders by way of Extraordinary Resolutions passed by Noteholders in accordance with the Series Note Conditions and the Series Trust Deed. Such amendments will also require the approval of certain parties to those Transaction Documents.

The Interest Calculation Agent has no discretion in relation to the determination of the interest rate for the Notes is obliged to determine the same in accordance with the Series Note Conditions and the Transaction Documents. The Series Note Trustee is not in a position to exercise any discretionary power in relation to any proposed amendment to the Transaction Documents in connection with LIBOR transition as any alternation of the interest rate applicable in respect to the Notes is a Series Basic Terms Modification. An Extraordinary Resolution of any class of Noteholders in relation to a Series Basic Terms Modification shall not be effective unless it is sanctioned by an Extraordinary Resolution of Noteholders of each other class of Notes.

Nothing in this notice is intended to amount to an invitation or inducement to engage in investment activity, the exchange of commercially sensitive information and/or any other form of coordination, other than what is strictly necessary for the review of the Series Note Conditions and the Transaction Documents in light of proposed amendments to such documents, including in relation to the transition from LIBOR to an alternative RFR. Please note that any information disclosed amongst Noteholders might constitute inside information under Regulation (EU) No 596/2014 (market abuse regulation) as regards the Issuer and the Notes. By contacting the Issuer and engaging with other Noteholders (if applicable), all Noteholders confirm that they are aware that any such information disclosed between Noteholders might constitute inside information and that they are aware of their legal responsibilities in that respect.

In accordance with normal practice, the Series Note Trustee assumes no responsibility for this notice. The Series Note Trustee has not verified, and expresses no opinion as to the contents of this notice, and makes no representation that all relevant information has been disclosed, or has been disclosed accurately, to Noteholders. Accordingly, the Series Note Trustee urges Noteholders who are in any doubt as to the impact of this notice to seek their own independent legal and/or financial advice.

   6.           Procedure for disclosing identity and holdings 

The Issuer wishes to initiate engagement strategy with Noteholders and has appointed i2 Capital Markets Ltd as its information agent (the "Information Agent") to facilitate communication between the Noteholders and the Issuer, initially by requesting Noteholders (or their respective custodians and intermediaries) to disclose their identities and holdings of the Notes to the Information Agent as soon as possible.

Noteholders are encouraged to disclose themselves as a matter of urgency by contacting the Information Agent. Noteholders (or their respective custodians and intermediaries) should respond to this disclosure request by no later than 4:00pm (London Time) on Tuesday 3 August 2021 via one of two options below:

6.1 Providing their information directly to the Information Agent (including through its custodian bank, broker or other intermediary) by registering interest at:

https://i2capmark.com/event-details/19/Holder/great-hall-mortgages-no.1-plc-series-2006-1

Registration will allow holders (or their representative) to receive up-to-date information, notices and materials promptly about any forthcoming information regarding the Notes.

In order to access this restricted information, holders must first register as a user (follow the prompts to sign up) then access the event relating to the Notes by completing a participation form, which will include submitting your current proof of holding.

Please obtain either a current custodian statement or screenshot from your custodian who has an account with either Euroclear or Clearstream; and/or

6.2 Provide the required information, via their custodian bank, to the relevant clearing system, Euroclear or Clearstream, through the relevant disclosure event established for this identification request.

The Issuer and Information Agent do not require the blocking of your securities in order to reply to the request and custodian banks should ensure they advise their clients of this identification request.

Any information gathered by the Information Agent will be kept strictly confidential and for use by the Issuer (and its advisers) only.

If you have any questions or require any clarification about this notice, please contact the Information Agent:

i2 Capital Markets Ltd

Kemp House

160 City Road

London

EC1V 2NX

Email: info@i2capmark.com

Phone: +44 203 633 1212

Attention: The Directors

This notice is given by the Issuer.

Dated: 20 July 2021

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July 26, 2021 10:59 ET (14:59 GMT)