Notice of Note Event of Default

Sandwell Commercial Finance No1 PLC

25 May 2023

 

THIS NOTICE IS IMPORTANT AND REQUIRES THE IMMEDIATE ATTENTION OF NOTEHOLDERS. IF NOTEHOLDERS ARE IN ANY DOUBT AS TO THE ACTION THEY SHOULD TAKE, THEY SHOULD SEEK THEIR OWN FINANCIAL AND LEGAL ADVICE IMMEDIATELY FROM THEIR STOCKBROKER, SOLICITOR, ACCOUNTANT OR OTHER INDEPENDENT FINANCIAL OR LEGAL ADVISER

Notice of Note Event of Default

to the holders of

£5,000,000 Class E Mortgage Backed Floating Rate Notes due 2039

(ISIN: XS0191373926)

(the "Class E Notes" and the holders thereof, the "Noteholders") issued by

Sandwell Commercial Finance No. 1 plc

(the "Issuer")

We refer to the trust deed dated 19 May 2004 between the Issuer and Citicorp Trustee Company Limited (the "Trustee") constituting the Notes (as the same may be amended, supplemented or restated from time to time, the "Trust Deed"). We also refer to the previous notices to Noteholders published by us on the dates set out in the Annex to this Notice in which we notified the Noteholders of the occurrence of Note Events of Default pursuant to Condition 9(e) (Events of Default - Class E Noteholders), as further described below (the "Preceding IPD Note Events of Default"). Capitalised terms used but not otherwise defined in this Notice shall have the meanings given to them in the Trust Deed or in the terms and conditions of the Notes (the "Conditions") set out in the Trust Deed.

1.   In respect of each Payment Date from and including the Payment Date falling on 11 November 2021 to and including the Payment Date falling on 13 February 2023 (the "Preceding IPDs"), the Issuer has informed the Trustee that there was a shortfall in the amount available to meet interest payments due on the Class E Notes on the relevant Payment Date. In each case, these shortfalls were a direct result of the balance of the Class E Principal Deficiency Sub-Ledger exceeding 50% of the Principal Amount Outstanding of the Class E Notes, which prevented the use of Principal Receipts to fund the relevant Shortfall, and also prevented a Liquidity Drawing.

2.   Please now be advised that there was a shortfall of £423,490.23 in the amount available to meet interest payments due on the Class E Notes on the Payment Date falling on 11 May 2023 (the "Current IPD"). This shortfall includes the sum of £344,620.63 accrued from the Payment Date on 13 February 2023, and was again a result of the circumstances described in paragraph 1.

3.   It is expected that there will be insufficient receipts to make payments of interest on the Class E Notes on each future Payment Date.

4.   Condition 9(e) (Events Of Default - Class E Noteholders) of the Notes specifies that, so long as no Class A Notes, Class B Notes, Class C Notes or Class D Notes are outstanding, the failure, for a period of seven Business Days, to make a payment of any amount of principal or interest on, any Class E Note when the same becomes due and payable in accordance with the Conditions shall constitute a Note Event of Default. As at each of the Preceding IPDs and the Current IPD, the Class E Notes were the Most Senior Class of Notes then outstanding.

5.   As the period referred to in paragraph 4 above has now expired for payment of interest on the Class E Notes on the Current IPD, a further Note Event of Default has occurred pursuant to Condition 9(e) (Events Of Default - Class E Noteholders) of the Notes (the "Current IPD Note Event of Default"). Pursuant to Condition 9(e) (Events Of Default - Class E Noteholders) of the Notes, subject to the Trustee being indemnified and/or secured to its satisfaction, the Trustee in its absolute discretion may and shall (i) if so requested in writing by the holders of not less than 25 per cent. in aggregate of the Principal Amount Outstanding of the Class E Notes then outstanding or (ii) if so directed by or pursuant to an Extraordinary Resolution of the holders of the Class E Notes then outstanding, give notice (a "Note Enforcement Notice") to the Issuer declaring all the Notes to be due and repayable. Pursuant to Clause 13 (Security Enforceable) of the Deed of Charge, the Issuer Security shall become enforceable upon the delivery of a Note Enforcement Notice.

6.   Condition 10 (Enforcement Of Notes) of the Notes provides further that following the service of a Note Enforcement Notice and subject to the Trustee being indemnified and/or secured to its satisfaction, the Trustee may at its discretion and shall if so requested in writing by the holders of not less than 25 per cent. in aggregate of the Principal Amount Outstanding of any Class of Notes then outstanding or directed by an Extraordinary Resolution of the holders of any Class of Notes then outstanding, take steps to enforce the Issuer Security in accordance with the Trust Deed and the Deed of Charge.

7.   The Trust Deed contains provisions stating that the Trustee shall not be under any obligation to take any action unless it shall have been indemnified and/or secured to its satisfaction and shall not be required to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties, or in the exercise of any of its rights or powers if it has grounds for believing that repayment of such funds or adequate indemnity against, or security for, such risk or liability is not reasonably assured to it.

8.   The Trustee has indicated to the Issuer that it does not presently intend in respect of either the Preceding IPD Note Events of Default or the Current IPD Note Event of Default to deliver a Note Enforcement Notice to the Issuer declaring all the Notes to be due and repayable unless and until: (i) it is so requested in writing by the holders of not less than 25 per cent. in aggregate of the Principal Amount Outstanding of the Class E Notes outstanding or it is so directed by or pursuant to an Extraordinary Resolution of the holders of the Class E Notes and (ii) it is indemnified and/or secured to its satisfaction pursuant to Condition 9(e) (Events Of Default - Class E Noteholders) of the Notes. The Trustee has also confirmed to the Issuer that the Trustee expresses no opinion as to the action that Noteholders should take on the occurrence of a Note Event of Default. Noteholders should take and rely on their own independent legal and financial advice and may not rely on advice or information provided to the Trustee, statements as to the legal position included

in notices issued by the Trustee relating to the Notes or otherwise or the views of the Trustee expressed herein or otherwise.

9.   In order to facilitate communications with Noteholders and to enable Noteholders to relay their views, directions and requests to the Trustee in relation to the Notes, and in order to determine whether any requests/directions have been given by the requisite percentage of Noteholders, all Noteholders may make themselves known to the Trustee and verify their holdings of the Notes to the Trustee in accordance with the following procedures:

(i)   send an e-mail to the Trustee at [e-mail] referencing "Sandwell Commercial Finance No.1 plc" and the ISIN of the Notes in the subject line and disclosing the identity of the Noteholder, the nominal amount of each ISIN held by the Noteholder and the details of the person(s) who shall represent the Noteholder; and

(ii)   Holders of Notes at a European depository should contact their custodian and direct it to have Euroclear/Clearstream send an MT599 SWIFT message to Citibank, N.A., London Branch as the Principal Paying Agent, for onward transmission to the Trustee disclosing:

1.   ISIN

2.   Account no.

3.   Participant name

4.   Nominal amount

5.   Beneficial Holder Name

6.   Contact details: name, telephone number and email address; and

7.   Confirmation that the Noteholder's account is blocked.

For further information, please contact the Issuer at the address set out at the end of this Notice.

This Notice is given by

SANDWELL COMMERCIAL FINANCE NO. 1 PLC

Wilmington Trust SP Services (London) Limited Third Floor, 1 King's Arms Yard

London EC2R 7AF 25 May 2023

ANNEX

Dates of the previous Notices of Note Event of Default

21 December 2021

1 March 2022

14 June 2022

23 August 2022

24 November 2022

22 February 2023

 

END