Notice of Noteholder Meeting

RNS Number : 4403T

Silverstone Master Issuer PLC

03 October 2014

 



SILVERSTONE MASTER ISSUER PLC

(incorporated with limited liability in England and Wales under the Registration Number 06612744)

(the Issuer)

ANNOUNCEMENT OF A CONSENT SOLICITATION TO NOTEHOLDERS UNDER THE ISSUER'S RESIDENTIAL MORTGAGE BACKED NOTE PROGRAMME

£650,000,000 Series 2009-1 Class A3 Mortgage Backed Floating Rate Notes due 2055

(ISIN: XS0462896688, Common Code: 046289668)

(the Series 2009-1 Notes and holders thereof, the Series 2009-1 Noteholders)

€1,100,000,000 Series 2010-1 Class A2 Mortgage Backed Floating Rate Notes due 2055

(Regulation S Notes: ISIN: XS0552150228, Common Code: 055215022;

Rule 144A Notes: ISIN: XS0552340787, Common Code: 055234078)

(the Series 2010-1 Class A2 Notes and holders thereof, the Series 2010-1 Class A2 Noteholders)

U.S.$300,000,000 Series 2010-1 Class A3 Mortgage Backed Floating Rate Notes due 2055

(Regulation S Notes: ISIN: XS0553809533, Common Code: 055380953;

Rule 144A Notes: ISIN: US82846GAC42, Common Code: 055382727, CUSIP: 82846GAC4)

(the Series 2010-1 Class A3 Notes and holders thereof, the Series 2010-1 Class A3 Noteholders)

(the Series 2010-1 Class A2 Notes and Series 2010-1 Class A3 Notes together,

the Series 2010-1 Notes and holders thereof, the Series 2010-1 Noteholders)

£170,000,000 Series 2011-1 Class 2A Mortgage Backed Floating Rate Notes due 2055

(Regulation S Notes: ISIN: XS0692717746, Common Code: 069271774;

Rule 144A Notes: ISIN: XS0692718041, Common Code: 069271804)

(the Series 2011-1 Class 2A Notes and holders thereof, the Series 2011-1 Class 2A Noteholders)

U.S.$500,000,000 Series 2011-1 Class 4A Mortgage Backed Fixed Rate Notes due 2055

(Regulation S Notes: ISIN: XS0693096587, Common Code: 069309658;

Rule 144A Notes: ISIN: US82846GAE08, Common Code: 069385354, CUSIP: 82846GAE0)

(the Series 2011-1 Class 4A Notes and holders thereof, the Series 2011-1 Class 4A Noteholders)

(the Series 2011-1 Class 2A Notes and Series 2011-1 Class 4A Notes together,

the Series 2011-1 Notes and holders thereof, the Series 2011-1 Noteholders)

U.S.$1,000,000,000 Series 2012-1 Class 1A Mortgage Backed Floating Rate Notes due 2055

(Regulation S Notes: ISIN: XS0758797509, Common Code: 075879750;

Rule 144A Notes: ISIN: US82846GAG55, Common Code: 076047693, CUSIP: 82846G AG5)

(the Series 2012-1 Class 1A Notes and holders thereof, the Series 2012-1 Class 1A Noteholders)

U.S.$1,050,000,000 Series 2012-1 Class 2A1 Mortgage Backed Floating Rate Notes due 2055

(Regulation S Notes: ISIN: XS0758797764, Common Code: 075879776;

Rule 144A Notes: ISIN: US82846GAH39, Common Code: 076052468, CUSIP: 82846G AH3)

(the Series 2012-1 Class 2A1 Notes and holders thereof, the Series 2012-1 Class 2A1 Noteholders)

£200,000,000 Series 2012-1 Class 2A2 Mortgage Backed Floating Rate Notes due 2055

(Regulation S Notes: ISIN: XS0758797848, Common Code: 075879784;

Rule 144A Notes: XS0758797921, Common Code: 075879792)

(the Series 2012-1 Class 2A2 Notes and holders thereof, the Series 2012-1 Class 2A2 Noteholders)

(the Series 2012 Class 1A Notes, Series 2012-1 Class 2A1 Notes and Series 2012-1 Class 2A2 Notes together,

the Series 2012-1 Notes and holders thereof, the Series 2012-1 Noteholders)

(the Series 2009-1 Notes, the Series 2010-1 Notes, the Series 2011-1 Notes and the Series 2012-1 Notes together,

the Notes, and holders thereof, the Noteholders)

SILVERSTONE MASTER ISSUER PLC: ANNOUNCEMENT OF NOTICE OF NOTEHOLDER MEETING

The Issuer announced today that it is inviting the Noteholders to approve, by an extraordinary resolution (the Extraordinary Resolution), a proposal to make certain amendments to the terms and conditions of the Notes and the transaction documents entered into in connection with the Notes issued by the Issuer (the Noteholder Proposal) in respect of the Issuer's residential mortgage backed note programme (the Programme).

A notice (the Notice of Meeting) convening a meeting of the Noteholders to be held at 10:00 a.m. (London time) (6:00 a.m. New York time) on Monday, 27 October 2014 (the Meeting) was delivered to Euroclear, Clearstream, Luxembourg and DTC (each as defined in the Notice of Meeting) on Friday, 3 October 2014.  The Meeting will be held at the offices of Allen & Overy LLP, One Bishops Square, London E1 6AD for the purpose of considering and, if thought fit, passing the Extraordinary Resolution as set out in the Notice of Meeting which will be proposed as an Extraordinary Resolution in accordance with the provisions of the Note Trust Deed dated 25 July 2008  (as amended or supplemented from time to time, the Note Trust Deed) made between the Issuer and Citicorp Trustee Company Limited (the Note Trustee) acting as trustee for the noteholders (including holders of the Notes).

Nationwide Building Society holds the Series 2009-1 Class Z Notes, the Series 2010-1 Class Z Notes, the Series 2011-1 Class 2Z Notes, the Series 2011-1 Class 3A Notes, the Series 2011-1 Class 3Z1 Notes, the Series 2011-1 Class 3Z2 Notes, the Series 2011-1 Class 3Z3 Notes, the Series 2011-1 Class 4Z Notes, the Series 2012-1 Class 1Z Notes, the Series 2012-1 Class 2Z1 Notes and the Series 2012-1 Class 2Z2 Notes (collectively, the Retained Notes) and intends to pass a Written Resolution in respect of those notes in favour of the Noteholder Proposal.  However, Nationwide Building Society is not formally entitled to have its vote count towards the proposed Extraordinary Resolution.

Full details of the Noteholder Proposal are set out in a Consent Solicitation Memorandum dated 3 October 2014 (the Consent Solicitation Memorandum) which is available from Citibank, N.A., London Branch (the Information and Tabulation Agent) or Citigroup Global Markets Limited, as Lead Solicitation Agent.  Noteholders should read the Consent Solicitation Memorandum in full and in particular read the information in the sections headed "Expected timetable", "Voting and Quorum", "Submission of Instructions" and Section 4-Procedures in Connection with the Consent Solicitation to ensure that they are aware of the mechanics for delivery of an instruction within the applicable time frames.

Capitalised terms used but not otherwise defined herein shall have the meanings ascribed to them in the Consent Solicitation Memorandum. Capitalised terms used but not otherwise defined herein or in the Consent Solicitation Memorandum shall have the meanings ascribed to them in the Conditions of the Notes set out in the Note Trust Deed.

Background to the Noteholder Proposal

The market environment in which Nationwide operates its business and the Programme has undergone significant changes in the years since 2008 when the Programme was established and the period since September 2011 when the Programme was last subject to significant change via a consent solicitation process.  Developments in regulations, legal frameworks and ratings criteria imply added costs associated with increases in asset encumbrance and the need to hold additional levels of liquidity.  Liquidity is required to protect against potential future postings of collateral and outflows of cash that are contingent upon the downgrade of the short-term and/or senior long-term ratings of Nationwide as an Account Bank and a Swap Provider under the Programme.

Nationwide is therefore seeking to minimise contingent liquidity related costs, encumbrance and potential future increases to Nationwide Group counterparty credit risk while otherwise optimising and improving the efficiency of its Programme via the Extraordinary Resolution being proposed by the Issuer under the Noteholder Proposal.  The overriding aim of the modifications set forth in the Consent Solicitation Memorandum and the Notice of Meeting is to ensure the Programme remains a viable and effective funding tool for Nationwide to use for future issuance, while ensuring that the modifications are reviewed by all three Rating Agencies with suitable increases to credit enhancement if required.

If Noteholders pass the Extraordinary Resolution being proposed by the Issuer under the Noteholder Proposal, it will be binding on all holders of the Notes, including those Noteholders who do not approve the Noteholder Proposal or who do not vote on the Extraordinary Resolution.  The Extraordinary Resolution, if passed, constitutes a direction by the relevant Noteholders to the Note Trustee to consent to amendments to the Existing Documents by way of entry into the Amendment Documents to give effect to the following (among other things):

(a)        update Rating Agency counterparty criteria for the Account Banks in line with the latest ratings criteria;

(b)        update the Account Bank replacement provisions to (i) permit Nationwide to continue to act as an Account Bank (at the Funding 1 and the Mortgages Trustee level) upon downgrade provided it collateralises amounts on deposit in the relevant accounts, (ii) permit Nationwide to enter into panel bank arrangements at the Funding 1 Level, and (iii) require Nationwide to open a Standby Mortgages Trustee GIC Account with an appropriately rated third party bank upon downgrade;

(c)        permit the Issuer to issue Class Z GIC Collateral Notes structured as variable funding notes providing Nationwide with a mechanism for collateralising amounts on deposit in the Funding 1 and Mortgages Trustee bank accounts with additional Mortgages;

(d)        update the Funding 1 Swap Agreements to (i) reflect each Rating Agency's current counterparty criteria; (ii) split the Funding 1 Swap into three separate swap transactions, one each in relation to the Fixed Rate Loans, the SMR Loans and the BMR Loans, respectively; (iii) remove the tracker rate portion of the Funding 1 Swap; (iv) remove the replacement requirement and associated collateral posting triggers in respect of the BMR and SMR portions of the Funding 1 Swap and provide an alternative mechanism for maintaining the minimum yield in respect of variable rates under the mortgages through a post-perfection margin covenant; and (v) making certain changes to each Swap Agreement in order to address potential withholding under FATCA and regulatory requirements under EMIR;

(e)        permit Nationwide, as Seller, to repurchase no more than £8,088,403,586 aggregate Outstanding Principal Balance of Surplus Loans following redemption of £9,500,000,000 aggregate Principal Amount Outstanding of the retained Series 2011-1 Class 3A Notes; and

(f)        to (i) amend the Mortgage Sale Agreement to remove the provision which prevents the Mortgages Trustee from purchasing Loans and their Related Security from the Seller if the Seller does not have certain minimum ratings and to remove related Moody's requirements for the sale of loans to the Mortgages Trustee which require the Seller, if its then short term, unsecured, unsubordinated and unguaranteed debt obligations are rated below P-1 but are rated no lower than P-2 by Moody's to, depending on certain factors specified in the Mortgage Sale Agreement, obtain a report from independent accountants; (ii) amend the Servicing Agreement to remove the requirement that direct debits from Borrowers be redirected into an account controlled by a third party bank in the event that the Servicer does not have certain minimum ratings; (iii) amend the definition of "Authorised Investments" to permit certain amounts to be invested in AAA money market funds; (iv) amend the definition of "Minimum Seller Share" to more accurately reflect the risks of set-off against which the Minimum Seller Share is designed to protect; (v) supplement the existing representations and warranties in the Mortgage Sale Agreement with respect to the Loans in order to meet the best practice standards in the asset-backed securities market set by the Prime Collateralised Securities (PCS); (vi) amend the Cash Management Agreement to ensure that the Issuer and Funding 1 can each delegate the responsibility for compliance with its obligations under EMIR and FATCA to appropriate parties; (vii) amend the Mortgage Sale Agreement to allow for the purchase of longer-dated Loans; (viii) amend the Servicing Agreement to replace the trigger to appoint a Master Servicer with a trigger to appoint a Back-up Servicer; and (ix) amend the Cash Management Agreement to provide for the appointment of a back-up cash manager.

Ratings Implications of Noteholder Proposal 

Moody's have reviewed the Noteholder Proposal and the Issuer expects them to issue a press release confirming that they expect there will be no negative rating impact as a result of the Noteholder Proposal.

Fitch have reviewed the Noteholder Proposal and there is not expected to be any negative rating action as a result of the Noteholder Proposal.

Incentive Fee

As part of the Noteholder Proposal, if the relevant Electronic Voting Instruction in favour of the Noteholder Proposal is submitted by a Noteholder to, and is received by, the Information and Tabulation Agent prior to the Early Voting Deadline (and is not validly revoked) and the Extraordinary Resolution is passed at the Meeting or adjourned meeting, as the case may be, and provided also that the Noteholder Proposal is Executed (which, among other things, will be dependent on (i) the Note Trustee having received a Written Resolution of the holder of the Retained Notes consenting to the equivalent of the Noteholder Proposal in respect of those series and classes of Notes, and (ii) the Execution in full of each Amendment Document by the parties thereto and (iii) confirmation from the Rating Agencies that entry into the Amendment Documents will not result in the downgrade, withdrawal or qualification of the then current rating on the Rated Notes), an Incentive Fee will be payable to such Eligible Noteholder on the Signing Date (being no later than three (3) business days after the date that the Extraordinary Resolution is passed and any requisite consents have been obtained) in an amount equal to 0.05 per cent. of the Principal Amount Outstanding of the relevant Note which is the subject of such Electronic Voting Instruction.  For the avoidance of doubt, the holder of the Retained Notes is not entitled to receive the Incentive Fee.

No Incentive Fee will be payable to any Noteholder if (i) instructions from that Noteholder are not received by the Information and Tabulation Agent by the Early Voting Deadline, (ii) that Noteholder submits Electronic Voting Instructions after the Early Voting Deadline, (iii) that Noteholder votes other than by submitting an Electronic Voting Instruction, (iv) that Noteholder votes against the Noteholder Proposal, or (v) if the Noteholder Proposal is not Executed in full.  Nothing in the Consent Solicitation Memorandum prevents any Noteholder from attending and voting on the Extraordinary Resolution in person using a Voting Certificate, but for the avoidance of doubt, any such Noteholder shall not be eligible to receive the Incentive Fee.

Nothing in the Noteholder Proposal or in any other section of the Consent Solicitation Memorandum requires the Issuer to implement the Noteholder Proposal, even if the Noteholder Proposal is approved by the Extraordinary Resolution of the Noteholders. If the Issuer withdraws or does not implement the Noteholder Proposal for any reason then no Incentive Fee will be payable to any Noteholder.

No Incentive Fee will be payable to any Eligible Noteholder other than as set out above.

Expected Timetable of Events

The times and dates below are indicative only.  These dates are subject to the earlier deadlines set by the Clearing Systems and any intermediary through which Noteholders hold their Notes and to the right of the Issuer to amend any term or condition of the Noteholder Proposal as provided in the Consent Solicitation Memorandum.

Friday, 3 October 2014 (At least 21 clear days before the Meeting)	Notice of Meeting to be delivered to Euroclear and Clearstream, Luxembourg and DTC for communication to Direct Participants and via an RNS announcement. The Consent Solicitation Memorandum to be available  from the Information and Tabulation Agent and the Lead Solicitation Agent upon request.
By 10:00 a.m. (London time) (5:00 a.m. New York time) on Wednesday, 8 October 2014	A draft of each of the Amendment Documents to be available for collection or inspection, as indicated, at the specified office of the Information and Tabulation Agent.
By 4:00 p.m. (London time) (11:00 a.m. New York time) on Monday, 20 October 2014	Early Voting Deadline.  The Information and Tabulation Agent must receive from an Eligible Noteholder an Electronic Voting Instruction at or prior to the Early Voting Deadline, and such Electronic Voting Instruction must be in favour of the Noteholder Proposal and must remain unrevoked at the time of the Meeting, for that Eligible Noteholder to be eligible to receive the Incentive Fee.
By 10:00 a.m. (London time) (5:00 a.m. New York time) on Thursday, 23 October 2014 (At least 48 hours before the Meeting)	Expiration Deadline.  Final time by which the relevant Noteholders have arranged for: (i)            obtaining a voting certificate from the Information and Tabulation Agent to attend and vote at the Meeting in person; or (ii)           receipt by the Information and Tabulation Agent of an Electronic Voting Instruction in accordance with the procedures of Euroclear, Clearstream, Luxembourg and/or DTC, as applicable.
	Final time by which the relevant Noteholders have given notice to the Information and Tabulation Agent (via the Clearing Systems) of any intended revocation of, or amendment to, voting instructions previously given by them.
At 10:00 a.m. (London time) (6:00 a.m. New York time) on Monday, 27 October 2014	NOTEHOLDERS' MEETING HELD: SERIES 2009-1 CLASS A3 NOTEHOLDERS, SERIES 2010-1 CLASS A2 NOTEHOLDERS, SERIES 2010-1 CLASS A3 NOTEHOLDERS, SERIES 2011-1 CLASS 2A NOTEHOLDERS, SERIES 2011-1 CLASS 4A NOTEHOLDERS, SERIES 2012-1 CLASS 1A NOTEHOLDERS, SERIES 2012-1 CLASS 2A1 NOTEHOLDERS AND SERIES 2012-1 CLASS 2A2 NOTEHOLDERS DEALT WITH IN A SINGLE MEETING OF SUCH NOTEHOLDERS
As soon as reasonably practicable after the Meeting	Announcement and publication of the results of the Meeting in accordance with Paragraph 8, Part C, Section 4 of the Consent Solicitation Memorandum.
If the Extraordinary Resolution is passed at the Meeting and all other requisite consents with respect to the Noteholder Proposal have been obtained in order for the Amendment Documents to be Executed in full:
Thursday, 30 October 2014	Expected Signing Date and payment of Incentive Fee to Eligible Noteholders.

To view the Notice of Noteholder Meeting, please paste the following URL into the address bar of your browser:

http://www.rns-pdf.londonstockexchange.com/rns/4403T_-2014-10-3.pdf

Requests for information in relation to the Noteholder Proposal should be directed to:

THE ISSUER Silverstone Master Issuer PLC c/o Wilmington Trust SP Services (London) Limited Third Floor, 1 King's Arms Yard London EC2Y 7AF Attn: The Directors Fax: [phone] SOLICITATION AGENTS Citigroup Global Markets Limited Canada Square Canary Wharf London E14 5LB United Kingdom Tel: [phone] Email: [e-mail] Attention: Liability Management Group Nationwide Building Society Nationwide House Pipers Way Swindon SN38 1NW

Requests for information in relation to the procedures for delivering Electronic Voting Instructions should be directed to:

INFORMATION AND TABULATION AGENT CITIBANK, N.A., LONDON BRANCH Citigroup Centre Canada Square London E14 5LB Attention: Exchange Team Telephone: [phone] Email: [e-mail]

DISCLAIMER:  This announcement must be read in conjunction with the Consent Solicitation Memorandum.  The Consent Solicitation Memorandum contains important information which should be read carefully before any decision is made with respect to the Noteholder Proposal.  If any Noteholder is in doubt as to the action it should take, it is recommended to seek its own financial advice, including in respect of any tax consequences, immediately from its stockbroker, bank manager, solicitor, accountant or other independent financial adviser.  Any individual or company whose Notes are held on its behalf by a broker, dealer, bank, custodian, trust company or other nominee must contact such entity if it wishes to vote in respect of the Noteholder Proposal.  None of the Company, nor either of the Solicitation Agents, the Information and Tabulation Agent, the Note Trustee, the Security Trustee or the Funding 1 Security Trustee makes any recommendation as to whether or not or how holders of Notes should vote in respect of the Noteholder Proposal.

The distribution of this announcement and the Consent Solicitation Memorandum in certain jurisdictions may be restricted by law and persons into whose possession this announcement and the Consent Solicitation Memorandum comes are requested to inform themselves about, and to observe, any such restrictions.

 

END

 

 

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