REG - Swan Housing Capital - M&G Security Trustee Announcement

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11/10/2022 17:15

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RNS Number : 5375C  Swan Housing Capital  11 October 2022

Swan Housing Capital plc

11 October 2022

Swan Housing Capital plc

£250,000,000 3.625 per cent. Secured Bonds due 2048

(the Bonds)

Terms used but not otherwise defined in this notice shall have the meanings
given to them in the Bond Trust Deed constituting the Bonds dated 5 March 2015
between Swan Housing Capital plc (the Issuer) and M&G Trustee Company
Limited as Bond Trustee (M&G) (the Bond Trust Deed) and the Original Loan
Agreement between the Issuer, Swan Housing Association Limited (the Borrower)
and M&G as Security Trustee (the Loan Agreement).

Reference is made to the RNS announcement dated 7 October 2022 (the Issuer
RNS) made by the Issuer in relation to:

(a)        the failure by the Borrower to deliver to M&G as
Security Trustee the consolidated audited financial statements of the Group
Parent pursuant to, and in accordance with the time periods required under,
the Loan Agreement (the Swan HA Breach); and

(b)        the failure by the Issuer to deliver to M&G as Bond
Trustee its balance sheet, profit and loss account and report pursuant to, and
in accordance with the time periods required under, the Bond Trust Deed (the
Issuer Breach and, together with the Swan HA Breach, the Breaches).

Pursuant to:

(i)         Clause 14.3 (Breach of Other Obligations) of the Loan
Agreement, the Swan HA Breach will constitute a Borrower Default under the
Loan Agreement if it continues for the period of 30 days next following the
service by the Security Trustee on the Borrower of notice requiring the same
to be remedied;

(ii)        Condition 12.1(b) (Events of Default), the Issuer Breach
will constitute an Event of Default if it continues for the period of 30 days
next following the service by the Bond Trustee on the Issuer of notice
requiring the same to be remedied; and

(c)        Condition 12.2 (Enforcement), the Bond Trustee is not bound
to take any steps or action to enforce the provisions of, among other things,
the Bond Trust Deed, the Bonds or the Loan Agreement unless it has been so
directed by an Extraordinary Resolution or requested in writing by the holders
of at least one-fourth in Outstanding Principal Amount of the Bonds then
outstanding and it shall have been indemnified, secured and/or pre-funded to
its satisfaction.

M&G understands, from the Issuer RNS and its discussions with the
Borrower, that:

(A)        as a result of the collapse of merger discussions with the
Orbit Group, the auditors of the Borrower were unable to complete their audit
of the Borrower's financial statements for its financial year ended 31 March
2022;

(B)        the Borrower is currently in merger discussions with the
Sanctuary Group and is engaging with its auditors to ensure that its auditors
complete their audit of the Borrower's financial statements for its financial
year ended 31 March 2022 if the Sanctuary merger goes ahead;

(C)        subject to satisfactory due diligence and agreement as to
terms, the Sanctuary merger is expected to complete by 30 November 2022; and

(D)       the Borrower and the Issuer will keep M&G appraised of any
further developments.

On the basis of the above, M&G is currently minded not to serve the
notices referred to in Clause 14.3 (Breach of Other Obligations) of the Loan
Agreement and Condition 12.1(b) (Events of Default) to enable sufficient time
for the merger to take effect and the Breaches to be cured unless directed and
indemnified, secured and/or pre-funded to its satisfaction in accordance with
Condition 12.2 (Enforcement).

M&G and its advisers will continue to monitor developments in respect of
the Breaches and the Sanctuary merger and will reassess this position in light
of any adverse developments.

M&G reserves all of the rights, powers, claims and remedies available to
it under the Transaction Documents and applicable law.  No delay or
forbearance by M&G to exercise any right or remedy accruing under the
terms of the Transaction Documents or other documentation relating thereto, or
under applicable law, shall impair any such right or remedy or constitute a
waiver thereof or an acquiescence thereto.

Please note that this notice is not intended and should not be construed as
investment, accounting, financial, legal, tax, or other advice by or on behalf
of M&G, or its directors, officers, affiliates, employees or advisors.
Each person or entity receiving this notice should seek the advice of its own
advisors in respect of the matters set forth herein.

 

This notice is given by:

M&G Trustee Company Limited

10 Fenchurch Street

London  EC3M 5AG

Telephone: 020 7220 7588

Email: trustees@mandg.com

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