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Mainsail II Ltd (73WC)

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Thursday 04 October, 2007

Mainsail II Ltd

Update to Creditors

Mainsail II Ltd
04 October 2007



                                    Update Notice
                         MAINSAIL II LIMITED (the 'Company')
                 US$4,000,000,000 EURO/US COMMERCIAL PAPER PROGRAMME
                       US$407,000,000 MEZZANINE NOTE PROGRAMME
                        US$112,000,000 CAPITAL NOTE PROGRAMME


                                                               27 September 2007 


FOR IMMEDIATE RELEASE


                              Update to Creditors


The Company is an exempted company with limited liability organised under the
laws of the Cayman Islands and established for the purpose of carrying out the
business of an investment company in relation to the Company's programme for the
issuance of capital notes (the 'Capital Notes') and mezzanine notes (the
'Mezzanine Notes' (together, with the Capital Notes, the 'Programme Notes') as
more particularly set out in the information memorandum (the 'Information
Memorandum') dated 12 July 2007 in relation to the Programme Notes.

The net proceeds of the issuance of the Programme Notes were used by the Issuer
to acquire a portfolio of investments including CMBS, RMBS and CDO asset backed
securities.

Following the announcement dated 6 September 2007 concerning the Barclays
Capital restructuring proposal, the following update has been provided to
investors.

Following an informal investor conference call on 29 August 2007, an ad hoc
committee of investors has been formed and is in regular contact with the
Security Trustee. The ad hoc investor committee represents holders of Senior
Obligations who together hold more than 50% of the outstanding CP Obligations,
and are therefore able to together form an instructing group comprising the
Majority Secured Parties.

On 6 September 2007 the Security Trustee received details of a restructuring
proposal from Barclays Capital. The Security Trustee regarded this as a credible
proposal at the time it was provided. On 21 September 2007, the Security Trustee
was informed by Barclays Capital that the proposal has not received sufficient
support from required stakeholders, and the proposal is not capable of being
implemented in its current form. 

The Security Trustee is finalising the terms of appointment of a specialist
financial advisor to assist the Security Trustee in, among other matters,
valuing the Collateral and evaluating forward strategic options for realisation
of the Collateral. An announcement will be made of any appointment in due
course.

The Security Trustee has ascertained that there is a cash balance standing to
the credit of the US Operating Account. Notwithstanding the occurrence of the
Acceleration Notice Date on 24 September 2007, the Security Trustee has sought
directions from the Majority Secured Parties as to whether such balance should
be applied towards, among other liabilities, the outstanding Commercial Paper at
this time. The Security Trustee has received indications from holders of
Commercial Paper representing more than 50% of the outstanding CP Obligations
that they will direct the Security Trustee not to make such payments before 1
October 2007. Thereafter, the Security Trustee intends to seek further
directions from the Majority Secured Parties in relation to the making of such
payments.




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