REG - Sandwell Comm FinNo2 - LIBOR ANNOUNCEMENT

M&t BankAnnouncement

26/06/2023 16:30

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RNS Number : 9390D  Sandwell Commercial Finance No2 PLC  26 June 2023

Sandwell Commercial Finance No.2 Plc Notice to Noteholders

NOTICE TO THE HOLDERS OF THE OUTSTANDING:

£17,150,000 Class C Mortgage Backed Floating Rate Notes due 2037

(ISIN: XS0229030712; Common Code: 022903071),

£21,700,000 Class D Mortgage Backed Floating Rate Notes due 2037

(ISIN: XS0229031017; Common Code: 022903101),

£14,000,000 Class E Mortgage Backed Floating Rate Notes due 2037

(ISIN: XS0229031280; Common Code: 022903128),

(together, the "Notes")

of

Sandwell Commercial Finance No. 2 PLC

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

Following on from the RNS Notice dated 23 March 2023 where Noteholders were
requested to disclose their identity and provide proof of holding to the
Servicer or the Issuer as soon as possible in order to participate in
discussions, this Notice provides information on the LIBOR-linked exposures
within the Transaction and an overview of the fallback language in place (if
any).

 

No Noteholders have come forward to engage in the process. There are
LIBOR-linked elements in the Transaction without either a documented fallback
or a fallback which the provider may be prepared to rely on, so to guarantee
continued access to these facilities they would need to transition to an
alternative reference rate. It is therefore in the best interests of all
parties to engage in the process so we would welcome contact from Noteholders
as soon as possible.

 

For all other elements where the fallback language is robust, it is intended
to allow these elements to revert to the documented language. This will apply
to the Notes and the Fixed/Floating Swap Agreement, but please see below for
further information.

 

Key LIBOR-linked exposures

 

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

 

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

2. A Guaranteed Investment Contract with a floating rate of interest linked to
LIBOR;

3. A Liquidity Facility with a floating rate of interest linked to LIBOR;

4. A Fixed / Floating Swap Agreement linked to LIBOR; and

5. A Subordinated Loan Agreement linked to LIBOR,

 

which in each case are subject to the terms of the Transaction Documents.

 

The below provisions are subject to the Transaction Documents (as the same may
have been amended or restated from time to time) and outline the fallback
provisions (if any) in such documents.

 

LIBOR fallback provisions (if any)

 

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

 

As set out in section 4 (c) (iii) 'Rates of Interest' of the Terms and
Conditions of the Notes if, following the discontinuation of LIBOR, the
Relevant Screen Rate is unavailable and no banks are able to provide
quotations, then the Rates of Interest for the relevant Interest Period shall
be the Rates of Interest in effect for the immediately preceding Interest
Period but taking account of any change in the Relevant Margin. If the rate of
interest is determined by reference to a calculation made on a previous
historic date on an ongoing basis, this would effectively convert the existing
floating rate of interest to a fixed rate of interest.

 

2. A Guaranteed Investment Contract with a floating rate of interest linked to
LIBOR

 

There is no fallback language documented within the Agreement.

 

3. A Liquidity Facility with a floating rate of interest linked to LIBOR

 

If it is not possible to determine the Interest Rate for the Liquidity
Facility Drawings, the Liquidity Provider shall promptly notify the Issuer of
the fact and that Clause 7 of the Liquidity Facility Agreement is in
operation. After such notification, references to LIBOR in the Agreement will
be deemed to be references to the costs of the Liquidity Provider (expressed
as a rate per annum) of funding the Drawing by whatever means it reasonably
determines to be appropriate. We are currently liaising with the Liquidity
Provider to establish appetite to transition to this fallback rate, in view of
the fact that it was never intended to accommodate absolute cessation of
LIBOR.

 

4. A Fixed / Floating Swap Agreement linked to LIBOR

 

If LIBOR cannot be determined and no Reference Banks are able to provide
quotations, then the Floating Rate for the relevant Swap Calculation Period
shall be the Floating Rate in effect for the immediately preceding Swap
Calculation Period, as set out in Schedule 2 of the Master Agreement. If the
rate of interest is determined by reference to a calculation made on a
previous historic date on an ongoing basis, this would have the effectively
convert the existing floating rate of interest to a fixed rate of interest.

 

5. A Subordinated Loan Agreement linked to LIBOR

 

There is no fallback language documented within the Agreement.

 

 

Procedure for disclosing identity and holdings

 

Noteholders are requested to disclose their identity and provide proof of
holding to the Servicer or the Issuer as soon as possible in order to
participate in discussions. Noteholders are encouraged to take their own
advice as to the potential implications of the cessation of LIBOR.

 

Noteholders seeking further information should contact the Servicer at:

 _StructuredFinance@westbrom.co.uk

 

DISCLAIMER

 

Nothing in this announcement constitutes or should be construed as
constituting an offer of securities issued by the Issuer ("Securities"), an
offer to purchase any Securities or an offer to modify the terms and
conditions of any Securities.

 

This Notice is given by:

 

Sandwell Commercial Finance No. 2 Plc

Wilmington Trust SP Services (London) Ltd

Third Floor, Kings Arms Yard

London EC2R 7AF

Dated 26 June 2023

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