TIDM40XV
RNS Number : 8264X
Paragon Mortgages (No.12) PLC
07 January 2022
NOTICE OF MEETING - USD NOTES
THIS NOTICE IS IMPORTANT AND REQUIRES THE IMMEDIATE ATTENTION OF
NOTEHOLDERS. IF ANY NOTEHOLDER IS IN ANY DOUBT AS TO THE ACTION IT
SHOULD TAKE OR IS UNSURE OF THE IMPACT OF THE IMPLEMENTATION OF ANY
EXTRAORDINARY RESOLUTION TO BE PROPOSED AT A MEETING, IT SHOULD
SEEK ITS OWN FINANCIAL AND LEGAL ADVICE, INCLUDING AS TO ANY TAX
CONSEQUENCES, IMMEDIATELY FROM ITS STOCKBROKER, BANK MANAGER,
SOLICITOR, ACCOUNTANT OR OTHER INDEPENT FINANCIAL OR LEGAL
ADVISER.
PARAGON MORTGAGES (NO. 12) PLC
(incorporated in England and Wales with limited liability under
registered number 5386924)
(the " Issuer ")
NOTICE OF MEETING
of the holders of the outstanding Notes of the Issuer (as
described below)
ISIN/ Common
Description of Code / CUSIP Aggregate Principal Current Interest
Notes Number (if applicable) Amount Outstanding Rate
---------------- ------------------------ -------------------- ------------------
Class A2c Notes Rule 144A Note: U.S.$93,871,307 3 month USD LIBOR
due 2038 (the US69913BAB27 + Notes Interest
"Notes") / 26165580 / Rate Margin
69913B AB 2
Reg S Note:
XS0261647027
/ 26164702
NOTICE IS HEREBY GIVEN that a meeting (the "Meeting") of the
holders of the Notes (the "Noteholders") convened by the Issuer
will be held via teleconference for the purpose of considering and,
if thought fit, passing the applicable resolutions set out below
which will, be proposed as an Extraordinary Resolution in
accordance with the provisions of the trust deed dated 20 July 2006
and amended on 30 January 2013 and 15 May 2019, made between, inter
alios, the Issuer and Citicorp Trustee Company Limited (the
"Trustee") as trustee for the Noteholders, and constituting the
Notes (the "Trust Deed").
The Issuer is also holding meetings of certain other noteholders
of the Classes listed in paragraph 8 of the Extraordinary
Resolution below. The initial meeting (in respect of the Class A1
Notes) will commence at 10.00 a.m. (London time) on 31 January
2022. Subsequent meetings (including the Meeting) in respect of
each other class of notes (in the order set out in the list of
Classes in paragraph 8 of the Extraordinary Resolution below) will
be held at 5 minute intervals thereafter or after the completion of
the preceding meeting (whichever is later).
Unless the context requires otherwise, capitalised terms used
but not defined in this Notice have the meanings given to them in
the Trust Deed, the terms and conditions of the Notes (the
"Conditions") or the Consent Solicitation Memorandum (as defined
below).
EXTRAORDINARY RESOLUTION
IN RESPECT OF THE CLASS A2c NOTES DUE 2038
"THAT this meeting of the holders of the outstanding
U.S.$311,000,000 Class A2c Notes due 2038 (the "Notes"), issued by
Paragon Mortgages (No. 12) plc (the "Issuer") and constituted by
the trust deed dated 20 July 2006 and amended on 30 January 2013
and 15 May 2019 (the "Trust Deed"), made between, inter alios, the
Issuer and Citicorp Trustee Company Limited (the "Trustee") as
trustee for the holders of the Notes (the "Noteholders"),
hereby:
1. (subject to paragraph 7 of this Extraordinary Resolution)
assents to the modification of: (A) the terms and conditions of the
Notes (the "Conditions") to provide for the replacement of LIBOR
with SONIA as the reference rate for calculating interest in
respect of the Sterling Notes for each Interest Period (as defined
in the Conditions) commencing on or after the Effective Date, the
inclusion of new fallbacks to address the non-availability of SONIA
or the replacement of SONIA and certain other related amendments so
that the relevant provisions of the Conditions will be in the form
set out in the draft Supplemental Trust Deed (as defined below);
(B) the terms of the Subordinated Loan, the Administration
Agreement, the Substitute Administrator Agreement and the
Substitute Administrator Facilitator Agreement pursuant to the
Relevant Documents Amendment Agreement to reflect the change to the
interest rate basis of the Sterling Notes; and (C) the terms of
each Swap Transaction to hedge the interest rate and currency risk
in respect of the Non-Sterling Notes;
2. (subject to paragraph 7 of this Extraordinary Resolution)
authorises, directs, requests and empowers the Issuer and the
Trustee to: (a) consent to and execute: (i) a supplemental trust
deed (the "Supplemental Trust Deed"); and (ii) the Amendment
Agreements, in each case in the form or substantially in the forms
of the drafts produced to this Meeting, with such amendments
thereto (if any) as the Trustee requires or agrees to give effect
to the changes referred to in paragraph 1 of this Extraordinary
Resolution and such other changes as may be necessary in its sole
opinion; and (b) execute and do all such other deeds, instruments,
acts and things as may be necessary in the Trustee's sole opinion
to carry out and to give effect to this Extraordinary Resolution
and the implementation of the modifications referred to in this
Extraordinary Resolution;
3. (subject to paragraph 7 of this Extraordinary Resolution)
sanctions and assents to every abrogation, modification or
compromise of, or arrangement in respect of, the rights of the
Noteholders against the Issuer appertaining to the Notes, each Swap
Transaction, the Subordinated Loan, the Administration Agreement,
the Substitute Administrator Agreement and the Substitute
Administrator Facilitator Agreement, whether or not such rights
arise under the Conditions, the Trust Deed or any other transaction
documents, involved in or resulting from or to be effected by, the
modifications referred to in paragraphs 1 and 2 of this
Extraordinary Resolution and their implementation;
4. (a) holds harmless, discharges and exonerates the Trustee
from, and indemnifies the Trustee against, any and all liability
for which it may have become or may become responsible under the
Trust Deed, any other Relevant Document or the Notes in respect of
any act or omission in connection with the proposal by the Issuer
to the Noteholders to approve the modification of the Conditions
and the consequential or related amendments to certain transaction
documents, in the manner set out in the Notice (the "Proposal"),
this Extraordinary Resolution or its implementation and/or the
modifications; and (b) irrevocably waives any claim against the
Issuer or the Trustee which arises as a result of any loss or
damage to the holders of the Notes suffered or incurred as a result
of the Issuer or the Trustee following the terms of this
Extraordinary Resolution (including for the avoidance of doubt, the
directions and/or instructions contained herein), even though it
may subsequently be found that there is a defect in this
Extraordinary Resolution or that for any reason this Extraordinary
Resolution is not valid or binding upon the holders of the
Notes;
5. agrees that the Trustee is not responsible for the accuracy,
completeness, validity or correctness of the statements made and
documents referred to in this Extraordinary Resolution and the
Consent Solicitation Memorandum or any omissions from this
Extraordinary Resolution or the Consent Solicitation
Memorandum;
6. confirms that the Trustee is hereby authorised and instructed
not to obtain any legal opinions in relation to, or to enquire into
the power and capacity of any person to enter into, the Amendment
Agreements or the Supplemental Trust Deed or the due execution and
delivery thereof by any party thereto or the validity or
enforceability thereof and it will not be liable for any
consequences resulting from this instruction;
7. declares that the implementation of this Extraordinary Resolution is conditional on:
(a) the Consent Solicitation (as defined below) not having been terminated; and
(b) the passing of this Extraordinary Resolution and the passing
of, and the satisfaction of any conditions referred to in, the
corresponding Extraordinary Resolution in respect of each other
Class listed in paragraph 8 of this Extraordinary Resolution;
and
8. acknowledges that the following terms, as used in this
Extraordinary Resolution, have the following meanings given
below:
"Administration Agreement" means the administration agreement
dated 20 July 2006 and amended on 30 January 2013 between Paragon
Finance plc, Mortgage Trust Services plc, the Issuer, Paragon
Mortgages Limited, Mortgage Trust Limited and the Trustee;
"Amendment Agreements" means the Swap Amended and Restated
Confirmations and the Relevant Documents Amendment Agreement;
"Class" means each of the Class A1 Notes, the Class A2a Notes,
the Class A2b Notes, the Class A2c Notes, the Class B1a Notes, the
Class B1b Notes and the Class C1a Notes and Class C1b Notes;
"Class A1 Notes" means the U.S.$1,500,000,000 Class A1 Notes due
2038 issued by the Issuer which, on 15 May 2019 were
(simultaneously with the termination of the currency swap A1
agreement dated 14 July 2006) converted into a GBP Equivalent at a
fixed exchange rate of USD to GBP of 1.84, producing GBP Equivalent
Initial Principal Amount of GBP815,217,391.30 and an A1 Note
Mandatory Transfer Price and GBP Equivalent Principal Amount
Outstanding of GBP317,409,456.52 in accordance with the A1 Note
Conditional Purchase Agreement and which, on 15 May 2019, were
redenominated as GBP Class A1 Notes;
"Class A2a Notes" means the GBP145,000,000 Class A2a Notes due
2038 issued by the Issuer;
"Class A2b Notes" means the EUR245,000,000 Class A2b Notes due
2038 issued by the Issuer;
"Class A2c Notes" means the U.S.$311,000,000 Class A2c Notes due
2038 issued by the Issuer;
"Class B1a Notes" means the GBP25,000,000 Class B1a Notes due
2038 issued by the Issuer;
"Class B1b Notes" means the EUR126,000,000 Class B1b Notes due
2038 issued by the Issuer;
"Class C1a Notes" means the GBP17,000,000 Class C1a Notes due
2038 issued by the Issuer;
"Class C1b Notes" means the EUR106,000,000 Class C1b Notes due
2038 issued by the Issuer;
"Consent Solicitation" means the invitation by the Issuer to,
among others, the Noteholders to consent to the modification of the
Conditions relating to the Notes and other related documents, as
described in the Consent Solicitation Memorandum and as the same
may be amended in accordance with its terms;
"Consent Solicitation Memorandum" means the consent solicitation
memorandum dated 7 January 2022 prepared by the Issuer in relation
to the Consent Solicitation;
"Effective Date" means the Interest Payment Date (as defined in
the Conditions) falling in February 2022;
"Non-Sterling Notes" means the issuances of notes by the Issuer
that are not Sterling Notes;
"Notice" means the notice given by the Issuer to Noteholders on
or around 7 January 2022;
"Relevant Documents Amendment Agreement" means the amendment and
restatement deed that will amend and restate the terms of the
Administration Agreement, Subordinated Loan Agreement, Substitute
Administrator Agreement and Substitute Administrator Facilitator
Agreement to reflect this Extraordinary Resolution and such other
changes as may be necessary to implement the modifications referred
to in this Extraordinary Resolution;
"Sterling Notes" means the Class A1 Notes, the Class A2a Notes,
the Class B1a Notes and the Class C1a Notes;
"Substitute Administrator Agreement" means the substitute
administrator agreement dated 20 July 2006 and amended on 30
January 2013 between Paragon Finance plc, Mortgage Trust Services
plc, the Issuer, the Trustee and Homeloan Management Limited;
"Substitute Administrator Facilitator Agreement" means the
substitute administrator facilitator agreement dated 30 January
2013 between the Issuer, the Trustee and Intertrust Management
Limited (formerly Structured Finance Management Limited) as
substitute administrator facilitator, as modified, novated,
supplemented or replaced from time to time;
"Subordinated Loan" means the subordinated loan advanced to the
Issuer from time to time under the terms of a subordinated loan
agreement dated 20 July 2006 and amended on 26 June 2019 between
the Issuer, the Trustee, Mortgage Trust Services plc and Paragon
Finance plc;
"Swap Transaction" means, in respect of the:
1. Class A2b Notes: the currency swap transaction between the
Issuer and Barclays Bank PLC with a trade date of 14 July 2006;
2. Class A2c Notes: the currency swap transaction between the
Issuer and Barclays Bank PLC with a trade date of 14 July 2006;
3. Class B1b Notes: the currency swap transaction between the
Issuer and Barclays Bank PLC with a trade date of 14 July 2006;
and
4. Class C1b Notes: the currency swap transaction between the
Issuer and Barclays Bank PLC with a trade date of 14 July 2006,
each a "Swap Transaction" and together the "Swap Transactions";
and
"Swap Amended and Restated Confirmations" means the
confirmations that will amend and restate the terms of the Swap
Transactions to reflect this Extraordinary Resolution and such
other changes as may be necessary to implement the modifications
referred to in this Extraordinary Resolution.".
Background
The Issuer has convened the Meeting for the purpose of enabling
Noteholders to consider and resolve, if they think fit, to pass the
Extraordinary Resolution proposed in relation to the Notes.
On 5 March 2021 (the "LIBOR Announcement Date"), the UK
Financial Conduct Authority (the "FCA") confirmed that all Sterling
LIBOR settings will either cease to be provided by any
administrator or no longer be representative of their underlying
market immediately after 31 December 2021 (the "LIBOR
Announcement"). The FCA has also made a number of previous
announcements regarding the proposed cessation of LIBOR. In
relation to 3-month Sterling LIBOR in particular (as the interest
rate benchmark currently applicable to the Sterling Notes), the
LIBOR Announcement provided that immediately after 31 December
2021, such LIBOR setting would no longer be representative of the
underlying market and economic reality and that such
representativeness will not be restored. For additional background
to the LIBOR Announcement, we refer to:
(a) the speech of Andrew Bailey, the Chief Executive of the FCA,
on 27 July 2017 entitled "The Future of LIBOR";
(b) the statement of the FCA entitled "FCA Statement on LIBOR
panels" dated 24 November 2017;
(c) the speech of Andrew Bailey, the Chief Executive of the FCA,
on 12 July 2017 entitled "Interest rate benchmark reform -
transition to a world without LIBOR";
(d) the "Dear CEO Letter" sent by the FCA and the Prudential
Regulation Authority to major banks and insurers and published on
the FCA website, dated 19 September 2018, relating to the need to
transition from LIBOR to alternative benchmarks;
(e) the speech of Andrew Bailey, the Chief Executive of the FCA,
on 15 July 2019 entitled "The Future of LIBOR";
(f) the statement of the FCA entitled "Transition from LIBOR" dated 4 September 2019;
(g) the open letter from The Investment Association to issuers
entitled "Investors call on companies to take urgent action and
transition their LIBOR-linked bonds" dated 3 February 2021; and
(h) the statement of the FCA entitled "Further arrangements for
the orderly wind-down of LIBOR at end-2021" dated 29 September
2021.
(a) to (f) and (h) of the above together with the LIBOR
Announcement are is available from the website of the FCA at
www.fca.org.uk and (g) is available at
https://www.theia.org/media/press-releases/investors-call-companies-take-urgent-action-and-transition-their-libor-linked.
In 2017, the Bank of England (the "BoE") and the FCA announced
that they had mandated a working group (the "Working Group") to
implement a broad-based transition to the Sterling Overnight Index
Average ("SONIA") across sterling bond, loan and derivative
markets, so that SONIA is established as the primary sterling
interest rate benchmark by the end of 2021. Therefore, Sterling
LIBOR will not continue on the current basis after 2021, and
regulators have urged market participants to take active steps to
implement the transition to SONIA and other risk-free rates ahead
of this deadline.
In anticipation of the end of LIBOR, the Mortgage Trust Limited
originated mortgages and the Paragon Mortgages Limited originated
mortgages transitioned from LIBOR to a term SONIA basis on 1 June
2021 and 1 July 2021, respectively, and customers were sent a
notice of variation.
On the basis that the final maturity date of the Notes falls
after 2021, the Issuer has convened the Meeting for the purpose of
enabling the Noteholders to consider and resolve, if they think
fit, to approve the Proposal by way of an Extraordinary Resolution
in relation to each Class, implementing:
(i) respective changes in the interest basis specified in the
Conditions of the Sterling Notes from Sterling LIBOR to SONIA by
means of a supplemental trust deed;
(ii) inclusion of new fallbacks to address the non-availability
of SONIA or the replacement of SONIA;
(iii) respective changes in the floating rate options specified
in the Swap Transactions hedging the Non-Sterling Notes from
Sterling LIBOR to SONIA (including corresponding and/or
consequential amendments) by means of the Swap Amended and Restated
Confirmations; and
(iv) corresponding and/or consequential amendments to the
Administration Agreement, Subordinated Loan Agreement, Substitute
Administrator Agreement and Substitute Administrator Facilitator
Agreement by means of an amendment and restatement deed in relation
to the Administration Agreement, Subordinated Loan Agreement,
Substitute Administrator Agreement and Substitute Administrator
Facilitator Agreement.
The Proposal constitutes a Basic Terms Modification under the
Conditions of the Notes, and therefore the holders of each Class
are invited to approve the Proposal, even though the interest rate
applicable to the Sterling Notes (and no other Notes) will be
amended if the Proposal is implemented (although the sterling
amounts payable by the Issuer under the cross-currency swaps in
respect of the Non-Sterling Notes will also be amended if the
Proposal is implemented). If an Extraordinary Resolution in respect
of any Class is not successfully passed or (in the case of any
Class of the Sterling Notes) the related Eligibility Condition is
not satisfied, then the Issuer will not implement the Proposal and
no Class of Sterling Notes will be amended (irrespective of whether
or not the relevant Extraordinary Resolution(s) for any of the
other Class passes and/or any related Eligibility Condition(s) is
satisfied).
The proposed revised formula for calculating interest on the
Sterling Notes and the cross-currency swaps will be as set out in
Annex 1 (Compounded Daily SONIA and Base Rate Modification) of this
Notice. Due to the differences in the nature of Sterling LIBOR and
SONIA, the replacement of Sterling LIBOR as the reference rate for
the Sterling Notes requires a corresponding credit adjustment
spread to the existing Notes Interest Rate Margin payable in
respect of each Class of the Sterling Notes. The Proposal uses the
"5-year historical median" methodology agreed by the International
Swaps and Derivatives Association for determining this credit
adjustment spread and recommended by the Working Group for use in
cash products such as the Sterling Notes. It involves taking the
median of the daily difference between Sterling LIBOR and SONIA in
the 5 years leading up to the LIBOR Announcement Date. Using this
methodology, the credit adjustment spread for 3-month Sterling
LIBOR is 0.1193 per cent., as calculated and published by Bloomberg
Index Services Limited on the LIBOR Announcement Date and as
referenced on Bloomberg screen SBP0003M Index on the date of this
Notice of Meeting.
The Trustee has not been involved in the formulation of the
Extraordinary Resolution and the Trustee expresses no opinion on
the merits of any Extraordinary Resolution or on whether
Noteholders would be acting in their best interests in approving
the Extraordinary Resolution, and nothing in this Notice should be
construed as a recommendation to Noteholders from the Trustee to
vote in favour of, against or abstain from voting in respect of,
any Extraordinary Resolution. Noteholders should take their own
independent financial, accounting and legal advice on the merits
and on the consequences of voting in favour of, against or abstain
from voting in respect of, the Extraordinary Resolution, including
as to any tax consequences. The Trustee has not reviewed, nor will
it be reviewing, any documents relating to the Consent
Solicitation, except those to which it will be a party and this
Notice. On the basis of the information set out in this Notice of
Meeting (other than Annex 2 (Margin Adjustment) of this Notice
which it has not reviewed) and the Consent Solicitation Memorandum,
the Trustee has authorised it to be stated that it has no objection
to the Extraordinary Resolution being put to Noteholders for their
consideration.
Before making a decision with respect to the Proposal,
Noteholders should carefully consider, in addition to the other
information contained in this Notice, the risk factors set out in
Annex 1 (Compounded Daily SONIA and Base Rate Modification) of this
Notice.
Consent Solicitation
The Issuer has invited holders of the Notes (and the other
Classes) (the "Consent Solicitation") to consent to the approval,
by Extraordinary Resolution at the Meeting, of the modification of
the Conditions of the Sterling Notes and related documents as
described in the Extraordinary Resolution as set out above, all as
further described in the Consent Solicitation Memorandum (as
defined in the Extraordinary Resolution set out above).
Noteholders may obtain, from the date of this Notice, a copy of
the Consent Solicitation Memorandum from the Consent Website
subject to eligibility confirmation and registration.
Alternatively, Noteholders may contact the Information and
Tabulation Agent, the contact details for which are set out
below.
Agreements, acknowledgements, representations, warranties and
undertakings
By submitting an Electronic Voting Instruction to the relevant
Clearing System in accordance with the standard procedures of such
Clearing System or by submitting a Form of DTC Sub-Proxy in respect
of USD Notes to the Information and Tabulation Agent in accordance
with the procedures described above, the holder of the relevant
Notes and any Direct Participant submitting such Electronic Voting
Instruction or Form of DTC Sub-Proxy (as applicable) on such
holder's behalf will be deemed to agree to, acknowledge, represent,
warrant and undertake to the Issuer, the Solicitation Agent, the
Trustee, the Principal Paying Agent, the Reference Agent, the
Registrar and the Information and Tabulation Agent the following:
(i) at the time of submission of Electronic Voting Instruction or
the submission of the Form of DTC Sub-Proxy (as applicable); (ii)
in respect of the USD Notes only, on the Record Date; (iii) on the
Expiration Deadline; and (iv) at the time of the Meeting and the
time of any adjourned such Meeting (if the holder of such Notes or
the Direct Participant is unable to give these acknowledgements,
agreements, representations, warranties and undertakings, such
holder or Direct Participant should contact the Information and
Tabulation Agent immediately):
(a) Non-reliance: it has received the Consent Solicitation
Memorandum, and has reviewed and accepts the terms, conditions,
risk factors and other considerations of the Consent Solicitation,
all as described in the Consent Solicitation Memorandum, and has
undertaken an appropriate analysis of the implications of the
Proposal without reliance on the Issuer, the Administrators, the
Solicitation Agent, the Trustee, the Principal Paying Agent, the
Reference Agent, the Registrar or the Information and Tabulation
Agent;
(b) Identity: by blocking the relevant Notes in the relevant
Clearing System, it will be deemed to consent, in the case of a
Direct Participant, to have such Clearing System provide details
concerning its identity, including account number, to the
Information and Tabulation Agent (and for the Information and
Tabulation Agent to provide such details to the Issuer, the
Administrators and the Solicitation Agent, and their respective
legal advisers);
(c) Appointment of proxy: (i) in the case of an Electronic
Voting Instruction submitted in respect of the relevant Notes, it
gives instructions for the appointment, as its proxy, of two or
more representatives of the Information and Tabulation Agent by the
Registrar to vote in favour of, against or abstain from voting in
respect of the relevant Extraordinary Resolution at the Meeting
(including any adjourned such Meeting) (as specified in the
relevant Electronic Voting Instruction) in respect of all of the
Notes within the Class in its account blocked in the relevant
Clearing System and (ii) in the case of a Form of DTC Sub-Proxy
submitted in respect of USD Notes, it gives instructions for the
appointment, as its proxy, of two or more representatives of the
Information and Tabulation Agent to vote in favour of, against or
abstain from voting in respect of the relevant Extraordinary
Resolution at the Meeting (including any adjourned such Meeting) in
respect of the USD Notes which are the subject of the relevant Form
of DTC Sub-Proxy;
(d) Ratification: it agrees to ratify and confirm each and every
act or thing that may be done or effected by the Issuer, any of its
directors or any person nominated by the Issuer in the proper
exercise of his or her powers and/or authority hereunder;
(e) Further acts: it agrees to do all such acts and things as
are necessary and execute any additional documents deemed by the
Issuer to be desirable, in each case to perfect any of the
authorities expressed to be given hereunder;
(f) Compliance with applicable laws: 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 its participation in the Consent Solicitation in any
jurisdiction and it has not taken or omitted to take any action in
breach of the terms of the Consent Solicitation or which will or
may result in the Issuer, the Administrators, the Solicitation
Agent, the Information and Tabulation Agent, the Trustee, the
Principal Paying Agent, the Reference Agent, the Registrar or any
other person acting in breach of the legal or regulatory
requirements of any such jurisdiction in connection with the
Consent Solicitation;
(g) Successors and assigns: all authority conferred or agreed to
be conferred pursuant to its acknowledgements, agreements,
representations, warranties and undertakings, and all of its
obligations are binding upon its successors, assigns, heirs,
executors, trustees in bankruptcy and legal representatives, and
are not affected by, and will survive, its death or incapacity;
(h) Information or recommendation: none of the Issuer, the
Administrators, the Solicitation Agent, the Information and
Tabulation Agent, the Trustee, the Principal Paying Agent, the
Reference Agent or the Registrar has given it any information with
respect to the Consent Solicitation save as expressly set out in
the Consent Solicitation Memorandum, nor has any of them made any
recommendation to it as to whether it should participate in the
Consent Solicitation and it has made its own decision with regard
to participating in the Consent Solicitation based on any legal,
tax or financial advice it has deemed necessary to seek;
(i) Tax consequences: no information has been provided to it by
the Issuer, the Administrators, the Solicitation Agent, the
Information and Tabulation Agent, the Trustee, the Principal Paying
Agent, the Reference Agent or the Registrar or any of their
respective directors, officers or employees, with regard to the tax
consequences for holders of Notes arising from the participation in
the Consent Solicitation or 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 or the implementation of any Extraordinary
Resolution 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 Administrators, the Solicitation
Agent, the Information and Tabulation Agent, the Trustee, the
Principal Paying Agent, the Reference Agent, the Registrar or any
of their respective directors, officers or employees, or any other
person in respect of such taxes and payments;
(j) No unlawful invitation: it is not a person to whom it is
unlawful to make an invitation pursuant to the Consent
Solicitation, or for it to participate in the Consent Solicitation,
under applicable securities laws, it has not distributed or
forwarded the Consent Solicitation Memorandum or any other
documents or materials relating to the Consent Solicitation to any
such person(s) and it has (before submitting, or arranging for the
submission on its behalf, as the case may be, of an Electronic
Voting Instruction or Form of DTC Sub-Proxy (as applicable) in
respect of its Notes) complied with all laws and regulations
applicable to it for the purposes of its participation in the
Consent Solicitation;
(k) Sanctions: it is not a Sanctions Restricted Person;
(l) Power and authority: it has full power and authority to vote
in the Meeting (or any adjourned such Meeting);
(m) Blocking of Notes in relation to Electronic Voting
Instructions: it holds and will hold, until the earlier of: (i) the
date on which its Electronic Voting Instruction is validly revoked;
(ii) the conclusion of the Meeting (or, if applicable, the
adjourned Meeting); and (iii) the termination of the Consent
Solicitation, the relevant Notes blocked in the relevant Clearing
System and, in accordance with the requirements of, and by the
deadline required by, the relevant Clearing System, it has
submitted, or has caused to be submitted, an Electronic Voting
Instruction to the relevant Clearing System to authorise the
blocking of such Notes, with effect on and from the date of such
submission so that no transfers of such Notes may be effected until
the occurrence of any of the events listed in (i), (ii) or (iii)
above;
(n) Blocking of USD Notes in relation to Forms of DTC Sub-Proxy:
it will not transfer the relevant USD Notes from the date the
relevant Form of DTC Sub-Proxy is submitted until the earlier of
(i) the date on which its Form of DTC Sub-Proxy is validly revoked;
(ii) the conclusion of the Meeting (or, if applicable, the
adjourned Meeting); and (iii) the termination of the Consent
Solicitation;
(o) Notes Outstanding: none of the Notes that are the subject of
the Electronic Voting Instruction or the Form of DTC Sub-Proxy (as
applicable) are held beneficially by or for the account or benefit
of the Issuer, PFPLC, PML, MTS, MTL, any Administrator or any of
their respective subsidiaries or holding companies or other
subsidiaries of such holding companies;
(p) Withdrawal or termination: in the event of a withdrawal or
termination of the Consent Solicitation, the Electronic Voting
Instructions and Forms of DTC Sub-Proxy (as applicable) with
respect to the relevant Notes will be deemed to be withdrawn, and
the relevant Notes will be unblocked in the Direct Participant's
Clearing System account;
(q) Accuracy of information: the information given by or on
behalf of such Noteholder in the Electronic Voting Instruction or
the Form of DTC Sub-Proxy is in all respects true, accurate and not
misleading and will in all respects be true, accurate and not
misleading at the time of the implementation of the relevant
Extraordinary Resolution; and
(r) Indemnity: the Issuer, the Administrators, the Solicitation
Agent, the Trustee, the Principal Paying Agent, the Reference
Agent, the Registrar and the Information and Tabulation Agent will
rely on the truth and accuracy of the foregoing acknowledgements,
agreements, representations, warranties and undertakings and such
holder will indemnify the Issuer, the Administrators, the
Solicitation Agent, the Trustee, the Principal Paying Agent, the
Reference Agent, the Registrar and the Information and Tabulation
Agent against all and any losses, costs, 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 agreements, representations,
warranties and/or undertakings given in connection with the Consent
Solicitation.
The representation set out in paragraph (k) above may 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 at the
relevant time (which for the avoidance of doubt, does not include
the time of submission of the relevant Electronic Voting
Instruction or Form of DTC Sub-Proxy) by reason of breach of: (i)
any provision of Council Regulation (EC) No 2271/1996 of 22
November 1996 (as amended) (or any law or regulation implementing
such Regulation in any member state of the European Union); or (ii)
Council Regulation (EC) No 2271/1996 as it forms part of domestic
law by virtue of the European Union (Withdrawal) Act 2018.
General
Noteholders may obtain, from the date of this Notice, a copy of
the Consent Solicitation Memorandum from the Consent Website or by
contacting the Information and Tabulation Agent, the contact
details for which are set out below. A Noteholder will be required
to produce evidence satisfactory to the Information and Tabulation
Agent that he or she is a person to whom it is lawful to send the
Consent Solicitation Memorandum and to make an invitation to
participate in the Consent Solicitation under applicable laws
before being sent a copy of the Consent Solicitation
Memorandum.
Copies of: (i) the Trust Deed; (ii) this Notice of Meeting; and
(iii) the current drafts of the Supplemental Trust Deed and the
Amendment Agreements as referred to in the Extraordinary
Resolution, are also available from the Consent Website or for
collection by Noteholders on and from the date of this Notice of
Meeting up to and including the date of the Meeting from the
Information and Tabulation Agent, the contact details for which are
set out below, during normal business hours on any weekday
(Saturdays, Sundays and public holidays excepted) up to and
including the date of the Meeting. Any revised versions of the
drafts of the Supplemental Trust Deed and the Amendment Agreements
made available as described above and marked to indicate changes to
the draft made available on the date of this Notice of Meeting will
supersede the previous drafts of the Supplemental Trust Deed and
the Amendment Agreements, and Noteholders will be deemed to have
notice of any such changes.
The attention of Noteholders is particularly drawn to the
procedures for voting, quorum and other requirements for the
passing of the Extraordinary Resolution at the Meeting or any
meeting held following any adjournment of the Meeting, which are
set out in the second paragraph of "Voting and Quorum" below.
Having regard to such requirements, Noteholders are strongly urged
either to attend the Meeting (via teleconference) or to take steps
to be represented at the Meeting (including by way of submitting
Electronic Voting Instructions or Forms of DTC Sub-Proxy in favour
of the Proposal (all such terms as defined in the Consent
Solicitation Memorandum)) as soon as possible.
In light of the ongoing developments in relation to coronavirus
(COVID-19), it may be impossible or inadvisable to hold the Meeting
at a physical location. Therefore, in accordance with the
provisions of the Trust Deed, the Issuer has requested that the
Trustee prescribe appropriate regulations regarding the holding of
the Meeting via teleconference, as further described below. Any
Noteholders who have a Voting Certificate and indicate to the
Information and Tabulation Agent (the contact details for which are
set out below) that they wish to attend the Meeting (via
teleconference) will be provided with further details about
attending the Meeting. Noteholders who do not indicate to the
Information and Tabulation Agent prior to the Meeting that they
wish to attend the Meeting will not be provided with details about
attending the meeting and will not be able to attend the Meeting
whether or not they hold a Voting Certificate.
Noteholders who (i) have submitted Electronic Voting
Instructions (and thereby requested that their votes are included
in the block voting instruction appointing two or more
representatives of the Information and Tabulation Agent as its
proxy to attend the Meeting (and any adjourned Meeting) or (ii) in
respect of the USD Notes, having appointed two or more
representatives of the Information and Tabulation Agent as its
proxy to attend the Meeting (and any adjourned Meeting), and in
each case to vote in the manner specified or identified in such
Electronic Voting Instruction or Form of DTC Sub-Proxy) will be
unaffected by these alternative regulations and will not be
requested to take any further action. The Issuer will take
appropriate steps to ensure that only those who would otherwise be
entitled to attend and vote at a physical meeting will be entitled
to attend the teleconference.
Requirements of U.S. Securities Law
If the Proposal is passed and implemented, the Supplemental
Trust Deed will contain a statement that, until the expiry of the
period of 40 days after the date of the Supplemental Trust Deed,
sales of the Sterling Notes may not be made in the United States or
to U.S. persons outside the United States unless made pursuant to
Rules 903 and 904 of Regulation S. under the Securities Act.
Voting and Quorum
Noteholders who have submitted and not revoked a valid
Electronic Voting Instruction or Form of DTC Sub-Proxy in respect
of the Extraordinary Resolution, by which they will have given
instructions for the appointment of two or more representatives of
the Information and Tabulation Agent by the Registrar as their
proxy to attend and vote (as specified in the relevant Electronic
Vote Instruction) in respect of the Extraordinary Resolution at the
Meeting and any meeting held following any adjournment of the
Meeting, need take no further action to be represented at the
Meeting or any such adjourned meeting. Further details on how to
submit an Electronic Voting Instruction or Form of DTC Sub-Proxy
are set out below.
Noteholders who have not submitted or have submitted and
subsequently revoked an Electronic Voting Instruction or a Form of
DTC Sub-Proxy in respect of the Extraordinary Resolution should
take note of the relevant provisions set out below detailing how
such Noteholders can attend or take steps to be represented at the
Meeting (references to which, for the purpose of such provisions,
include, unless the context otherwise requires, any meeting held
following any adjournment of the Meeting).
1. Subject as set out below, the provisions governing the
convening and holding of a meeting of the Noteholders are set out
in Schedule 3 to the Trust Deed, a copy of which is available for
inspection by the Noteholders as referred to above.
Each person (a beneficial owner) who is the owner of a
particular aggregate Principal Amount Outstanding of the Notes
through Euroclear, Clearstream, DTC or a person who is shown in the
records of Euroclear, Clearstream or DTC as a holder of the Notes
(a "Direct Participant"), should note that a beneficial owner will
only be entitled to attend and vote at the Meeting in accordance
with the procedures set out below and where a beneficial owner is
not a Direct Participant it will need to make the necessary
arrangements, either directly or with the intermediary through
which it holds its Notes, for the Direct Participant to complete
these procedures on its behalf.
For Notes held through Euroclear or Clearstream
A Noteholder who holds their Notes through Euroclear or
Clearstream and wishes to attend and vote at the Meeting and any
adjourned such Meeting in person must have obtained a valid Voting
Certificate issued by the Registrar.
Such Noteholder may obtain a Voting Certificate in respect of
its Notes permitting such Noteholder to attend the Meeting (via
teleconference) by arranging for its Notes to be blocked in an
account with Euroclear or Clearstream (unless the Note is the
subject of a block voting instruction which has been issued and is
outstanding in respect of the Meeting or any adjourned such
Meeting) not less than 48 hours before the time fixed for the
Meeting (or, if applicable, any adjourned such Meeting) and within
the relevant time limit specified by Euroclear, Clearstream or DTC,
as the case may be, upon terms that the Notes will not cease to be
so blocked until the first to occur of the conclusion of the
Meeting or any adjourned such Meeting and the surrender of the
Voting Certificate to the Information and Tabulation Agent and
notification by the Information and Tabulation Agent to Euroclear,
Clearstream or DTC, as the case may be, of such surrender or the
compliance in such other manner with the rules of Euroclear,
Clearstream or DTC, as the case may be.
The Issuer is of the view that a physical meeting is not
desirable at the present time and the Issuer is therefore convening
the Meeting by way of teleconference as opposed to holding a
physical meeting. Details of the teleconference will be provided to
Noteholders requesting Voting Certificates.
A Noteholder not wishing to attend and vote at the Meeting may
either deliver the Voting Certificate to the person whom it wishes
to attend on its behalf or give a voting instruction (in the form
of an electronic voting instruction (an "Electronic Voting
Instruction") in accordance with the standard procedures of
Euroclear or Clearstream) to, and require the Principal Paying
Agent to, include the votes attributable to its Notes in a block
voting instruction issued by the Registrar for the Meeting or any
adjourned such Meeting, in which case the Registrar will appoint a
proxy to attend and vote at such Meeting in accordance with such
Noteholder's instructions.
If a Noteholder wishes the votes attributable to its Notes to be
included in a block voting instruction for the Meeting or any
adjourned such Meeting, then: (i) the Noteholder must arrange for
its Notes to be blocked in an account with Euroclear or Clearstream
for that purpose; and (ii) the Noteholder or a duly authorised
person on its behalf must direct the Principal Paying Agent as to
how those votes are to be cast by way of an Electronic Voting
Instruction, not less than 48 hours before the time fixed for the
Meeting (or, if applicable, any adjourned such Meeting) and within
the time limit specified by Euroclear or Clearstream, as the case
may be, upon terms that the Notes will not cease to be so blocked
until the first to occur of: (i) the conclusion of the Meeting or
any adjourned such Meeting; and (ii) not less than 24 hours before
the time for which the Meeting is convened, the notification in
writing of any revocation of a Noteholder's previous instructions
to the Principal Paying Agent and the same then being notified in
writing by the Registrar to the Issuer and the Trustee and such
Notes ceasing in accordance with the procedures of Euroclear or
Clearstream, as the case may be, and with the agreement of the
Principal Paying Agent to be held to its order or under its
control.
For the above purposes, instructions given by Direct
Participants to the Information and Tabulation Agent through
Euroclear or Clearstream will be deemed to be instructions given to
the Principal Paying Agent.
For Notes held through DTC
DTC Participants appointed as proxies of DTC under the Omnibus
Proxy may, in respect of their DTC Recorded Principal Amount,
appoint any person (including the beneficial owners of the relevant
USD Notes or any other person nominated by any such beneficial
owner) as sub-proxies (each such appointee a "Sub-Proxy"), to
attend and vote at the Meeting on their behalf. Any such
appointment must be made by an instrument in writing in the English
language, substantially in the form set out in Annex 3 (Form of DTC
Sub-Proxy) of this Notice, signed by the relevant DTC Participant
or, in the case of a corporation, executed under its common seal or
signed on its behalf by an attorney or a duly authorised officer of
the corporation (a "Form of DTC Sub-Proxy"). Forms of DTC Sub-Proxy
should by delivered by email to the Information and Tabulation
Agent at its email address set forth at the end of this Notice. The
Issuer shall have the right to determine whether any Forms of DTC
Sub-Proxy are validly delivered, and any such determination shall
be final and binding on the Noteholder who delivered such Form of
DTC Sub-Proxy. A valid Form of DTC Sub-Proxy must be delivered to
the Information and Tabulation Agent not later than 24 hours before
the time appointed for holding the Meeting.
Only DTC Participants appointed as proxies of DTC under the
Omnibus Proxy may execute and deliver Forms of DTC Sub-Proxy. Any
beneficial owner of USD Notes whose USD Notes are held through a
broker, dealer, commercial bank, trust company or other nominee and
who wishes to have a Form of DTC Sub-Proxy delivered on its behalf
should contact the holder of its USD Notes promptly and instruct
such holder to attend the Meeting on its behalf or to issue its own
Form of DTC Sub-Proxy to permit another person to act on its
behalf.
All Forms of DTC Sub-Proxy that are properly completed, signed
and delivered to the Information and Tabulation Agent (and not
revoked), will be given effect in accordance with the provisions
thereof.
Forms of DTC Sub-Proxy will expire if the relevant Extraordinary
Resolution has not been passed on or after the date on which the
Meeting (or adjourned such Meeting) has been held.
The method of delivery of all documents, including Forms of DTC
Sub-Proxy and revocations, is at the election and risk of the
Noteholder. In no event should a Noteholder deliver certificates
evidencing such Noteholder's USD Notes. All of the above dates are
subject to earlier deadlines that may be set by any DTC Participant
or other intermediary. The Issuer reserves the right to receive
Forms of DTC Sub-Proxy in relation to the relevant Extraordinary
Resolution by any other reasonable means or in any form that
reasonably evidences the giving of a Form of DTC Sub-Proxy.
DTC Participants appointed as proxies of DTC under the Omnibus
Proxy shall remain entitled to deliver Forms of DTC Sub-Proxy
notwithstanding any transfer of USD Notes after the DTC Record
Date, provided that votes submitted by any DTC Participant and any
Sub-Proxies appointed by that DTC Participant shall not exceed the
holding of such DTC Participant as evidenced by the Omnibus Proxy
issue as of the DTC Record Date.
2. As the proposed amendment is a Basic Terms Modification (as
defined in the Trust Deed), the quorum required for the
Extraordinary Resolution to be considered at the Meeting is two or
more persons present (including by teleconference) and holding or
representing greater than 75 per cent. of the aggregate GBP
Equivalent Initial Principal Amount of the Notes for the time being
outstanding.
In the event such quorum is not present (including by
teleconference) within 15 minutes from the time initially fixed for
a Meeting, such Meeting will be adjourned until such date, not less
than 14 nor more than 42 days later, to be held via teleconference.
At any such adjourned Meeting two or more persons present
(including by teleconference) and holding or representing greater
than 25 per cent. of the aggregate GBP Equivalent Initial Principal
Amount of the Notes then outstanding will form a quorum.
Voting Certificates obtained and Electronic Voting Instructions
and Forms of DTC Sub-Proxy given in respect of any Meeting (unless
revoked in accordance with the terms of the Trust Deed and, in the
case of Electronic Voting Instructions, in accordance with the
procedures of the Euroclear or Clearstream, as the case may be)
will remain valid for any such adjourned Meeting.
Noteholders should note these quorum requirements and should be
aware that, if the Noteholders either present (including by
teleconference) or appropriately represented at the Meeting are
insufficient to form a quorum for the Extraordinary Resolution, the
Extraordinary Resolution cannot be formally considered at such
Meeting. Noteholders are therefore encouraged either to attend the
Meeting (via teleconference) or to arrange to be represented at the
Meeting as soon as possible.
3. Every question submitted to a Meeting will be decided in the
first instance by a show of hands and in case of equality of votes
the chairman of the Meeting will, both on a show of hands and on a
poll, have a casting vote in addition to the vote or votes (if any)
to which he may be entitled as a holder of a Voting Certificate or
as a proxy or as a representative.
Unless a poll is (before, or on the declaration of the result
of, the show of hands) demanded by the chairman of the Meeting, the
chairman of the Meeting or the Issuer or by two or more persons
present holding or representing not less than 2 per cent. of the
aggregate GBP Equivalent Initial Principal Amount of the Notes then
outstanding, a declaration by the chairman of the Meeting that a
resolution has been carried or carried by a particular majority or
lost or not carried by a particular majority will be conclusive
evidence of the fact without proof of the number or proportion of
the votes recorded in favour or against (or abstentions from voting
in respect of) such resolution.
On a show of hands every person who is present and is a holder
of Notes or is a proxy or representative will have one vote. On a
poll every such person will have one vote in respect of each GBP1
in principal amount of the GBP Equivalent Initial Principal Amount
of the Notes then outstanding so produced or represented by the
Voting Certificate so produced or in respect of which he is a
proxy.
4. To be passed at the Meeting, the Extraordinary Resolution
requires a majority consisting of not less than 75 per cent. of the
persons voting thereat upon a show of hands or if a poll be duly
demanded then by a majority consisting of not less than 75 per
cent. of the votes given on such poll. If passed, the Extraordinary
Resolution will be binding on all Noteholders, whether or not
present at the Meeting at which it is passed and whether or not
voting.
This Notice is given by Paragon Mortgages (No. 12) plc.
Noteholders should contact the following for further
information:
The Solicitation Agent
Lloyds Bank Corporate Markets plc
10 Gresham Street
London EC2V 7AE
Telephone: +44 20 7158 1719/1726
Attention: Liability Management Team, Commercial Banking
Email: liability.management@lloydsbanking.com
The Information and Tabulation Agent
Citibank, N.A., London Branch
Citigroup Centre
Canada Square
London E14 5LB
Telephone: +44 (0)20 7508 3867
Attention: Exchange Team
Email: citiexchanges@citi.com
Consent Website:
https://debtxportal.issuerservices.citigroup.com
Dated: 7 January 2022
ANNEX 1 TO THE NOTICE OF MEETING - COMPOUNDED DAILY SONIA AND
BASE RATE MODIFICATION
Please refer to
http://www.rns-pdf.londonstockexchange.com/rns/8264X_1-2022-1-7.pdf
for the Compounded Daily SONIA and Base Rate Modification
provisions proposed in relation to this Notice.
ANNEX 2 TO THE NOTICE OF MEETING - MARGIN ADJUSTMENT
Rationale for the Noteholder Proposal and Margin Adjustment
The formula for calculating interest on the Sterling Notes will
be as set out in Annex 1 (Compounded Daily SONIA and Base Rate
Modification) to the Notice of Meeting. Due to the differences in
the nature of Sterling LIBOR and SONIA, the replacement of Sterling
LIBOR as the reference rate for the Sterling Notes requires a
corresponding credit adjustment spread to the existing Notes
Interest Rate Margin payable in respect of the Sterling Notes. The
Proposal uses the "5-year historical median" methodology agreed by
the International Swaps and Derivatives Association for determining
this credit adjustment spread and recommended by the Working Group
for use in cash products such as the Sterling Notes. It involves
taking the median of the daily difference between Sterling LIBOR
and SONIA in the 5 years leading up to the LIBOR Announcement Date.
Using this methodology, the credit adjustment spread for 3-month
Sterling LIBOR is 0.1193 per cent., as calculated and published by
Bloomberg Index Services Limited on the LIBOR Announcement Date and
as referenced on Bloomberg screen "SBP0003M Index" on the date of
this Notice.
If the Proposal is implemented, the Rate of Interest in respect
of the Sterling Notes for each Interest Period commencing on or
after the Effective Date (being the Interest Payment Date for the
Sterling Notes falling in February 2022) will be determined by
reference to Compounded Daily SONIA. The first Interest Payment
Date on which the amounts of interest payable on the Sterling Notes
will be determined by reference to Compounded Daily SONIA rather
than LIBOR will be the Interest Payment Date falling in May 2022 in
respect of the Interest Period from (and including) the Interest
Payment Date falling in February 2022 up to (but excluding) the
Interest Payment Date falling in May 2022.
If the Proposal is implemented, the sterling amounts payable by
the Issuer under the cross-currency swaps in respect of the
Non-Sterling Notes on or after the Effective Date will be
determined by reference to Compounded Daily SONIA.
If the Proposal is not implemented, the Sterling Notes will
remain outstanding and the Sterling Notes and the cross-currency
swaps will continue to pay amounts with reference to Sterling LIBOR
and be subject to the implementation of synthetic LIBOR pursuant to
the Critical Benchmarks (References and Administrators' Liability)
Act 2021. Under the Financial Services Act 2021, the FCA was given
new powers to compel the continued publication of certain LIBOR
tenors using a changed methodology (a "synthetic" LIBOR). The FCA
has indicated that it intends to use its powers to compel ICE
Benchmark Administration Limited to publish 3 month Sterling LIBOR
on a synthetic basis, but that the ongoing availability of
synthetic LIBOR beyond 2022 cannot be assured and such rate would
not be representative of an underlying market. Furthermore, the FCA
has communicated that issuers and asset managers should proactively
transition away from LIBOR-linked securities.
For the avoidance of doubt, irrespective of whether or not the
Proposal is implemented, the Rate of Interest paid in respect of
the Sterling Notes on or before the Effective Date will continue to
be determined by reference to 3 month Sterling LIBOR.
The Margin Adjustment
In respect of the Sterling Notes, the Rate of Interest that will
be effective from the Effective Date will be equal to Compounded
Daily SONIA plus the relevant New Margin.
"New Margin" means:
A. the Class A1 Current Margin[1] / the Class A2a Current
Margin[2] / Class B1a Current Margin[3] / Class C1a Current
Margin[4]; plus
B. the Margin Adjustment,
where:
"Class A1 Current Margin" means 0.24 per cent.;
"Class A2a Current Margin" means 0.24 per cent.;
"Class B1a Current Margin" means 0.48 per cent.;
"Class C1a Current Margin" means 0.92 per cent.; and
"Margin Adjustment" means 0.1193 per cent.
The detailed provisions relating to the calculation of
Compounded Daily SONIA are set out in the Supplemental Trust
Deed.
ANNEX 3 TO THE NOTICE OF MEETING - FORM OF DTC SUB-PROXY
THIS FORM OF DTC SUB-PROXY MUST ONLY BE COMPLETED BY A DTC
PARTICIPANT. IF YOU ARE NOT A DTC PARTICIPANT, YOU MUST ARRANGE FOR
THE DTC PARTICIPANT IN WHOSE SECURITY RECORD THE USD NOTES IN
RESPECT OF WHICH YOU HAVE A BENEFICIAL INTEREST ARE RECORDED TO
COMPLETE AND DELIVER THIS FORM OF DTC SUB-PROXY ON YOUR BEHALF AND
IN ACCORDANCE WITH YOUR INSTRUCTIONS TO THE INFORMATION AND
TABULATION AGENT BEFORE THE APPLICABLE DEADLINE.
PARAGON MORTGAGES (NO. 12) PLC
(incorporated in England and Wales with limited liability under
registered number 5386924)
(the " Issuer ")
FORM OF DTC SUB-PROXY
in respect of the Notes of the Issuer listed below
ISIN/ Common
Description of Code / CUSIP Aggregate Principal Current Interest
Notes Number (if applicable) Amount Outstanding Rate
---------------- ------------------------ -------------------- ------------------
Class A2c Notes Rule 144A Note: U.S.$93,871,307 3 month USD LIBOR
due 2038 (the US69913BAB27 + Notes Interest
"Notes") / 26165580 / Rate Margin
69913B AB 2
Reg S Note:
XS0261647027
/ 26164702
To: Citibank, N.A., London Branch as Information and Tabulation
Agent
Unless otherwise defined, capitalised terms used in this Form of
DTC Sub-Proxy have the meaning given in the notice of meetings (the
"Notice") dated 7 January 2022 prepared by the Issuer in connection
with the USD Notes and certain other Classes of its Notes.
The Notice contains important information which should be read
carefully before any decision is made with respect to this Form of
DTC Sub-Proxy. If Noteholders are in any doubt as to the action
they should take, they should seek their own financial and legal
advice, including in respect of any tax consequences, immediately
from their broker, bank manager, solicitor, accountant or other
independent financial, tax or legal adviser.
1. Details of DTC Participant:
Name: ....................................................................
.................
Address: ....................................................................
.................
DTC Account Number: ....................................................................
.................
Telephone Number: ....................................................................
.................
Email address: ....................................................................
.................
---------------------------------------------- ----------------------------------------------------------------------
2. Details of USD Notes which are the subject of this Form
of DTC Sub-Proxy:
CUSIP: 69913B AB2 (Class A2c Notes)
U.S.$.....................................................................
in DTC Recorded Principal Amount of U.S.$311,000,000 Class
A2c Notes due 2038
3. Directions for the relevant Extraordinary Resolution:
Tick (and complete, if applicable) whichever of the following
apply:
I/We hereby appoint two or more representatives
of the Information and Tabulation Agent
as my/our proxy to vote in respect of the
above Class A2c Notes at the Meeting in
accordance with the following directions.
I/We appoint..................................................................
as my/our proxy to vote in respect of the
above Class A2c Notes at the Meeting in
accordance with the following directions.
I/we confirm that I/we wish to:
abstain from voting in respect of the Extraordinary
Resolution
vote in favour of the Extraordinary Resolution
vote against the Extraordinary Resolution
EXTRAORDINARY RESOLUTION
IN RESPECT OF THE CLASS A2c NOTES DUE 2038
(144A NOTE: ISIN: US69913BAB27, COMMON CODE: 26165580,
CUSIP NUMBER: 69913B AB2; REG S NOTE: ISIN: XS0261647027,
COMMON CODE: 26164702) .
"THAT this meeting of the holders of the outstanding U.S.$311,000,000
Class A2c Notes due 2038 (the "Notes"), issued by Paragon
Mortgages (No. 12) plc (the "Issuer") and constituted by
the trust deed dated 20 July 2006 and amended on 30 January
2013 and 15 May 2019 (the "Trust Deed"), made between,
inter alios, the Issuer and Citicorp Trustee Company Limited
(the "Trustee") as trustee for the holders of the Notes
(the "Noteholders"), hereby:
1. (subject to paragraph 7 of this Extraordinary Resolution)
assents to the modification of: (A) the terms and conditions
of the Notes (the "Conditions") to provide for the replacement
of LIBOR with SONIA as the reference rate for calculating
interest in respect of the Sterling Notes for each Interest
Period (as defined in the Conditions) commencing on or
after the Effective Date, the inclusion of new fallbacks
to address the non-availability of SONIA or the replacement
of SONIA and certain other related amendments so that the
relevant provisions of the Conditions will be in the form
set out in the draft Supplemental Trust Deed (as defined
below); (B) the terms of the Subordinated Loan, the Administration
Agreement, the Substitute Administrator Agreement and the
Substitute Administrator Facilitator Agreement pursuant
to the Relevant Documents Amendment Agreement to reflect
the change to the interest rate basis of the Sterling Notes;
and (C) the terms of each Swap Transaction to hedge the
interest rate and currency risk in respect of the Non-Sterling
Notes;
2. (subject to paragraph 7 of this Extraordinary Resolution)
authorises, directs, requests and empowers the Issuer and
the Trustee to: (a) consent to and execute: (i) a supplemental
trust deed (the "Supplemental Trust Deed"); and (ii) the
Amendment Agreements, in each case in the form or substantially
in the forms of the drafts produced to this Meeting, with
such amendments thereto (if any) as the Trustee requires
or agrees to give effect to the changes referred to in
paragraph 1 of this Extraordinary Resolution and such other
changes as may be necessary in its sole opinion; and (b)
execute and do all such other deeds, instruments, acts
and things as may be necessary in the Trustee's sole opinion
to carry out and to give effect to this Extraordinary Resolution
and the implementation of the modifications referred to
in this Extraordinary Resolution;
3. (subject to paragraph 7 of this Extraordinary Resolution)
sanctions and assents to every abrogation, modification
or compromise of, or arrangement in respect of, the rights
of the Noteholders against the Issuer appertaining to the
Notes, each Swap Transaction, the Subordinated Loan, the
Administration Agreement, the Substitute Administrator
Agreement and the Substitute Administrator Facilitator
Agreement, whether or not such rights arise under the Conditions,
the Trust Deed or any other transaction documents, involved
in or resulting from or to be effected by, the modifications
referred to in paragraphs 1 and 2 of this Extraordinary
Resolution and their implementation;
4. (a) holds harmless, discharges and exonerates the Trustee
from, and indemnifies the Trustee against, any and all
liability for which it may have become or may become responsible
under the Trust Deed, any other Relevant Document or the
Notes in respect of any act or omission in connection with
the proposal by the Issuer to the Noteholders to approve
the modification of the Conditions and the consequential
or related amendments to certain transaction documents,
in the manner set out in the Notice (the "Proposal"), this
Extraordinary Resolution or its implementation and/or the
modifications; and (b) irrevocably waives any claim against
the Issuer or the Trustee which arises as a result of any
loss or damage to the holders of the Notes suffered or
incurred as a result of the Issuer or the Trustee following
the terms of this Extraordinary Resolution (including for
the avoidance of doubt, the directions and/or instructions
contained herein), even though it may subsequently be found
that there is a defect in this Extraordinary Resolution
or that for any reason this Extraordinary Resolution is
not valid or binding upon the holders of the Notes;
5. agrees that the Trustee is not responsible for the accuracy,
completeness, validity or correctness of the statements
made and documents referred to in this Extraordinary Resolution
and the Consent Solicitation Memorandum or any omissions
from this Extraordinary Resolution or the Consent Solicitation
Memorandum;
6. confirms that the Trustee is hereby authorised and instructed
not to obtain any legal opinions in relation to, or to
enquire into the power and capacity of any person to enter
into, the Amendment Agreements or the Supplemental Trust
Deed or the due execution and delivery thereof by any party
thereto or the validity or enforceability thereof and it
will not be liable for any consequences resulting from
this instruction;
7. declares that the implementation of this Extraordinary
Resolution is conditional on:
(a) the Consent Solicitation (as defined below) not having
been terminated; and
(b) the passing of this Extraordinary Resolution and the
passing of, and the satisfaction of any conditions referred
to in, the corresponding Extraordinary Resolution in respect
of each other Class listed in paragraph 8 of this Extraordinary
Resolution; and
8. acknowledges that the following terms, as used in this
Extraordinary Resolution, have the following meanings given
below:
"Administration Agreement" means the administration agreement
dated 20 July 2006 and amended on 30 January 2013 between
Paragon Finance plc, Mortgage Trust Services plc, the Issuer,
Paragon Mortgages Limited, Mortgage Trust Limited and the
Trustee;
"Amendment Agreements" means the Swap Amended and Restated
Confirmations and the Relevant Documents Amendment Agreement;
"Class" means each of the Class A1 Notes, the Class A2a
Notes, the Class A2b Notes, the Class A2c Notes, the Class
B1a Notes, the Class B1b Notes and the Class C1a Notes
and Class C1b Notes;
"Class A1 Notes" means the U.S.$1,500,000,000 Class A1
Notes due 2038 issued by the Issuer which, on 15 May 2019
were (simultaneously with the termination of the currency
swap A1 agreement dated 14 July 2006) converted into a
GBP Equivalent at a fixed exchange rate of USD to GBP of
1.84, producing GBP Equivalent Initial Principal Amount
of GBP815,217,391.30 and an A1 Note Mandatory Transfer
Price and GBP Equivalent Principal Amount Outstanding of
GBP317,409,456.52 in accordance with the A1 Note Conditional
Purchase Agreement and which, on 15 May 2019, were redenominated
as GBP Class A1 Notes;
"Class A2a Notes" means the GBP145,000,000 Class A2a Notes
due 2038 issued by the Issuer;
"Class A2b Notes" means the EUR245,000,000 Class A2b Notes
due 2038 issued by the Issuer;
"Class A2c Notes" means the U.S.$311,000,000 Class A2c
Notes due 2038 issued by the Issuer;
"Class B1a Notes" means the GBP25,000,000 Class B1a Notes
due 2038 issued by the Issuer;
"Class B1b Notes" means the EUR126,000,000 Class B1b Notes
due 2038 issued by the Issuer;
"Class C1a Notes" means the GBP17,000,000 Class C1a Notes
due 2038 issued by the Issuer;
"Class C1b Notes" means the EUR106,000,000 Class C1b Notes
due 2038 issued by the Issuer;
"Consent Solicitation" means the invitation by the Issuer
to, among others, the Noteholders to consent to the modification
of the Conditions relating to the Notes and other related
documents, as described in the Consent Solicitation Memorandum
and as the same may be amended in accordance with its terms;
"Consent Solicitation Memorandum" means the consent solicitation
memorandum dated 7 January 2022 prepared by the Issuer
in relation to the Consent Solicitation;
"Effective Date" means the Interest Payment Date (as defined
in the Conditions) falling in February 2022;
"Non-Sterling Notes" means the issuances of notes by the
Issuer that are not Sterling Notes;
"Notice" means the notice given by the Issuer to Noteholders
on or around 7 January 2022;
"Relevant Documents Amendment Agreement" means the amendment
and restatement deed that will amend and restate the terms
of the Administration Agreement, Subordinated Loan Agreement,
Substitute Administrator Agreement and Substitute Administrator
Facilitator Agreement to reflect this Extraordinary Resolution
and such other changes as may be necessary to implement
the modifications referred to in this Extraordinary Resolution;
"Sterling Notes" means the Class A1 Notes, the Class A2a
Notes, the Class B1a Notes and the Class C1a Notes;
"Substitute Administrator Agreement" means the substitute
administrator agreement dated 20 July 2006 and amended
on 30 January 2013 between Paragon Finance plc, Mortgage
Trust Services plc, the Issuer, the Trustee and Homeloan
Management Limited;
"Substitute Administrator Facilitator Agreement" means
the substitute administrator facilitator agreement dated
30 January 2013 between the Issuer, the Trustee and Intertrust
Management Limited (formerly Structured Finance Management
Limited) as substitute administrator facilitator, as modified,
novated, supplemented or replaced from time to time;
"Subordinated Loan" means the subordinated loan advanced
to the Issuer from time to time under the terms of a subordinated
loan agreement dated 20 July 2006 and amended on 26 June
2019 between the Issuer, the Trustee, Mortgage Trust Services
plc and Paragon Finance plc;
"Swap Transaction" means, in respect of the:
1. Class A2b Notes: the currency swap transaction between
the Issuer and Barclays Bank PLC with a trade date of 14
July 2006;
2. Class A2c Notes: the currency swap transaction between
the Issuer and Barclays Bank PLC with a trade date of 14
July 2006;
3. Class B1b Notes: the currency swap transaction between
the Issuer and Barclays Bank PLC with a trade date of 14
July 2006; and
4. Class C1b Notes: the currency swap transaction between
the Issuer and Barclays Bank PLC with a trade date of 14
July 2006,
each a "Swap Transaction" and together the "Swap Transactions";
and
"Swap Amended and Restated Confirmations" means the confirmations
that will amend and restate the terms of the Swap Transactions
to reflect this Extraordinary Resolution and such other
changes as may be necessary to implement the modifications
referred to in this Extraordinary Resolution."
For Against
--------------------------------------------------------------------
U.S.$ ..................... U.S.$ .....................
[insert DTC Recorded Principal [insert DTC Recorded Principal
Amount of Class A2c Notes voting Amount of Class A2c Notes
in favour of the Extraordinary voting against the Extraordinary
Resolution] Resolution]
--------------------------------------------------------------------
8. SIGN
Signed by a duly authorised officer
on behalf of the DTC Direct Participant: ...................................................................
Name of DTC Direct Participant: ...................................................................
Date: ...................................................................
MEDALLION SIGNATURE GUARANTEE
Authorised Signature of Guarantor: ...................................................................
Name (please print): ...................................................................
Name of Firm: ...................................................................
Address: ...................................................................
Telephone Number with Area Code Date: ...................................................................
Place Seal Here
PLEASE ENTER HERE A DAYTIME TELEPHONE NUMBER (INCLUDING
INTERNATIONAL DIALING CODE) WHERE YOU CAN BE REACHED IN
THE EVENT OF A QUERY ARISING FROM COMPLETION OF THIS
FORM
OF DTC SUB-PROXY:
........................................................
.......
Once duly completed and signed, Forms of DTC Sub-Proxy should be
delivered along with any power of attorney or other authority (if
any) under which it is signed to the Information and Tabulation
Agent using the details below. The method of delivery of Forms of
DTC Sub-Proxy to the Information and Tabulation Agent is at the
relevant DTC Participant's election and risk. In all cases such DTC
Participant's should allow sufficient time to assure delivery
before any applicable deadlines described in the Notice.
INFORMATION AND TABULATION AGENT
Citibank, N.A., London Branch
Citigroup Centre
Canada Square
London E14 5LB
Telephone: +44 (0)20 7508 3867
Attention: Exchange Team
Email: citiexchanges@citi.com
[1] Applicable to the Class A1 Notes.
[2] Applicable to the Class A2a Notes.
[3] Applicable to the Class B1a Notes.
[4] Applicable to the Class C1a Notes.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
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END
NOGZZGGMKNVGZZM
(END) Dow Jones Newswires
January 07, 2022 10:37 ET (15:37 GMT)
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