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Virgin Money Hldgs (41KY)

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Wednesday 24 July, 2019

Virgin Money Hldgs

Notice of Meeting

RNS Number : 5563G
Virgin Money Holdings (UK) PLC
24 July 2019
 

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, INCLUDING IN RESPECT OF ANY TAX CONSEQUENCES, IMMEDIATELY FROM THEIR BROKER, BANK MANAGER, SOLICITOR, ACCOUNTANT OR OTHER INDEPENDENT FINANCIAL, TAX OR LEGAL ADVISER.

Virgin Money Holdings (UK) plc

(incorporated under the laws of England and Wales)

(the "Issuer")

NOTICE OF MEETING

to eligible holders of its outstanding Notes listed in the table below

ISIN

Description

Outstanding principal amount

XS1516312409

£230,000,000 Fixed Rate Resettable Additional Tier 1 Securities (the "AT1 Notes")

£230,000,000

XS1813150247

£350,000,000 3.375 per cent. Fixed Rate Reset Callable Senior Notes due 24 April 2026 (the "MREL Notes")

 

(each a "Series" and together, the "Notes")

 

£350,000,000

NOTICE IS HEREBY GIVEN that separate meetings (each a "Meeting" and together the "Meetings") of the holders of each Series (the "Noteholders") convened by the Issuer will be held at the offices of Clifford Chance LLP at 10 Upper Bank Street, London, E14 5JJ on 15 August 2019 (the "Meetings Date") for the purpose of considering and, if thought fit, passing the applicable resolutions set out below, which will be proposed as an Extraordinary Resolution at the relevant Meeting in accordance with the provisions of: (i) in the case of the AT1 Notes, the conditions and the trust deed dated 10 November 2016 (the "AT1 Notes Trust Deed"); and (ii) in the case of the MREL Notes, the conditions and the trust deed dated 28 March 2018, as amended and/or supplemented at the time of issue of the relevant Series, and as further restated, modified and/or supplemented from time to time insofar as it relates to the relevant Series (the "MREL Notes Trust Deed" and together with the AT1 Notes Trust Deed, the "Trust Deeds" and each a "Trust Deed"), in each case made between the Issuer and (among others) Citicorp Trustee Company Limited as trustee (the "Trustee").

The Meeting in respect of the AT1 Notes will commence at 10.00 a.m. (London time) on the Meetings Date, with the Meeting in respect of the MREL Notes being held at 10.10 a.m. (London time) or after the completion of the Meeting in respect of the AT1 Notes (whichever is the later).

Unless the context otherwise requires, capitalised terms used but not defined in this Notice shall have the meaning given in the relevant Trust Deed, the terms and conditions of the Notes of the relevant Series (in respect of each Series, the "Conditions") or the relevant Extraordinary Resolution, as applicable.

EXTRAORDINARY RESOLUTION
IN RESPECT OF THE £230,000,000 FIXED RATE RESETTABLE ADDITIONAL TIER 1 SECURITIES (ISIN: XS1516312409)

THAT this Meeting of the holders (together, the "Noteholders") of the presently outstanding £230,000,000 Fixed Rate Resettable Additional Tier 1 Securities (the "Notes") of Virgin Money Holdings (UK) plc (the "Issuer"), issued with the benefit of a trust deed dated 10 November 2016 (the "Trust Deed") and made between the Issuer and (among others) Citicorp Trustee Company Limited as trustee:

1.            (subject to paragraphs 5 and 6 of this Extraordinary Resolution) acknowledges, authorises and accepts: (i) the substitution of CYBG PLC in place of the Issuer in its capacity as issuer of the Notes (the "Substitution") and effective upon such Substitutions, agrees to release and waive all rights, claims or entitlements against the Issuer, in its respective capacity as issuer of the Notes, under the Notes and the Trust Deed; (ii) assents to the amendment of the Conditions of the Notes with the New Conditions as laid out in Annex I (New Conditions to the AT1 Notes) to the Notice of Meetings (as shown in "blackline" form); and (iii) acknowledges and accepts all other consequential amendments made to the Conditions and the Trust Deed in relation to the Substitution;

2.            (subject to paragraphs 5 and 6 of this Extraordinary Resolution) authorises, directs, requests and empowers the Issuer, the New Issuer and the Trustee to execute an amended and restated trust deed and an amended and restated agency agreement to effect the modifications referred to in paragraph 1 of this Extraordinary Resolution;

3.            (subject to paragraphs 5 and 6 of this Extraordinary Resolution) authorises, directs, requests and empowers the Issuer, the New Issuer and the Trustee to execute, deliver (if applicable) and to do all such other deeds, instruments, acts and things as may be necessary, desirable or expedient in their sole opinion to carry out and to give effect to this Extraordinary Resolution and the implementation of the modifications and arrangements referred to in this Extraordinary Resolution, including but not limited to making any consequential amendments necessary or desirable to any document in respect of the Notes or terminate any such document, agreement or arrangement to provide for such modifications and arrangements;

4.            (subject to paragraphs 5 and 6 of this Extraordinary Resolution) sanctions every abrogation, modification, amendment, compromise or arrangement in respect of the rights of the Noteholders appertaining to the Notes against the Issuer, whether or not such rights arise under the Conditions, the Trust Deed, the Agency Agreement or the global certificate relating to the Notes or otherwise, in each case involved in, resulting from or to be effected by the amendments set out in paragraph 1 of this Extraordinary Resolution;

5.            discharges and exonerates the Trustee from any and all liability for which it may have become or may become liable under the Trust Deed or otherwise in respect of any act or omission including, without limitation, in connection with this Extraordinary Resolution or its implementation, the Substitution and modifications referred to in this Extraordinary Resolution and any act or omission taken in connection with this Extraordinary Resolution or the implementation of the Substitution and modifications referred to herein;

6.            agrees and undertakes fully and effectively to indemnify and hold harmless the Trustee from and against all liability which may be suffered or incurred by the Trustee as a result of any claims, actions, demands or proceedings brought or established (including legal fees) which the Trustee may suffer or incur which in any case arise as a result of the Trustee acting in accordance with this Extraordinary Resolution and the Trust Deed;

7.            waives irrevocably any claim Noteholders may have against the Trustee as a result of any liability they may suffer or incur as a result of acting upon this Extraordinary Resolution (including but not limited to circumstances where it is subsequently found that this Extraordinary Resolution is not valid or binding);

8.            confirms that the Noteholders have formed their own view in relation to the actions contemplated under the amended and restated trust deed and the amended and restated agency agreement without any reliance on the Trustee;

9.            acknowledges that, if the Consent Solicitation is terminated by the Issuer prior to the date of this Meeting in accordance with the terms of the Consent Solicitation Memorandum, even in the event that this Extraordinary Resolution is passed at this Meeting, the amendments set out in paragraph 1 of this Extraordinary Resolution shall not be effective, as such amendments are conditional on the Consent Solicitation not having been terminated;

10.          declares that the implementation of this Extraordinary Resolution shall be conditional on:

(a)            the passing of this Extraordinary Resolution; and

(b)            the quorum required for, and the requisite majority of votes cast at, the Meeting being satisfied by Eligible Noteholders, irrespective of any participation at the Meeting by Ineligible Noteholders and further resolves that, in the event the Extraordinary Resolution is passed at the Meeting but this condition is not satisfied, the Chairman of the Meeting is hereby authorised, directed, requested and empowered to adjourn this Meeting on the same basis (including quorum) as for an adjournment of the Meeting where the necessary quorum is not obtained, for the purpose of reconsidering resolutions 1 to 11 of this Extraordinary Resolution (with the exception of resolution 10(b) of this Extraordinary Resolution) at the adjourned Meeting, and in place of the foregoing provisions of resolution 10(b) the relevant condition will be satisfied if the quorum required for, and the requisite majority of votes cast at, the adjourned Meeting are satisfied by Eligible Noteholders irrespective of any participation at the adjourned Meeting by Ineligible Noteholders; and

11.          acknowledges that the following terms, as used in this Extraordinary Resolution, shall have the meanings given below:

"Conditions" means the terms and conditions of the Notes;

"Consent Solicitation" means the invitation by the Issuer to all Noteholders to consent to this Extraordinary Resolution;

"Consent Solicitation Memorandum" means the consent solicitation memorandum dated 24 July 2019 prepared by the Issuer in relation to, among other things, the Consent Solicitation;

"Eligible Noteholder" means each Noteholder who is: (i) located and resident outside the United States and is not a U.S. person (as defined in Regulation S under the Securities Act) or a dealer or other professional fiduciary in the United States acting only on a discretionary basis for the benefit or account of non-U.S. persons located outside the United States; (ii) not a retail client as defined in Directive 2014/65/EU (as amended); and (iii) otherwise a person to whom the Consent Solicitation can be lawfully made and that may lawfully participate in the Consent Solicitation;

"Ineligible Noteholder" means a Noteholder who is not an Eligible Noteholder; and

"New Conditions" means the Conditions as so modified to include certain amendments in relation to the Substitution, among other things, as laid out in Annex I (New Conditions in relation to the AT1 Notes) to the Notice of Meetings (as shown in "blackline" form).

EXTRAORDINARY RESOLUTION
IN RESPECT OF THE £350,000,000 3.375 PER CENT. FIXED RATE RESET CALLABLE SENIOR NOTES DUE 24 APRIL 2026 (ISIN:
XS1813150247)

THAT this Meeting of the holders (together, the "Noteholders") of the presently outstanding £350,000,000 3.375 per cent. Fixed Rate Reset Callable Senior Notes due 24 April 2026 (the "Notes") of Virgin Money Holdings (UK) plc (the "Issuer"), issued with the benefit of a trust deed dated 28 March 2018 (the "Trust Deed") and made between the Issuer and (among others) Citicorp Trustee Company Limited as trustee:

1.            (subject to paragraphs 5 and 6 of this Extraordinary Resolution) acknowledges, authorises and accepts: (i) the substitution of CYBG PLC in place of the Issuer in its capacity as issuer of the Notes (the "Substitution") and effective upon such Substitution, agrees to release and waive all rights, claims or entitlements against the Issuer, in its respective capacity as issuer of the Notes, under the Notes and the Trust Deed; (ii) assents to: (A) the amendment of the Conditions of the Notes with the New Conditions; and (B) the amendment of the Final Terms with the Amended and Restated Final Terms, each as laid out in Annex II (New Conditions and Amended and Restated Final Terms for the MREL Notes) to the Notice of Meetings (as shown in "blackline" form); and (iii) acknowledges and accepts all other consequential amendments made to the Conditions and the Trust Deed in relation to the Substitution;

2.            (subject to paragraphs 5 and 6 of this Extraordinary Resolution) authorises, directs, requests and empowers the Issuer, the New Issuer and the Trustee to execute a supplemental trust deed and a supplemental agency agreement to effect the modifications referred to in paragraph 1 of this Extraordinary Resolution;

3.            (subject to paragraphs 5 and 6 of this Extraordinary Resolution) authorises, directs, requests and empowers the Issuer, the New Issuer and the Trustee to execute, deliver (if applicable) and to do all such other deeds, instruments, acts and things as may be necessary, desirable or expedient in their sole opinion to carry out and to give effect to this Extraordinary Resolution and the implementation of the modifications and arrangements referred to in this Extraordinary Resolution, including but not limited to making any consequential amendments necessary or desirable to any document in respect of the Notes or terminate any such document, agreement or arrangement to provide for such modifications and arrangements;

4.            (subject to paragraphs 5 and 6 of this Extraordinary Resolution) sanctions every abrogation, modification, amendment, compromise or arrangement in respect of the rights of the Noteholders appertaining to the Notes against the Issuer, whether or not such rights arise under the Conditions, the Trust Deed, the Agency Agreement or the global certificate relating to the Notes or otherwise, in each case involved in, resulting from or to be effected by the amendments set out in paragraph 1 of this Extraordinary Resolution;

5.            discharges and exonerates the Trustee from any and all liability for which it may have become or may become liable under the Trust Deed or otherwise in respect of any act or omission including, without limitation, in connection with this Extraordinary Resolution or its implementation, the Substitution and modifications referred to in this Extraordinary Resolution and any act or omission taken in connection with this Extraordinary Resolution or the implementation of the Substitution and modifications referred to herein;

6.            agrees and undertakes fully and effectively to indemnify and hold harmless the Trustee from and against all liability which may be suffered or incurred by the Trustee as a result of any claims, actions, demands or proceedings brought or established (including legal fees) which the Trustee may suffer or incur which in any case arise as a result of the Trustee acting in accordance with this Extraordinary Resolution and the Trust Deed;

7.            waives irrevocably any claim Noteholders may have against the Trustee as a result of any liability they may suffer or incur as a result of acting upon this Extraordinary Resolution (including but not limited to circumstances where it is subsequently found that this Extraordinary Resolution is not valid or binding);

8.            confirms that the Noteholders have formed their own view in relation to the actions contemplated under supplemental trust deed and the supplemental agency agreement without any reliance on the Trustee;

9.            acknowledges that, if the Consent Solicitation is terminated by the Issuer prior to the date of this Meeting in accordance with the terms of the Consent Solicitation Memorandum, even in the event that this Extraordinary Resolution is passed at this Meeting, the amendments set out in paragraph 1 of this Extraordinary Resolution shall not be effective, as such amendments are conditional on the Consent Solicitation not having been terminated;

10.          declares that the implementation of this Extraordinary Resolution shall be conditional on:

(a)            the passing of this Extraordinary Resolution; and

(b)            the quorum required for, and the requisite majority of votes cast at, the Meeting being satisfied by Eligible Noteholders, irrespective of any participation at the Meeting by Ineligible Noteholders and further resolves that, in the event the Extraordinary Resolution is passed at the Meeting but this condition is not satisfied, the Chairman of the Meeting is hereby authorised, directed, requested and empowered to adjourn this Meeting on the same basis (including quorum) as for an adjournment of the Meeting where the necessary quorum is not obtained, for the purpose of reconsidering resolutions 1 to 11 of this Extraordinary Resolution (with the exception of resolution 10(b) of this Extraordinary Resolution) at the adjourned Meeting, and in place of the foregoing provisions of resolution 10(b) the relevant condition will be satisfied if the quorum required for, and the requisite majority of votes cast at, the adjourned Meeting are satisfied by Eligible Noteholders irrespective of any participation at the adjourned Meeting by Ineligible Noteholders; and

11.          acknowledges that the following terms, as used in this Extraordinary Resolution, shall have the meanings given below:

"Conditions" means the terms and conditions of the Notes, as completed by the final terms prepared in relation to the Notes;

"Consent Solicitation" means the invitation by the Issuer to all Noteholders to consent to this Extraordinary Resolution;

"Consent Solicitation Memorandum" means the consent solicitation memorandum dated 24 July 2019 prepared by the Issuer in relation to, among other things, the Consent Solicitation;

"Eligible Noteholder" means each Noteholder who is: (i) located and resident outside the United States and is not a U.S. person (as defined in Regulation S under the Securities Act) or a dealer or other professional fiduciary in the United States acting only on a discretionary basis for the benefit or account of non-U.S. persons located outside the United States; (ii) not a retail client as defined in Directive 2014/65/EU (as amended); and (iii) otherwise a person to whom the Consent Solicitation can be lawfully made and that may lawfully participate in the Consent Solicitation;

"Ineligible Noteholder" means a Noteholder who is not an Eligible Noteholder; and

"New Conditions" means the Conditions as so modified to include certain amendments in relation to the Substitution, among other things, as laid out in Annex II (New Conditions and Amended and Restated Final Terms for the MREL Notes) to the Notice of Meetings (as shown in "blackline" form).

BACKGROUND and PROPOSALS

Background

Acquisition by CYBG of the Issuer

On 15 October 2018, CYBG acquired the entire issued share capital of the Issuer pursuant to the Acquisition. As at the date of this Consent Solicitation Memorandum, CYBG is the ultimate holding company of the Issuer and the Group. A simplified diagram of the current structure of the Group is set out in the Consent Solicitation Memorandum.

In connection with the Acquisition, holders of the AT1 Notes were notified on 15 October 2018 that following the purchase by CYBG of the ordinary shares of the Issuer: (i) a "Qualifying Relevant Event" had occurred; (ii) the "Acquiror" was specified as being CYBG; and (iii) the "New Conversion Price" was set at £2.46 (as each such term is defined in the terms and conditions of the AT1 Notes (the "AT1 Conditions"). Consequently, on the occurrence of a Trigger Event (as defined in the AT1 Conditions) the AT1 Notes are convertible into, or exchangeable for, the ordinary shares of CYBG.

Part VII Transfer

The CYBG Group intends to seek court approval for the legal transfer of the business of Virgin Money plc to Clydesdale Bank PLC pursuant to Part VII of FSMA (the "Part VII Transfer"). The court hearing to approve the Part VII Transfer is expected to be held on 26 September 2019. Providing that the court approves the Part VII Transfer, it is expected that the Part VII Transfer scheme effective date (the "Scheme Effective Date") will be 21 October 2019. Following the Part VII Transfer, the Virgin Money plc business and the Clydesdale Bank PLC business will be combined in a single banking entity. The target simplified group structure post Part VII is set out in the Consent Solicitation Memorandum.

The Part VII Transfer forms part of the wider integration plan that CYBG has developed to integrate Virgin Money plc into the CYBG Group. A phased migration of systems and customers and re-branding approach will be adopted. This will be separated into several distinct phases aligned to transaction events that seeks to minimise the complexity to deliver and any impact on customers. This will be achieved in particular by leveraging product maturities and limiting the use of large-scale automated transfers, thereby avoiding any large migration events within the process.

It should be noted, however, that there can be no assurance that the proposed Part VII Transfer will be implemented in its current proposed form, or at all.  See the risk factor titled "There are risks relating to the proposed Part VII Transfer (as defined below) of all or substantially all of the business, operations, assets, liabilities and obligations of Virgin Money plc" in the "Risks Relating to the Group" section of the CYBG Base Prospectus incorporated by reference into the Consent Solicitation Memorandum.

 

On 19 June 2019, CYBG announced its intention to change its name from CYBG PLC to Virgin Money UK PLC by the end of 2019 and it is expected that the brand for the CYBG Group will transition to "Virgin Money" using a phased approach until the end of 2021. All of Virgin Money plc's products and customers will be migrated in phases over time to CYBG's IT platform, with the exception of credit cards where Clydesdale Bank card customers will be migrated to Virgin Money plc's platform.

Implications for Notes post-Part VII Transfer

It is expected that the Part VII Transfer will be completed for a nominal consideration. Following the Part VII Transfer, Virgin Money plc will no longer have material assets or liabilities and the Issuer's investment in Virgin Money plc will be materially written-down. This is expected to result in the Issuer having negative retained earnings and available distributable items (solely as determined by reference to the Issuer's individual financial statements prepared in accordance with the Companies Act 2006).  The Issuer will also have limited cash resources.

Rationale for the Substitutions

In order to protect investor interests, the Issuer is proposing to transfer its obligations as principal debtor under the Notes to CYBG. In contrast to the expected position for the Issuer, CYBG is expected to maintain adequate reserves to facilitate interest payments on the Notes, should the board of directors of CYBG choose to exercise its discretion to make such payments in the case of the AT1 Notes. For information on CYBG's distributable reserves, see "Risk management - Financial risk" on page 33 of the Issuer's 2019 Interim Financial Report which is incorporated by reference into the Consent Solicitation Memorandum.

The transfer of the Issuer's obligations in respect of the Notes to CYBG will consolidate all of the Group's capital and holding company senior debt issuance into one entity (CYBG) and thereby facilitate the Bank of England's preferred "single point of entry" resolution strategy.

Proposals

The purpose of each Consent Solicitation is to invite Eligible Noteholders to consider and, if thought fit, approve certain modifications to the Conditions and the related documents of each Series and in particular, to provide that the Noteholders:

(i)             acknowledge, authorise and accept the substitution of CYBG in place of the Issuer in its capacity as issuer and principal debtor under the Notes and agree to release and waive all rights, claims or entitlements against the Issuer in its capacity as former issuer and principal debtor under the relevant Notes (the "Substitutions" and each a "Substitution");

(ii)            direct the Trustee to enter into the Supplemental Trust Deed and the Supplemental Agency Agreement (in respect of the MREL Notes) and the Amended and Restated Agency Agreement and the Amended and Restated Trust Deed (in respect of the AT1 Notes);

(iii)           acknowledge and accept the relevant New Conditions (and in respect of the AT1 Notes only, with the aim that AT1 Notes will qualify as "hybrid capital instruments" under the Finance Act 2019) from the Implementation Date; and

(iv)           acknowledge and accept other consequential amendments to the relevant Conditions, Trust Deed and Agency Agreement in relation to the Substitutions,

(together, the "Proposals").

For the avoidance of doubt, there is no inter-conditionality between the Extraordinary Resolutions in respect of either Series or the implementation of the Part VII Transfer.

Drafts of the New Conditions showing the changes to be made (in "blackline" form) with respect to each Series are annexed to this Notice.

Results of Consultation with the IA Special Committee

The Proposals have been considered by a special committee (the "Special Committee") of The Investment Association at the request of the Issuer. The members of the Special Committee, who hold in aggregate approximately: (i) 18.58 per cent. of the current principal amount outstanding of the AT1 Notes; and (ii) 41.95 per cent. of the current principal amount outstanding of the MREL Notes, have examined the Proposals. They have informed the Issuer: (i) that they find the Proposals acceptable; and (ii) that, subject to client and other approvals, they intend to vote in favour of the Proposals in respect of their holdings of the relevant Notes.

The Special Committee has advised the Issuer that this recommendation relates only to the proposals set out in the Consent Solicitation Memorandum with respect to the Notes and not to any future offers or proposals which the Issuer may make.

Documents Incorporated by Reference

This Notice should be read and construed in conjunction with the following documents, each of which is expressly incorporated by reference herein and available (or, in the case of the third quarter trading update of CYBG, will be available) on CYBG PLC's ("CYBG" or the "New Issuer") website (www.cybg.com). Other than as set forth below, information on such website does not form part of this document and is not incorporated by reference herein. References to this Notice shall mean this document together with each document listed below:

·      the following parts of CYBG's interim financial report for the six months ended 31 March 2019 (the "2019 Interim Financial Report"):

"Risk management - Financial risk", set out on pages 28 to 36 (inclusive) but excluding the column entitled "Pro forma - 30 Sep 2019" found in the "Capital position and CET1 (unaudited)" table on page 32;

the unaudited consolidated financial statements and the independent auditor's review report of CYBG dated 15 May 2019, confirming CYBG's trading results in respect of the six months ended 31 March 2019, set out on pages 42 to 79 (inclusive); and

"Glossary", set out on pages 81 to 82 (inclusive);

·      the audited consolidated financial statements and the independent auditor's audit report of CYBG in respect of the year ended 30 September 2018 and glossary set out on pages 172 to 254 (inclusive) of CYBG's 2018 Annual Report and Accounts (the "2018 Audited Financial Statements");

·      the "Risks Relating to the Group" and "Regulatory Risks" sections of the base prospectus dated 1 July 2019 prepared by CYBG in relation to its £10,000,000,000 Global Medium Term Note Programme (the "CYBG Base Prospectus");

·      upon its release (which is expected to be on 30 July 2019), the third quarter trading update of CYBG; and

·      the audited financial statements and the independent auditor's audit report of the Issuer in respect of the year ended 31 December 2018.

In addition, the following documents (as applicable) are available for inspection and/or collection: (a) at any time during normal business hours on any weekday (Saturdays, Sundays and bank and other public holidays excepted) prior to and during the relevant Meetings, at the office of the Issuer at Jubilee House, Gosforth, Newcastle upon Tyne NE3 4PL, United Kingdom and at the office of the Tabulation Agent at Tankerton Works, 12 Argyle Walk, London WC1H 8HA, United Kingdom; and (b) at the relevant Meetings and at the offices of Clifford Chance LLP, 10 Upper Bank Street, London E14 5JJ for 15 minutes before the relevant Meeting:

·      the Consent Solicitation Memorandum (available only to Eligible Noteholders);

·      this Notice;

·      each Trust Deed;

·      each Agency Agreement;

·      the current draft of the Amended and Restated Trust Deed;

·      the current draft of the Amended and Restated Agency Agreement;

·      the current draft of the Supplemental Trust Deed (attaching the New Conditions and the Amended and Restated Final Terms); and

·      the current draft of the Supplemental Agency Agreement.

Any revised version of the draft Supplemental Trust Deed, the draft Supplemental Agency Agreement, the draft Amended and Restated Trust Deed and the draft Amended and Restated Agency Agreement will be made available as described above and marked to indicate changes to the draft made available on the date of this Notice and will supersede the previous drafts of the relevant documents and Noteholders will be deemed to have notice of any such changes.

Such information shall be incorporated in, and form part of, this Notice, save that any statement contained in the information which is incorporated by reference herein shall be modified or superseded for the purpose of this Notice to the extent that a statement contained herein modifies or supersedes such earlier statement (whether expressly, by implication or otherwise). Any statement so modified or superseded shall not, except as so modified or superseded, constitute a part of this Notice.

Those parts of the documents specified above which are not specifically incorporated by reference in this Notice should not form part of this Notice and are either not relevant for investors in relation to the Consent Solicitations or the relevant information is included elsewhere in this Notice.

CONSENT SOLICITATIONS - ELIGIBLE NOTEHOLDERS

The Consent Solicitations are only being made, and the Consent Solicitation Memorandum and any other documents or materials relating to the Consent Solicitations are only for distribution or to be made available to Eligible Noteholders.

Eligible Noteholders may obtain, from the date of this Notice, a copy of the Consent Solicitation Memorandum from the Tabulation Agent, the contact details for which are set out below. In order to receive a copy of the Consent Solicitation Memorandum, a Noteholder will be required to provide confirmation as to his or her status as an Eligible Noteholder.

Pursuant to each Consent Solicitation, each Noteholder from whom a valid Electronic Voting Instruction (as defined in the Consent Solicitation Memorandum) is received by the Tabulation Agent by the deadline specified in the Consent Solicitation Memorandum will, subject to the conditions set out in the Consent Solicitation Memorandum, be eligible to receive payment of an amount equal to: (i) in the case of the AT1 Notes, 5.00 per cent. of the principal amount of the AT1 Notes; and (ii) in the case of the MREL Notes, 5.00 per cent. of the principal amount of the MREL Notes, in each case that are the subject of the relevant Electronic Voting Instruction (the "Early Participation Fee"), all as more fully described in the Consent Solicitation Memorandum.

INELIGIBLE NOTEHOLDER PAYMENT

Ineligible Noteholder Payment

Any Noteholder who is not eligible to participate in the Consent Solicitations, on the basis that such Noteholder is either: (i) located and resident outside the United States and is a U.S. person (as defined in Regulation S under the Securities Act) or a dealer or other professional fiduciary in the United States acting only on a discretionary basis for the benefit or account of non-U.S. persons located outside the United States; (ii) a retail client as defined in Directive 2014/65/EU (as amended); (iii) otherwise a person to whom the Consent Solicitations cannot lawfully be made and that may not lawfully participate in the Consent Solicitations (each an "Ineligible Noteholder") may be eligible, to the extent permitted by applicable laws and regulations, to receive an amount equivalent to the applicable Early Participation Fee (which is an amount equal to: (i) in the case of the AT1 Notes, 5.00 per cent. of the principal amount of the AT1 Notes; and (ii) in the case of the MREL Notes, 5.00 per cent. of the principal amount of the MREL Notes, in each case that are the subject of the relevant Ineligible Noteholder Instruction (as defined below)) (the "Ineligible Noteholder Payment").

To be eligible for the Ineligible Noteholder Payment, an Ineligible Noteholder must deliver, or arrange to have delivered on its behalf, a valid Ineligible Noteholder Instruction that is received by the Tabulation Agent by 4:00 p.m. (London time) on 7 August 2019 (the "Ineligible Instruction Deadline") and is not subsequently revoked.

Only an Ineligible Noteholder may submit Ineligible Noteholder Instructions and be eligible to receive the Ineligible Noteholder Payment. By delivering, or arranging for the delivery on its behalf, of an Ineligible Noteholder Instruction in accordance with the procedures described below, a Noteholder shall be deemed to agree, acknowledge and represent to the Issuer, New Issuer, the Trustee, the Registrar, the Principal Paying Agent, the Tabulation Agent and the Solicitation Agents that it is an Ineligible Noteholder. Eligibility for the Ineligible Noteholder Payment is subject in each case to the Extraordinary Resolutions being passed at the relevant Meeting (or any adjourned such Meeting) and implemented.

Where payable, Ineligible Noteholder Payments are expected to be paid by the Issuer to the relevant Ineligible Noteholder as soon as reasonably practicable following the passing of the relevant Extraordinary Resolution at the relevant Meeting or (if applicable) adjourned relevant Meeting and no later than the Implementation Date.

By submitting an Ineligible Noteholder Instruction by the Ineligible Instruction Deadline, an Ineligible Noteholder may either confirm only its status as an Ineligible Noteholder and waive its right to attend and vote (or be represented at) the relevant Meeting (which is all that is required for that Ineligible Noteholder to be eligible for the Ineligible Noteholder Payment) or appoint the Tabulation Agent as their proxy to attend the relevant Meeting (and any adjourned such Meeting) and will be deemed to represent that: (a) it is an Ineligible Noteholder, (b) it is not a person that is, or is directly or indirectly owned or controlled by a person that is, described or designated in (i) the most current "Specially Designated Nationals and Blocked Persons" list (which as of the date hereof can be found at: https://www.treasury.gov/ofac/downloads/sdnlist.pdf) or (ii) the Foreign Sanctions Evaders List (which as of the date hereof can be found at: http://www.treasury.gov/ofac/downloads/fse/fselist.pdf) or (iii) the most current "Consolidated list of persons, groups and entities subject to EU financial sanctions" (which as of the date hereof can be found at: http://eeas.europa.eu/cfsp/sanctions/consol-list/index_en.htm); or that is otherwise the subject of any sanctions administered or enforced by the United States government, the United Nations; the European Union (or any of its member states including, without limitation, the United Kingdom); any other equivalent governmental or regulatory authority, institution or agency which administers economic, financial or trade sanctions; or the respective governmental institutions and agencies of any of the foregoing including, without limitation, the Office of Foreign Assets Control of the US Department of the Treasury, the United States Department of State, the United States Department of Commerce and Her Majesty's Treasury, other than solely by virtue of their inclusion in: (I) the most current "Sectoral Sanctions Identifications" list (which as of the date hereof can be found at: https://www.treasury.gov/ofac/downloads/ssi/ssilist.pdf) (the "SSI List"), (II) Annexes 3, 4, 5 and 6 of Council Regulation No. 833/2014, as amended by Council Regulation No. 960/2014 (the "EU Annexes"), or (III) any other list maintained by a Sanctions Authority, with similar effect to the SSI List or the EU Annexes; (b) none of the Issuer, New Issuer, the Trustee, the Registrar, the Principal Paying Agent, the Solicitation Agents and the Tabulation Agent have given it any information with respect to the relevant Extraordinary Resolution save as expressly set out in this Notice nor has any of them expressed any opinion about the term of any Extraordinary Resolution or made any recommendation to it as to whether it should participate at the relevant Meeting or whether to vote in favour of or against (or how to vote in respect of) the relevant Extraordinary Resolution and it has made its own decision based on financial, tax or legal advice it has deemed necessary to seek and is assuming all the risks inherent in voting on the relevant Extraordinary Resolution; and (c) no information has been provided to it by the Issuer, the New Issuer, the Trustee, the Registrar, the Principal Paying Agent, the Solicitation Agents or the Tabulation Agent, or any of their respective directors or employees, with regard to the tax consequences for Noteholders arising from the implementation of any Extraordinary Resolution or the receipt by it of the Ineligible Noteholder Payment (if applicable), and it acknowledges that it is solely liable for any taxes and similar or related payments imposed on it under the laws of any applicable jurisdiction as a result of its receipt of any Ineligible Noteholder Payment, and agrees that it will not and does not have any right of recourse (whether by way of reimbursement, indemnity or otherwise) against the Issuer, the New Issuer, the Trustee, the Registrar, the Principal Paying Agent, the Solicitation Agents or the Tabulation Agent, or any of their respective directors or employees, or any other person in respect of such taxes and payments.

Submission of Ineligible Noteholder Instructions

The submission of Ineligible Noteholder Instructions will be deemed to have occurred upon receipt by the Tabulation Agent from Euroclear Bank SA/NV ("Euroclear") or Clearstream Banking S.A. ("Clearstream, Luxembourg"), as applicable, of a valid instruction (an "Ineligible Noteholder Instruction") submitted in accordance with the requirements of Euroclear or Clearstream, Luxembourg, as applicable. Each such Ineligible Noteholder Instruction must specify, among other things, the aggregate principal amount of the Notes to which such Ineligible Noteholder Instruction relates, and that the Ineligible Noteholder wishes to abstain from voting, or instruct the Tabulation Agent to attend the relevant Meeting (and any adjourned such relevant Meeting) and to vote in favour of the relevant Extraordinary Resolution. The receipt of such Ineligible Noteholder Instruction by Euroclear or Clearstream, Luxembourg, as applicable, will be acknowledged in accordance with the standard practices of Euroclear or Clearstream, Luxembourg, as applicable, and will result in the blocking of the relevant Notes in the relevant Ineligible Noteholder's account with Euroclear or Clearstream, Luxembourg, as applicable, so that no transfers may be effected in relation to such Notes until the earlier of (i) the date on which the relevant Ineligible Noteholder Instruction is validly revoked (including their automatic revocation on the termination of the related Consent Solicitation) and (ii) the conclusion of the relevant Meeting (or, if applicable, any adjourned such Meeting).

Only Direct Participants (as defined under "Voting and Quorum" below) may submit Ineligible Noteholder Instructions. Each beneficial owner of Notes who is an Ineligible Noteholder and is not a Direct Participant, must arrange for the Direct Participant through which such beneficial owner of Notes who is an Ineligible Noteholder holds its Notes to submit an Ineligible Noteholder Instruction on its behalf to Euroclear or Clearstream, Luxembourg, as applicable, before the deadlines specified by the relevant clearing system.

Noteholders are advised to check with any bank, securities broker or other intermediary through which they hold their Notes when such intermediary would need to receive instructions from a Noteholder in order for such Noteholder to submit an Ineligible Noteholder Instruction by the deadline specified above. The deadlines set by any such intermediary and each clearing system for the submission and revocation of Ineligible Noteholder Instructions will be earlier than the deadline specified above.

SELLING RESTRICTIONS

If an Extraordinary Resolution is passed and implemented in respect of the Notes, until the expiry of the period of 40 days after the date of the Supplemental Trust Deed and the Amended and Restated Trust Deed, sales of the Notes may not be made in the United States or to U.S. persons unless made outside the United States pursuant to Rule 903 and 904 of Regulation S.

GENERAL

Copies of the Trust Deeds (as amended, restated and/or supplemented as at the issue date of each Series of Notes) are available for inspection by Noteholders: (i) on and from the date of this Notice up to and including the date of the Meetings, at the specified offices of the Tabulation Agent during normal business hours on any week day (Saturdays, Sundays and public holidays excepted) up to and including the date of the Meetings; and (ii) at the Meetings, and at the offices of Clifford Chance LLP at 10 Upper Bank Street, London, E14 5JJ for 15 minutes before the Meetings.

The attention of Noteholders is particularly drawn to the procedures for voting, quorum and other requirements for the passing of the Extraordinary Resolutions at the Meetings or any meeting held following any adjournment of any Meeting, which are set out in "Voting and Quorum" below. Having regard to such requirements, Noteholders are strongly urged either to attend the relevant Meeting or to take steps to be represented at the relevant Meeting (including by way of submitting Electronic Voting Instructions) as soon as possible.

VOTING AND QUORUM

Noteholders who have submitted and not revoked (in the limited circumstances in which revocation is permitted) a valid Electronic Voting Instruction in respect of the relevant Extraordinary Resolution by 10.00 a.m. (London Time) on 13 August 2019 (the "Expiration Deadline"), by which they will have given instructions for the appointment of the Tabulation Agent by the Registrar as their proxy under a block voting instruction to vote in favour of or against (as specified in the relevant Electronic Voting Instruction) the relevant Extraordinary Resolution at the relevant Meeting (or any adjourned such Meeting) need take no further action to be represented at the relevant Meeting (or any such adjourned such Meeting). Noteholders are advised to read the Consent Solicitation Memorandum for details of the process when submitting Electronic Voting Instructions.

Noteholders who have not submitted or have submitted and subsequently revoked (in the limited circumstances in which such revocation is permitted) an Electronic Voting Instruction in respect of the relevant Extraordinary Resolution (and therefore do not qualify for an Early Participation Fee) should take note of the provisions set out below detailing how such Noteholders can attend or take steps to be represented at the relevant Meeting (references to which, for the purpose of such provisions, include, unless the context otherwise requires, any adjourned such Meeting).

1.            Subject as set out below, the provisions governing the convening and holding of each Meeting are set out: (i) in the case of the AT1 Notes, in schedule 3 to the AT1 Notes Trust Deed; and (ii) in the case of the MREL Notes, in schedule 4 to the MREL Notes Trust Deed; and in each case copies of which are available from the date of this Notice to the conclusion of the Meetings (or any adjourned Meetings) as referred to above. For the purposes of the Meetings, a "Noteholder" means a Direct Participant.

2.            The AT1 Notes are represented by a global certificate registered in the name of a nominee of a common depositary for Euroclear and/or Clearstream, Luxembourg and the MREL Notes are represented by a global certificate registered in the name of a nominee for a common safekeeper for Euroclear and/or Clearstream, Luxembourg. For the purposes of this Notice, a "Direct Participant" means each person who is for the time being shown in the records of Euroclear and/or Clearstream, Luxembourg as the holder of a particular principal amount of the relevant Notes.

A Direct Participant or beneficial owner of Notes wishing to attend the relevant Meeting in person must produce at the relevant Meeting a valid voting certificate issued by the Registrar relating to the Notes in respect of which it wishes to vote.

A Direct Participant or beneficial owner of the Notes not wishing to attend and vote at the relevant Meeting in person may either deliver its valid voting certificate(s) to the person whom it wishes to attend on its behalf or the Direct Participant may (or the beneficial owner of the Notes may arrange for the relevant Direct Participant on its behalf to) give a voting instruction (by giving voting and blocking instructions to Euroclear or Clearstream, Luxembourg (a "Euroclear/Clearstream Instruction") in accordance with the procedures of Euroclear or Clearstream, Luxembourg, as applicable) requiring the Registrar to include the votes attributable to its Notes in a block voting instruction issued by the Registrar for the relevant Meeting or any adjourned such Meeting, in which case the Registrar shall appoint the Tabulation Agent as proxy to attend and vote at such Meeting in accordance with such Direct Participant or beneficial owner's instructions.

A Direct Participant must request the relevant clearing system to block the relevant Notes in its account not later than 48 hours before the time appointed for holding the relevant Meeting in order to obtain voting certificates or give voting instructions in respect of such Meeting. In the case of Euroclear/Clearstream Instructions, such blocking instructions are part of the electronic instructions that must be given. Notes so blocked will not be released until the earlier of:

(a)           the conclusion of the relevant Meeting (or, if applicable, any adjourned such Meeting); and

(b)          

(i)           in respect of voting certificate(s), the surrender to the relevant Registrar of such voting certificate(s) and notification by the relevant Registrar to the relevant clearing system of such surrender or the compliance in such any other manner with the rules of the relevant clearing system relating to such surrender; or

(ii)          in respect of block voting instructions, not less than 48 hours before the time for which the relevant Meeting (or, if applicable, any adjourned such Meeting) is convened, the notification in writing of any revocation of a Direct Participant's previous instructions to the Registrar, in each case at least 24 hours before the time appointed for holding the relevant Meeting and such Notes ceasing in accordance with the procedures of the relevant clearing system and with the agreement of the relevant Registrar to be held to its order or under its control.

Noteholders should note that voting instructions (unless validly revoked) given and voting certificates obtained or block voting instructions issued in respect of a Meeting shall remain valid for any adjourned such Meeting.

3.            Quorum for Meetings

AT1 Notes

In respect of the Meeting convened for the AT1 Notes, the quorum required to pass the Extraordinary Resolution is one or more persons present holding Notes or voting certificates or being proxies or representatives and holding or representing not less than 66 2/3 per cent. of the aggregate principal amount of the outstanding AT1 Notes (such quorum being a "special quorum resolution" as defined in the AT1 Notes Trust Deed).

MREL Notes

In respect of the Meeting convened for the MREL Notes, the quorum required to pass the Extraordinary Resolution is one or more persons present holding Notes or voting certificates or being proxies or representatives and holding or representing more than half of the aggregate principal amount of the outstanding MREL Notes.

4.            If a quorum is not present within 15 minutes after the time appointed for the relevant Meeting, such Meeting will be adjourned for: (i) not less than 13 days and not more than 42 days (in the case of the AT1 Notes); and (ii) not less than 14 days and not more than 42 days (in the case of the MREL Notes), and in each case at a place appointed by the Chairman and the relevant Extraordinary Resolution will be considered at such adjourned Meeting (notice of which will be given to the Noteholders in accordance with the relevant Conditions and the relevant Trust Deed). At an adjourned Meeting, one or more persons present and holding or representing: (i) not less than 33 1/3 per cent. of the aggregate principal amount outstanding of the Notes (in the case of the AT1 Notes only); and (ii) the fraction of the aggregate principal amount of the outstanding Notes represented or held by the voters actually present at the adjourned Meeting (in the case of the MREL Notes only), will form a quorum. The holding of any adjourned Meeting will be subject to the Issuer giving at least 10 days' notice (exclusive of the day on which the notice is given and of the day on which the Meeting is to be resumed) in accordance with the relevant Conditions and the relevant Trust Deed that such adjourned Meeting is to be held.

5.            The implementation of the relevant Extraordinary Resolution is conditional on the quorum required for, and the requisite majority of votes cast at, the relevant Meeting being satisfied by Eligible Noteholders, irrespective of any participation at the Meeting by Ineligible Noteholders.

6.            Every question submitted to a Meeting shall be decided in the first instance by a show of hands. Unless a poll is (before or at the time that the result is declared) demanded by the Chairman, the Trustee, the Issuer or any Noteholder present or proxy or representative representing one fiftieth/2 per cent. of the principal amount of the relevant Notes the for the time being outstanding, a declaration by the Chairman that a resolution has been passed or carried by a particular majority or lost or not carried by a particular majority shall be conclusive evidence of the fact without proof of the number or proportion of the votes recorded in favour of or against the relevant Extraordinary Resolution.

At each Meeting: (i) on a show of hands every person who is present in person and produces a voting certificate or is a proxy or representative shall have one vote; and (ii) on a poll every person who is so present shall have one vote in respect of each £1 (as applicable) in principal amount of the outstanding Notes of the relevant Series so represented by the voting certificate or in respect of which that person is a proxy or representative.

7.            To be passed at the relevant Meeting, an Extraordinary Resolution requires a majority in favour consisting of not less than 75 per cent. of the votes cast. If passed, an Extraordinary Resolution will be binding on all Noteholders of the relevant Series, whether or not present at the relevant Meeting and whether or not voting.

8.            The Issuer shall give notice of the passing of the Extraordinary Resolutions to Noteholders within 14 days but failure to do shall not invalidate the Extraordinary Resolutions.

This Notice is given by Virgin Money Holdings (UK) plc. Noteholders should contact the following for further information:

The Solicitation Agents

Barclays Bank PLC

1 Churchill Place

Canary Wharf

London E14 5HP

United Kingdom

Telephone:           +44 (0) 20 3134 8515

Attention:             Liability Management Group
Email:                    [email protected]

Deutsche Bank AG, London Branch

Winchester House

1 Great Winchester Street

London EC2N 2DB

United Kingdom

Telephone:           +44 (0) 207 545 8011

Attention:             Liability Management Team

The Solicitation Agents are not acting through a U.S. broker-dealer affiliate and, accordingly, will not discuss the Consent Solicitations or the contents of this Notice with any Noteholder who is unable to confirm it is not located or resident in the United States.

Tabulation Agent

Lucid Issuer Services Limited
Tankerton Works

12 Argyle Walk

London WC1H 8HA

United Kingdom

Telephone:           +44 20 7704 0880

Attention:             David Shilson
Email:                    [email protected]

Dated: 24 July 2019

ANNEX II

NEW CONDITIONS AND AMENDED AND RESTATED FINAL TERMS FOR THE MREL NOTES

http://www.rns-pdf.londonstockexchange.com/rns/5563G_2-2019-7-24.pdf


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.
 
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