TIDM31UH
RNS Number : 9908Q
Auburn Securities 4 PLC
27 October 2011
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 AS TO ANY TAX CONSEQUENCES, IMMEDIATELY FROM THEIR
STOCKBROKER, SOLICITOR, ACCOUNTANT OR OTHER INDEPENDENT FINANCIAL
OR LEGAL ADVISER.
IMPORTANT NOTICE TO THE HOLDERS OF THE
GBP597,500,000 Class A2 Mortgage Backed Floating Rate Notes due
October 2041
(ISIN: XS0202810064)
(Common Code: 020281006)
GBP15,000,000 Class M Mortgage Backed Floating Rate Notes due
October 2041
(ISIN: XS0202810734)
(Common Code: 020281073)
GBP40,000,000 Class B Mortgage Backed Floating Rate Notes due
October 2041
(ISIN: XS0202811039)
(Common Code: 020281103)
GBP40,000,000 Class C Mortgage Backed Floating Rate Notes due
October 2041
(ISIN: XS0202811625)
(Common Code: 020281162)
GBP25,000,000 Class D Mortgage Backed Floating Rate Notes due
October 2041
(ISIN: XS0202812276)
(Common Code: 020281227)
GBP12,500,000 Class E Mortgage Backed Floating Rate Notes due
October 2041
(ISIN: XS0202812516)
(Common Code: 020281251)
(the "Notes")
issued by AUBURN SECURITIES 4 PLC (incorporated in England and
Wales with limited liability under Registered Number 05183076) (the
"Issuer") on 11 October 2004
Capitalised terms used but not otherwise defined herein shall
have the meanings ascribed to them in the Terms and Conditions of
the Notes set out in the Trust Deed (the "Trust Deed") dated 11
October 2004 (as amended) and entered into between the Issuer and
Citicorp Trustee Company Limited (the "Trustee"), the master
definitions schedule dated 11 October 2004 (the "Master Definitions
Schedule") and the Amendment Deed (as defined below).
In accordance with their respective mortgage arrangements,
customers of Capital Homes Limited (the "Originator") make mortgage
payments into the Collection Account held at Barclays Bank PLC
("Barclays").
A majority of the mortgage customers make their mortgage
payments by direct debit. Such electronic payments are made in
accordance with the direct debit scheme (the "Scheme") and are
governed by rules (the "Bacs Rules") established by BACS Payment
Schemes Limited ("Bacs"). Barclays currently provides, as Account
Bank, direct debit sponsorship to the Originator (the
"Sponsorship"), together with related direct debit services (the
"Services").
Pursuant to the Bacs Rules, any company that wishes to receive
payments by direct debit must become a Bacs approved servicer user
(a "Service User"). In accordance with the Bacs Rules prior to 30
April 2011, once approved, a Service User was allocated a single
Service User number (a "SUN") that was used by financial
institutions to correctly allocate direct debit payments to the
relevant Service User. As required by the new Bacs Rules, the
Originator has established separate SUNs for each of its various
securitisation transactions.
Barclays provide Sponsorship for the Collection Account in
relation to indemnity claims that may be made by customers against
the Originator as the Service User.
The Bacs Rules were updated in October 2010 and the changes to
make direct debit payments automatic came into effect on 30 April
2011. Before the changes to the Bacs Rules, indemnity claims were
raised and settled manually by Barclays. Barclays have informed us
that pursuant to the updated Bacs Rules, payments which are the
subject of an indemnity claim will be required to be automatically
clawed back from the Collection Account. In accordance with
Barclays' new internal arrangements, any other amount (other than a
direct debit amount) that has been returned unpaid, has been
recalled, has been reversed or otherwise reclaimed, will also be
automatically clawed back from the Collection Account.
Barclays' agreement to the continued provision of the
Sponsorship and the Services is subject to certain modifications
being made to the Documents to address concerns Barclays have in
relation to their liability regarding customer payments made by
direct debit and their compliance with rules governing payments
made by direct debit. Such modifications include documenting and/or
clarifying Barclays' right of set off against the Collection
Account and Transaction Account in relation to liability that it
may incur due to amounts paid by direct debit, cheque, charge card
or any other method being returned unpaid, recalled, reversed or
otherwise reclaimed for whatever reason.
Barclays confirmed to the Issuer that they would no longer agree
to continue to provide Sponsorship or Services to the Originator in
relation to the Collection Account unless the aforementioned
modifications and clarifications were made by the relevant parties
to the Documents. If Barclays had ceased to provide such
Sponsorship or Services in relation to the Collection Account,
amounts paid by customers using the Scheme would no longer have
been able to be received into the Collection Account. This would
have resulted in a material disruption to the funds available from
customers to pay Noteholders in accordance with the Documents. Such
a disruption may have meant that the Issuer would have insufficient
funds to pay all amounts due to Noteholders under the Notes when
they fall due. The Issuer therefore confirmed to the Trustee that
it was in the interests of the Noteholders for the Trustee to
consent to the modification of the Master Definitions Schedule, the
Cash/Bond Administration Agreement, the Bank Agreement (Transaction
Account) and the Trust Deed, on the terms of the Amendment Deed (as
defined below) and the creation by the Originator of the new SUN so
that Barclays agreed to continue to provide Sponsorship and
Services in relation to the Collection Account and that there would
be materially prejudicial implications for Noteholders if the
Trustee had not done so. Furthermore, the Issuer concluded that, as
far as it was aware and having made all reasonable enquiries, the
only commercially feasible course was to accommodate Barclays'
requirements.
It has come to the Issuer's attention that Barclays take out its
normal banking transaction fees directly from the Bank Accounts on
a payment transaction by transaction basis (in accordance with its
usual banking arrangements), rather than just on an Interest
Payment Date in accordance with the relevant priority of payments.
Barclays has informed the Trustee and the Issuer that its
transaction fees are typically no more than GBP500 per account per
quarter and as such are de minimis in relation to the cash flows
for the Transaction. As the transaction fees are paid to Barclays
in priority to Noteholders pursuant to the priority of payments,
the Issuer is satisfied that timing of the payment of such
transaction fees is not materially prejudicial to the interests of
Noteholders.
Please also note that Fitch Ratings Limited released an
announcement on the basis of some early drafts of the pro forma
amendment documents confirming that it did not consider that the
proposed amendments will impact the ratings of the Notes. Some
changes were made to the amendment documents since the drafts based
on which the Fitch announcement was made, and Fitch is aware of the
approach taken in respect of the changes but has not published any
updated announcements. Moody's and S&P have each provided a
written confirmation to the Issuer that the implementation of the
amendments will not, in and of itself, result in a reduction or
withdrawal of the current ratings on the Notes.
In light of the above, an amendment deed dated 25 October 2011
(the "Amendment Deed") was entered into between, amongst others,
Barclays, the Trustee and the Issuer in order to accommodate
Barclays' requirements for the continued provision of Sponsorship
and the Services. Such Amendment Deed is available for inspection
at the registered office of the Issuer during normal business
hours.
This Notice is given by the Issuer.
Should you have any queries concerning the information contained
in this notice please contact:
Auburn Securities 4 plc
c/o Wilmington Trust SP Services (London) Limited
Third Floor
1 King's Arms Yard
London EC2R 7AF
Email: complianceteam@wilmingtontrust.com
27 October 2011
This information is provided by RNS
The company news service from the London Stock Exchange
END
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