TIDM39PV
RNS Number : 5574H
Equity Release Funding (No.3) PLC
04 August 2021
NOTICE OF RESULTS AND of Adjourned meeting
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.
EQUITY RELEASE FUNDING (NO.3) PLC
(incorporated in England and Wales with limited liability under
registered number 4701147)
(the "Issuer")
NOTICE OF RESULTS AND OF ADJOURNMENT OF MEETING
of the holders of the outstanding Notes of the Issuer listed
below
Current Rate
Aggregate of Interest
Description Principal (per cent.
of Notes ISIN Common Code Amount Outstanding per annum)
-------------------- ------------- ------------ -------------------- --------------
GBP42,000,000 XS0169951000 016995100 GBP42,000,000 Three month
Class B Mortgage Sterling
Backed Floating LIBOR + 3.50
Rate Notes due per cent.
2038 (the "Notes") Floating
Rate
NOTICE IS HEREBY GIVEN that at the meeting (the "Original
Meeting") of the holders of the Notes (the "Noteholders") convened
by the Issuer held via teleconference on 4 August 2021 98% of all
Electronic Voting Instructions received were in favour of the
Extraordinary Resolution, however the required quorum was not met.
As such, the Chairman directed that the Original Meeting be
adjourned and that the adjourned meeting be held via teleconference
on 24 August 2021 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 27 June 2003, as modified,
supplemented and/or restated from time to time, 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"). Noteholders should note that, at the
adjourned Meeting, two or more persons present holding or
representing not less than one quarter of the aggregate principal
amount of the Notes for the time being outstanding shall form a
quorum and shall have the power to pass the Extraordinary
Resolution.
The Meeting will commence at 10.00 a.m. (London Time).
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).
References herein to the "Meeting" are to the adjourned meeting
convened hereby of the Noteholders.
In light of the adjournment, the Implementation Date (as defined
in the Consent Solicitation Memorandum), being the date on which
the Supplemental Trust Deed in respect of each Series of Notes
and/or the Amendment Deed (as applicable) is executed by the
relevant parties, is expected to be as soon as reasonably
practicable after the announcement of the results of the Meeting
(if the relevant Extraordinary Resolution is passed at the Meeting
and the Eligibility Condition in respect of such Extraordinary
Resolution has been satisfied).
The Extraordinary Resolution being put to the Meeting is
identical to that put to the Original Meeting. As such, any Voting
Certificates obtained and Electronic Voting Instructions given in
respect of the Original 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, Luxembourg, as the case may be) shall remain valid for
the adjourned Meeting.
EXTRAORDINARY RESOLUTION
IN RESPECT OF THE CLASS B NOTES DUE 2038 (XS0169951000)
"THAT this meeting of the holders of the outstanding
GBP42,000,000 Class B Notes due 2038 of Equity Release Funding
(No.3) PLC (the "Notes" and the "Issuer" respectively) constituted
by the trust deed dated 27 June 2003, as modified, supplemented
and/or restated from time to time (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 8 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 Notes and certain other related amendments so that
the relevant provisions of the Conditions will be in the form set
out in "Annex C - Form of Amended Conditions" of the Consent
Solicitation Memorandum; and (B) the terms of the ERF3 Relevant
Documents pursuant to the Amendment Deed to reflect the change to
the interest rate basis of the Notes;
2. (subject to paragraph 8 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 substantially in the form set out in "Annex B - Form of
Supplemental Trust Deed" of the Consent Solicitation Memorandum and
(ii) the Amendment Deed substantially in the form set out in "Annex
D - Form of Amendment Deed" of the Consent Solicitation Memorandum,
in each case to give effect to the changes referred to in paragraph
1 of this Extraordinary Resolution and such other changes as may be
necessary, desirable or expedient in its sole opinion, and (b)
execute and do all such other 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 this
Extraordinary Resolution;
3. (subject to paragraph 8 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 and the
ERF3 Relevant Documents, 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. agrees that capitalised terms in this Extraordinary
Resolution where not defined herein shall have the meanings given
to them in the Consent Solicitation Memorandum (a copy of which is
available for inspection by Eligible Noteholders as referred to in
the Notice);
5. (a) 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 or
the Notes in respect of any act or omission in connection with 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;
6. 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;
7. 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
Deed or the Supplemental Trust Deed or the due execution and
delivery thereof by any party thereto or the validity or
enforceability thereof and they shall not be liable for any
consequences resulting from this instruction;
8. declares that the implementation of this Extraordinary
Resolution shall be conditional on:
(a) the Consent Solicitation (as defined below) not having been terminated;
(b) the passing of this Extraordinary Resolution;
(c) 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, if the Extraordinary Resolution is passed at
this Meeting but such condition is not satisfied, the chairman of
this Meeting and the Trustee are hereby authorised, directed,
requested and empowered to adjourn this Meeting for such period
being not less than 14 days nor more than 42 days, to be held via
teleconference, for the purpose of reconsidering Resolutions 1 to 9
of this Extraordinary Resolution with the exception of this
resolution 8(c) of this Extraordinary Resolution. At any such
adjournment of this Meeting, two or more persons present holding or
representing not less than one quarter of the aggregate principal
amount of the Notes for the time being outstanding shall form a
quorum and shall have the power to pass the Extraordinary
Resolution, and this condition set out in this paragraph 8(c) 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; and
9. acknowledges that the following terms, as used in this
Extraordinary Resolution, shall have the following meanings given
below:
"Consent Solicitation" means the invitation by the Issuer to
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 13 July 2021 prepared by the Issuer in relation to
the Consent Solicitation;
"Eligible Noteholders" means a Noteholder who is (a) located and
resident outside the United States and is not a U.S. person (as
defined in Regulation S under the U.S. Securities Act of 1933, as
amended), (b) an eligible counterparty or a professional client
(each as defined in Directive 2014/65/EU) and, if applicable, 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;
"ERF3 Relevant Documents" has the meaning given in the Consent
Solicitation Memorandum; and
"Ineligible Noteholders" means a Noteholder that is not an
Eligible Noteholder."
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 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; and
(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.
(a) to (f) of the above 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.
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 of the Notes to consider and resolve, if
they think fit, to approve the Proposal by way of an Extraordinary
Resolution in relation to the Notes, implementing respective
changes in the interest basis specified in the Conditions from
LIBOR to SONIA, and corresponding and/or consequential amendments
(if any) to the ERF3 Relevant Documents.
The formula for calculating interest on the Notes shall be as
set out in Annex 1 to the Notice of Meeting. Due to the differences
in the nature of LIBOR and SONIA, the replacement of LIBOR as the
reference rate for the Notes requires a corresponding credit
adjustment spread to the existing Relevant Margin payable in
respect of the Notes. The Proposal use the "5-year historical
median" methodology agreed by ISDA for determining this credit
adjustment spread and recommended by the Working Group for use in
cash products such as the Notes. It involves taking the median of
the daily difference between LIBOR and SONIA compounded over the
corresponding period 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 as of the date of this Consent Solicitation
Memorandum.
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, or against, 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, or against, 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 of
Meeting. On the basis of the information set out in this Notice of
Meeting (other than Annex 2 (Margin Adjustment) of the Notice of
Meeting 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.
Consent Solicitation
The Issuer has invited holders of the Notes (the "Consent
Solicitation") to consent to the approval, by Extraordinary
Resolution at the Meeting, of the modification of the Conditions
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).
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 Eligible
Noteholders (as defined in the Extraordinary Resolution above).
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.
General
Eligible 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. A
Noteholder will be required to produce evidence satisfactory to the
Tabulation Agent as to his or her status as an Eligible Noteholder
and 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.
In addition, an investor presentation in respect of the Consent
Solicitation is available to Eligible Noteholders at
https://dealroadshow.com/e/ERF2021 (Entry code: ERF2021).
Copies of (i) the Trust Deed, (ii) this Notice of Meeting and
(iii) the current drafts of the Supplemental Trust Deed and the
Amendment Deed as referred to in the Extraordinary Resolution, are
also available for inspection by Noteholders on and from the date
of this Notice of Meeting up to and including the date of the
Meeting, at the specified offices of the Tabulation Agent during
normal business hours on any weekday (Saturdays, Sundays and public
holidays excepted) up to and including the date of the Meeting and
(b) at the Meeting. Any revised versions of the drafts of the
Supplemental Trust Deed and the Amendment Deed 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
Deed, 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 in favour of the relevant 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
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 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 have submitted Electronic Voting Instructions
(and thereby requested that their votes are included in a form of
proxy appointing one or more representatives of the Tabulation
Agent as its proxy to attend the Meeting (and any adjourned
Meeting) and to vote in the manner specified or identified in such
Electronic Voting Instruction) 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.
Voting and Quorum
Noteholders who have submitted and not revoked (in the limited
circumstances in which revocation is permitted) a valid Electronic
Voting Instruction in respect of the Extraordinary Resolution, by
which they will have given instructions for the appointment of one
or more representatives of the Tabulation Agent by Principal Paying
Agent 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 are set out below.
Noteholders who have not submitted or have submitted and
subsequently revoked (in the limited circumstances in which such
revocation is permitted) an Electronic Voting Instruction 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 4 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 of the Notes through
Euroclear, Clearstream, Luxembourg or a person who is shown in the
records of Euroclear or Clearstream, Luxembourg 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.
A Noteholder who 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 Principal Paying Agent.
A Noteholder may obtain a Voting Certificate in respect of its
Notes from the Tabulation Agent by arranging for its Notes to be
blocked in an account with Euroclear or Clearstream, Luxembourg
(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
or Clearstream, Luxembourg, 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 Tabulation Agent and
notification by the Tabulation Agent to Euroclear or Clearstream,
Luxembourg, as the case may be, of such surrender or the compliance
in such other manner with the rules of Euroclear or Clearstream,
Luxembourg, as the case may be.
The Issuer notes that in accordance with advice issued by the
U.K. government following the COVID- 19 outbreak, non-essential
meetings continue to be discouraged under the guidance and that
there continue to be restrictions on the number of people that can
meet indoors. 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 and/or Clearstream, Luxembourg) to, and require the
Principal Paying Agent to, include the votes attributable to its
Notes in a block voting instruction issued by the Principal Paying
Agent for the Meeting or any adjourned such Meeting, in which case
the Principal Paying Agent shall 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, Luxembourg 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, Luxembourg, 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 Principal Paying
Agent to the Issuer and the Trustee and such Notes ceasing in
accordance with the procedures of Euroclear or Clearstream,
Luxembourg, as the case may be, and with the agreement of the
Principal Paying Agent to be held to its order or under its
control.
Each Noteholder which arranges for an Electronic Voting
Instruction to be submitted must also confirm in such Electronic
Voting Instruction whether it is an Eligible Noteholder or an
Ineligible Noteholder. Noteholders voting pursuant to forms of
proxy will also be required to confirm whether they are an Eligible
Noteholder or an Ineligible Noteholder.
For the above purposes, instructions given by Direct
Participants to the Tabulation Agent through Euroclear or
Clearstream, Luxembourg will be deemed to be instructions given to
the Principal Paying Agent.
2. As the proposed amendment is a Basic Terms Modification (as
defined in the Trust Deed), the quorum required for each
Extraordinary Resolution to be considered at the Meeting is two or
more persons present (including by teleconference) and holding or
representing in the aggregate not less than one quarter of the
aggregate principal amount of the Notes of the relevant Series for
the time being outstanding.
In the event such quorum is not present (including by
teleconference) within 30 minutes from the time initially fixed for
a Meeting, such Meeting shall 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
in the aggregate not less than one quarter of the aggregate
principal amount of the Notes of the relevant Series for the time
being outstanding will form a quorum.
Voting Certificates obtained and Electronic Voting Instructions
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, Luxembourg, as the case may be) shall 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 shall be decided in the
first instance by a show of hands and in case of equality of votes
the chairman of the Meeting shall 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
Issuer, the Trustee or any person present holding or representing
not less than 2 per cent. of the principal amount outstanding of
the Notes of the relevant Series 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 shall be conclusive evidence of the fact
without proof of the number or proportion of the votes recorded in
favour or against such resolution.
On a show of hands every person who is present and is a holder
of Notes or is a proxy or representative shall have one vote. On a
poll every such person shall have one vote in respect of each
GBP1,000 (or such other amount as the Trustee may, in its
discretion, stipulate) in aggregate principal amount outstanding of
the Notes of the relevant Series in respect of which he or she is a
holder, proxy or representative.
4. To be passed at the Meeting, an Extraordinary Resolution
requires a majority of at least three-fourths of the votes cast in
respect of the Extraordinary Resolution. If passed, an
Extraordinary Resolution shall be binding on all Noteholders of the
relevant Series, whether or not present at the Meeting at which it
is passed and whether or not voting.
This Notice is given by Equity Release Funding (No.3) PLC.
Noteholders should contact the following for further
information:
The Solicitation Agent
NatWest Markets Plc
250 Bishopsgate
London EC2M 4AA
United Kingdom
Telephone: +44 20 7678 5222
Attention: Liability Management
Email: liabilitymanagement@natwestmarkets.com
The Tabulation Agent
Lucid Issuer Services Limited
Tankerton Works
12 Argyle Walk
London WC1H 8HA
United Kingdom
Telephone: +44 20 7704 0880
Attention: Owen Morris
Email: aviva@lucid-is.com
Dated: 04 August 2021
ANNEX 1 - COMPOUNDED DAILY SONIA
"Compounded Daily SONIA", means the rate of return of a daily
compound interest investment (with the daily Sterling overnight
reference rate as reference rate for the calculation of interest)
with respect to an Interest Period, will be calculated by the Agent
Bank on the relevant Interest Determination Date in accordance with
the following formula, and the resulting percentage will be
rounded, if necessary, to the fourth decimal place, with 0.00005%
being rounded upwards:
where:
"d" means, for any Interest Period, the number of calendar days
in such Interest Period;
"d o " means, for any Interest Period, the number of London
Banking Days in such Interest Period;
"i" means, for any Interest Period, a series of whole numbers
from one to "do", each representing the relevant London Banking Day
in chronological order from, and including, the first London
Banking Day in such Interest Period to, and including, the last
London Banking Day in such Interest Period;
"Interest Determination Date" means, in respect of any Interest
Period, the date falling 5 London Banking Days prior to the
Interest Payment Date for such Interest Period (or the date falling
5 London Banking Days prior to such earlier date, if any, on which
the Notes are due and payable);
"London Banking Day" or "LBD" means any day on which commercial
banks are open for general business (including dealing in foreign
exchange and foreign currency deposits) in London;
"n i " for any London Banking Day "i", in the relevant Interest
Period, the number of calendar days from, and including, such
London Banking Day "i" up to, but excluding, the following London
Banking Day;
"p" means 5 London Banking Days;
"Relevant Period" means, in respect of an Interest Period, the
period from, and including, the date falling 5 London Banking Days
prior to the first day of such Interest Period and ending on, but
excluding, the date which is "p" (5 London Banking Days) prior to
the Interest Payment Date for such Interest Period (or the date
falling "p" (5 London Banking Days) prior to such earlier date, if
any, on which the Notes become due and payable);
"SONIA Reference Rate" means, in respect of any London Banking
Day, a reference rate equal to the daily Sterling Overnight Index
Average ("SONIA") rate expressed as a percentage for such London
Banking Day as provided by the administrator of SONIA to authorised
distributors and as then published on Refinitiv Screen SONIA Page
(or if that page is unavailable, as otherwise is published by such
authorised distributors) (the "Screen Page") on the London Banking
Day immediately following such London Banking Day; and
"SONIA i-pLBD " means, in respect of any London Banking Day "i"
falling in the relevant Interest Period, the SONIA Reference Rate
for the London Banking Day falling "p" (5 London Banking Days)
prior to the relevant London Banking Day "i".
If, in respect of any London Banking Day in the applicable
Relevant Period, the Agent Bank determines that the SONIA Reference
Rate is not available on Refinitiv Screen SONIA Page or has not
otherwise been published by the relevant authorised distributors,
such SONIA Reference Rate shall be: (i) the Bank of England's Bank
Rate (the "Bank Rate") prevailing at close of business on the
relevant London Banking Day; plus (ii) the mean of the spread of
the SONIA Reference Rate to the Bank Rate over the previous five
London Banking Days on which a SONIA Reference Rate has been
published, excluding the highest spread (or, if there is more than
one highest spread, one only of those highest spreads) and lowest
spread (or, if there is more than one lowest spread, one only of
those lowest spreads) to the Bank Rate.
Notwithstanding the paragraph above, in the event the Bank of
England (or working group thereof) publishes guidance as to (i) how
the SONIA Reference Rate is to be determined; or (ii) any rate that
is to replace the SONIA Reference Rate, the agent bank (or such
other party responsible for the calculation of the rate of
interest, as specified in the applicable final terms) shall,
subject to receiving written instructions from the Issuer to the
extent that it is reasonably practicable, follow such guidance in
order to determine SONIA (including any credit spread adjustment in
order to reduce or eliminate, to the extent reasonably practicable,
any transfer of economic value to or from the Issuer as a result of
the replacement or adjustment of SONIA) for the purpose of the
relevant calculation for so long as the SONIA Reference Rate is not
available or has not been published by the authorised
distributors.
If the Rate of Interest cannot be determined in accordance with
the foregoing provisions in relation to any Interest Period, the
Rate of Interest applicable to the Notes during such Interest
Period shall be that determined as at the last preceding Interest
Determination Date.
If the Notes become due and payable in accordance with
Conditions 10 (Events of Default) or 11 (Enforcement of Notes), the
final Interest Determination Date shall, notwithstanding the
definition specified above, be deemed to be the date on which such
Notes became due and payable and the Rate of Interest on such Notes
shall, for so long as any such Note remains outstanding, be the
rate determined on such date.
ANNEX 2 - MARGIN ADJUSTMENT
Rationale for the Noteholder Proposal
The formula for calculating interest on the Notes shall be as
set out in Annex 1 to the Notice of Meeting. Due to the differences
in the nature of LIBOR and SONIA, the replacement of LIBOR as the
reference rate for the Notes requires a corresponding credit
adjustment spread to the existing Relevant Margin payable in
respect of the Notes. The Proposal use the "5-year historical
median" methodology agreed by the International Swaps and
Derivatives Association ("ISDA") for determining this credit
adjustment spread and recommended by the Working Group for use in
cash products such as the Notes. It involves taking the median of
the daily difference between LIBOR and SONIA compounded over the
corresponding period 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 as of the date of this Consent Solicitation
Memorandum.
For the avoidance of doubt, the interest basis applicable to the
Notes up to but excluding the Effective Date will continue to be
Sterling LIBOR, and interest payments made on the Effective Date
will not be affected by the pricing methodology proposed in this
Consent Solicitation Memorandum.
If, in respect of the Notes, the Extraordinary Resolution is
passed at the adjourned Meeting and the Eligibility Condition is
satisfied, the modifications described in the Consent Solicitation
Memorandum may be implemented on the Implementation Date with
effect from the relevant Effective Date.
The Margin Adjustment
In respect of the Notes, the Rate of Interest that will be
effective from the relevant Effective Date will be equal to
Compounded Daily SONIA plus the New Margin.
New Margin means:
A. the Current Margin; plus
B. the Relevant Credit Adjustment Spread,
where:
A. Current Margin means 3.50 per cent.
B. Relevant Credit Adjustment Spread means 0.1193 per cent.
The detailed provisions relating to the calculation of
Compounded Daily SONIA are set out in the Supplemental Trust
Deed.
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END
MSCKZGGRLDNGMZG
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