93AQ Warwick Ca49

TIDM93AQ

RNS Number : 4702Y

Warwick Finance Res. Mort. No.3 plc

09 September 2020

NOTICE OF AMMENT TO NOTEHOLDERS

Warwick Finance Residential Mortgages No.3 PLC

(incorporated with limited liability in England, with registered number 10917258)

1 Bartholomew Lane

London EC2N 2AX

(the "Issuer")

GBP1,469,182,000 Class A Mortgage Backed Notes due 2049 (Rule 144A ISIN - XS1697686928)

GBP128,553,000 Class B Mortgage Backed Notes due 2049 (Rule 144A ISIN - XS1697693627)

GBP64,276,000 Class C Mortgage Backed Notes due 2049 (Rule 144A ISIN - XS1697698188)

GBP36,729,000 Class D Mortgage Backed Notes due 2049 (Rule 144A ISIN - XS1697701826)

GBP36,729,000 Class E Mortgage Backed Notes due 2049 (Rule 144A ISIN - XS1697706890)

(the "Notes" and the holders thereof, the "Noteholders")

and

10,000 Principal Residual Certificates (Rule 144A ISIN - XS1697546247)

10,000 Revenue Residual Certificates (Rule 144A ISIN - XS1697546080)

(the "Certificates" and the holders thereof, the "Certificateholders")

9 September 2020

Pursuant to the terms and conditions of the Notes and the Certificates, we hereby give you notice of the following amendments to the:

   1.   Trust Deed; 
   2.   Cash Management Agreement; 
   3.   Replacement Cash Management Agreement; 
   4.   Back-Up Cash Management Agreement; 
   5.   Master Definitions and Construction Schedule; 
   6.   Deed of Charge; and 
   7.   Mortgage Sale Agreement, 

each agreement originally entered into by the Issuer on 19 October 2017 and each as amended and restated on or about the date hereof (the "Amendment Documents"), with the amendments effected thereby due to become fully effective on and with effect from 21 September 2020.

Capitalised terms used but not otherwise defined herein shall have the meaning given to them in the Transaction Documents as amended by the Amendment Documents.

Pursuant to an Extraordinary Resolution in writing of the holders of each Class of Notes and the holders of the Certificates, the Note Trustee has been directed, and the other relevant parties have agreed, to enter into documentation in order to vary the terms and conditions of the Notes and the Certificates and the other relevant Transaction Documents to reflect the following, amongst other matters:

Changes to the Rate of Interest and the Interest Amounts

1. Condition 5.3 (Rate of Interest) and Condition 5.4 (Determination of Rates of Interest and Interest Amounts) of Condition 5 (Interest) shall be deleted and replaced with the following (with consequential amendments to the relevant definitions in the Master Definitions and Construction Schedule):

   5.3        Rate of Interest 

(a) The rate of interest payable from time to time in respect of each Class of Notes (each a "Rate of Interest" and together the "Rates of Interest") will be determined by the Agent Bank on the basis of the following provisions:

(i) the Rate of Interest will be, in respect of any Interest Period, the Compounded Daily SONIA determined as at the related Interest Determination Date plus the Relevant Margin in respect of each Class, and in the event that the Rate of Interest is less than zero per cent., the Rate of Interest shall be deemed to be zero per cent. There will be no maximum

Rate of Interest; and

(ii) in the event that the Rate of Interest cannot be determined in accordance with the foregoing provisions by the Agent Bank, the Rate of Interest shall be (i) that determined as at the last preceding Interest Determination Date or (ii) if there is no such preceding Interest Determination Date, the initial Rate of Interest which would have been applicable to the relevant Class of Notes for the first relevant Interest Period had the Notes been in issue for a period equal in duration to the scheduled first Interest Period but ending on (and excluding) that first Interest Payment Date.

   (b)        In these Conditions (except where otherwise defined), the expression: 

(i) "Business Day" means a day (other than a Saturday or a Sunday) on which banks are generally open for business in London;

(ii) "Compounded Daily SONIA" means the rate of return of a daily compound interest investment (with the daily Sterling Overnight Index Average as the reference rate for the calculation of interest) and will be calculated by the Agent Bank as at the relevant Interest Determination Date, as follows, and the resulting percentage will be rounded if necessary to the fifth decimal place, with 0.000005 being rounded upwards:

Where:

"d" is the number of calendar days in the relevant Interest Period;

" d(o) " is the number of Business Days in the relevant Interest Period;

"i" is a series of whole numbers from one to d(o) , each representing the relevant Business Day in chronological order from, and including, the first Business Day in the relevant Interest Period;

"LBD" means a Business Day;

" n(i) ", for any day "i", means the number of calendar days from and including such day "i" up to but excluding the following Business Day;

"p" means for any Interest Period, five Business Days; and

" SONIA i-pLBD " means in respect of any Business Day falling in the relevant Interest Period, the Relevant Screen Rate for the Business Day falling "p" Business Days prior to that Business Day "i";

(iii) "Interest Determination Date" means the fifth Business Day before the Interest Payment Date for which the relevant Rate of Interest and Interest Amount will apply;

(iv) "Observation Period" means the period from and including the date falling five Business Days prior to the first day of the relevant Interest Period and ending on, but excluding, the date falling five Business Days prior to the Interest Payment Date for such Interest Period (or, if applicable, the date falling five Business Days prior to any other date on which a payment of interest is to be made in respect of the Notes);

   (v)        "Relevant Margin" means: 

in respect of each Class of the Notes the following percentage per annum:

   (1)        in respect of the Class A Notes, 0.95 per cent. per annum (the "Class A Margin"); 
   (2)        in respect of the Class B Notes, 1.65 per cent. per annum (the "Class B Margin"); 
   (3)        in respect of the Class C Notes, 2.15 per cent. per annum (the "Class C Margin"); 
   (4)        in respect of the Class D Notes, 2.65 per cent. per annum (the "Class D Margin"); 
   (5)        in respect of the Class E Notes, 3.15 per cent. per annum (the "Class E Margin"); 

(vi) "Relevant Screen Rate" means in respect of any Business Day, a reference rate equal to the daily Sterling Overnight Index Average ("SONIA") rate for such Business Day as provided by the administrator of SONIA to authorised distributors and as then published on the Relevant Screen or, if the Relevant Screen is unavailable, as otherwise published by such authorised distributors (on the Business Day immediately following such Business Day). If, in respect of any Business Day in the relevant Observation Period, the Agent Bank determines that the Relevant Screen Rate is not available on the Relevant Screen or has not otherwise been published by the relevant authorised distributors, such Relevant Screen Rate shall be: (i) the Bank of England's Bank Rate (the "Bank Rate") prevailing at close of business on the relevant Business Day; plus (ii) the mean of the spread of the Relevant Screen Rate to the Bank Rate over the previous five days on which a Relevant Screen Rate has been published, excluding the highest spread (or, if there is more than one highest spread, one only of those highest spreads) and lowest spread (or, if there is more than one lowest spread, one only of those lowest spreads) to the Bank Rate;

(vii) "Relevant Screen" means the Reuters Screen SONIA Page or such other page as may replace Reuters Screen SONIA on that service for the purpose of displaying such information or if that service ceases to display such information, such page as displays such information on such service as may replace such screen or any other medium for electronic display of data as may be previously approved in writing by the Note Trustee and notified to Noteholders.

   5.4       Determination of Rates of Interest and Interest Amounts 

The Agent Bank shall, as soon as practicable on each Interest Determination Date determine the rate of SONIA applicable to, and calculate the amount of interest payable on (the "Interest Amounts"), each Class of the Notes for the relevant Interest Period.

The Interest Amounts shall be determined by applying the relevant Rate of Interest to such Principal Amount Outstanding, multiplying the sum by the actual number of days in the Interest Period concerned divided by 365 and rounding the figure downwards to the nearest penny.

2. A new paragraph (f) (as set out below) shall be added to Condition 12.15 (Additional Right of Modification), to permit future modifications to the new SONIA reference rate.

(f) for the purpose of changing the screen rate or base rate that then applies in respect of the Notes to an alternative reference rate (including where such base rate may remain linked to SONIA but may be calculated in a different manner) (any such rate, an "Alternative Reference Rate") and make such other amendments as are necessary or advisable in the reasonable judgment of the Issuer to facilitate such change (a "Reference Rate Modification"), provided that the Issuer, or the Cash Manager on its behalf, certifies to the Note Trustee and the Security Trustee in writing (such certificate, a "Reference Rate Modification Certificate") that:

   (A)       such Reference Rate Modification is being undertaken due to: 

(1) a material disruption to SONIA, an adverse change in the methodology of calculating SONIA or SONIA ceasing to exist or be published;

(2) the insolvency or cessation of business of the SONIA administrator (in circumstances where no successor SONIA administrator has been appointed);

(3) a public statement by the SONIA administrator that it will cease publishing SONIA permanently or indefinitely (in circumstances where no successor SONIA administrator has been appointed that will continue publication of SONIA);

(4) a public statement by the supervisor of the SONIA administrator that SONIA has been or will be permanently or indefinitely discontinued or will be changed in an adverse manner;

(5) a public statement by the supervisor of the SONIA administrator that means SONIA may no longer be used or that its use is subject to restrictions or adverse consequences; or

(6) the reasonable expectation of the Issuer that any of the events specified in subparagraphs (1) to (5) above will occur or exist within six months of the proposed effective date of such Reference Rate Modification; and

   (B)       such Alternative Reference Rate is: 

(1) a base rate published, recognised, endorsed or approved the Bank of England, the Financial Conduct Authority or the Prudential Regulation Authority or any stock exchange on which the Notes are listed (or any relevant committee or other body established, sponsored or approved by any of the foregoing);

(2) a base rate utilised in a material number of public listed new issues of Sterling denominated asset-backed floating rate notes prior to the effective date of such Reference Rate Modification; or

(3) such other base rate as the Issuer reasonably determines (to preserve, so far as reasonably and commercially practicable, what would have been the expected Rate of Interest applicable to the Class A Notes) or which is proposed by any holder of the Most Senior Class of Notes then outstanding,

(the certificate to be provided by the Issuer (or the Cash Manager on its behalf) or the relevant Transaction Party, as the case may be, pursuant to paragraphs (a) to (e) above being a "Modification Certificate"), (upon which (or, as applicable, the relevant Reference Rate Modification Certificate) the Note Trustee and the Security Trustee may rely absolutely and without further enquiry or liability to any person for so doing), provided that:

(A) at least 30 calendar days' prior written notice of any such proposed modification has been given to the Note Trustee and the Security Trustee;

(B) the Modification Certificate or, as applicable, Reference Rate Modification Certificate in relation to such modification shall be provided to the Note Trustee and the Security Trustee both at the time the Note Trustee and the Security Trustee is notified of the proposed modification and in final form not less than two Business Days prior to the date that such modification takes effect;

(C) the prior written consent of each Secured Creditor (other than any Noteholder and Certificateholder) which is party to the Relevant Document has been obtained;

(D) in relation to a Reference Rate Modification, a copy of the written notice provided to the Noteholders and the Certificateholders shall be appended to the Reference Rate Modification Certificate;

   (E)       either: 

(1) the Issuer (or the Cash Manager on its behalf) obtains from each of the Rating Agencies written confirmation (or certifies in the Modification Certificate or, as applicable, Reference Rate Modification Certificate that it has been unable to obtain written confirmation, but has received oral confirmation from an appropriately authorised person at each of the Rating Agencies) that such modification would not result in (x) a downgrade, withdrawal or suspension of the then current ratings assigned to any Class of the Notes by such Rating Agency or (y) such Rating Agency placing any Notes on rating watch negative (or equivalent); or

(2) the Issuer (or the Cash Manager on its behalf) certifies in the Modification Certificate or, as applicable, Reference Rate Modification Certificate that it has informed the Rating Agencies of the proposed modification and none of the Rating Agencies has indicated that such modification would result in (x) a downgrade, withdrawal or suspension of the then current ratings assigned to any Class of the Notes by such Rating Agency or (y) such Rating Agency placing any Notes on rating watch negative (or equivalent); and

(F) the Issuer has provided at least 30 calendar days' notice to the Noteholders of each Class and the Certificateholders of each Class of the proposed modification in accordance with Condition 15 (Notice to Noteholders) and Residual Certificates Condition 14 (Notice to Certificateholders) and by publication on Bloomberg on the "Company News" screen relating to the Notes, in each case specifying the date and time by which Noteholders and/or Certificateholders may object to the proposed modification, and has made available at such time the modification documents for inspection at the registered office of the Issuer for the time being during normal business hours or through a relevant e-data site selected by the Issuer; and

(G) Noteholders representing at least 10 per cent. of the aggregate Principal Amount Outstanding of the Most Senior Class of Notes then outstanding, or Certificateholders representing at least 10 per cent. in number of the Principal Residual Certificates then outstanding have not contacted the Principal Paying Agent or the Issuer in writing (or otherwise in accordance with the then current practice of any applicable clearing system through which such Notes or (as applicable) the Principal Residual Certificates may be held) within such notification period notifying the Principal Paying Agent or the Issuer that such Noteholders or Certificateholders object to the modification.

If Noteholders representing at least 10 per cent. of the aggregate Principal Amount Outstanding of the Most Senior Class of Notes then outstanding, or Certificateholders representing at least 10 per cent. of the number of the Principal Residual Certificates then outstanding have notified the Principal Paying Agent or the Issuer in writing (or otherwise in accordance with the then current practice of any applicable clearing system through which such Notes or Principal Residual Certificates may be held) within the notification period referred to above that they object to the modification, then such modification will not be made unless an Extraordinary Resolution of (i) the Most Senior Class then outstanding (in the event that the objection is made by such Noteholders) and (ii) the Principal Residual Certificates then in issue (in the event that the objection is made by such Certificateholders) is passed in favour of such modification in accordance with Condition 12 (Meetings of Noteholders, Modifications, Waiver and Substitution).

Objections made in writing other than through the applicable clearing system must be accompanied by evidence to the Note Trustee's satisfaction (having regard to prevailing market practices) of the relevant Noteholder's holding of the Notes or the Certificateholder's holding of the Residual Certificates.

Where such Noteholders or Certificateholders have not so notified the Principal Paying Agent or Issuer of such objection, or an Extraordinary Resolution of the Most Senior Class then outstanding is passed in favour of such modification in accordance with Condition 12 (Meetings of Noteholders, Modifications, Waiver and Substitution), then the Note Trustee shall be obliged to agree to the modification and to direct the Security Trustee accordingly.

Other than where specifically provided in this Condition 12.15 (Additional Right of Modification) or any Transaction Document:

   (a)        when implementing any modification pursuant to this Condition 12.15 (Additional Right of Modification) (save to the extent the Note Trustee considers that the proposed modification would constitute a Basic Terms Modification), the Note Trustee and the Security Trustee shall not consider the interests of the Noteholders, Certificateholders, any other Secured Creditor or any other person and shall act and rely solely and without further investigation on any certificate or evidence provided to it by the Issuer or the relevant Transaction Party, as the case may be, pursuant to this Condition 12.15 (Additional Right of Modification) and shall not be liable to the Noteholders, Certificateholders, any other Secured Creditor or any other person for so acting or relying, irrespective of whether any such modification is or may be materially prejudicial to the interests of any such person; and 

(b) the Note Trustee and the Security Trustee shall not be obliged to agree to any modification which, in the sole opinion of the Note Trustee (or as the case may be, the Security Trustee) would have the effect of (i) exposing the Note Trustee (or as the case may be, the Security Trustee) to any liability against which it has not been indemnified and/or secured and/or pre-funded to its satisfaction or (ii) increasing the obligations, liabilities or duties, or decreasing the protections, rights, powers, authorisations or indemnification of the Note Trustee (or as the case may be, the Security Trustee) in the Relevant Documents and/or these Conditions.

Any such modification shall be binding on all Noteholders and Certificateholders and shall be notified by the Issuer as soon as reasonably practicable to:

(a) so long as any of the Notes rated by the Rating Agencies remains outstanding, each Rating Agency;

   (b)        the Secured Creditors; 
   (c)        the Noteholders in accordance with Condition 15 (Notice to Noteholders); and 
   (d)        the Certificateholders in accordance with Residual Certificates Condition 14 (Notice to Certificateholders). 

3. By way of conforming amendment, substantially the same additional clause as set out in paragraph 2 above shall be added to:

-- Residual Certificate Condition 11.14 (Additional Right of Modification) as a new paragraph (f);

   --    Clause 26 (Additional Right of Modification) of the Trust Deed as a new paragraph (f); and 
   --    Clause 23.10 (Additional Right of Modification) of the Deed of Charge as a new paragraph (f). 

4. Conforming changes in consequence of the amendments described in paragraphs 2 and 3 above shall be made to:

-- Clause 17(i) and (m) of the Trust Deed - by deleting references to the capitalised term "Reference Bank".

   --      Condition 5.6 - by deleting references to the capitalised term "Reference Bank". 

-- Condition 12.3(b) (Quorum) - by providing that any future modification made pursuant to the new provisions described in paragraphs 2 and 3 above shall not constitute a Basic Term Modification.

-- Residual Certificate Condition 11.3(b) (Quorum) - by providing that any future modification made pursuant to the new provisions described in paragraphs 2 and 3 above shall not constitute Basic Term Modifications.

-- Paragraph 8 of Schedule 7 (Provisions for Meetings of Noteholders and Certificateholders) of the Trust Deed - by providing that any future modification made pursuant to the new provisions described in paragraphs 2 and 3 above shall not constitute Basic Term Modifications.

Changes to the provisions relating to Subordination by Deferral

5. Condition 17 (Subordination by Deferral) shall be deleted and replaced with the following (so that interest payable on the Class A Notes may no longer be deferred, as set out below) (with consequential conforming amendments to Condition 3.1(a) and the definition of Event of Default in Condition 10.1(a)):

   17.       SUBORDINATION BY DEFERRAL 
   17.1     Interest 

If, on any Interest Payment Date, the Issuer has insufficient funds to make payment in full of all amounts of interest (which shall, for the purposes of this Condition 17, include any interest previously deferred under this Condition 17.1 and accrued interest thereon) payable after having paid or provided for items of higher priority in the Revenue Priority of Payments, then the Issuer shall be entitled, in respect of any Class of Notes other than the Class A Notes, to defer to the next Interest Payment Date the payment of interest (such interest, the "Deferred Interest") in respect of the relevant Class of Notes (other than the Class A Notes) to the extent only of any insufficiency of funds (only after having paid or provided for all amounts specified as having a higher priority in the Revenue Priority of Payments).

   17.2     General 

Any amounts of Deferred Interest in respect of any Class of Notes (other than the Class A Notes) shall accrue interest ("Additional Interest") at the same rate and on the same basis as scheduled interest in respect of the corresponding Class of Notes, but shall not be capitalised. Such Deferred Interest and Additional Interest shall, in any event, become payable on the next Interest Payment Date (unless and to the extent that Condition 17.1 (Interest) applies) or on such earlier date as the relevant Class of Notes become due and repayable in full in accordance with these Conditions.

   17.3     Notification 

As soon as practicable after becoming aware that any part of a payment of interest on any Class of Notes (other than the Class A Notes) will be deferred or that a payment previously deferred will be made in accordance with this Condition 17, the Issuer will give notice thereof to the relevant Noteholders in accordance with Condition 15 (Notice to Noteholders). Any deferral of interest in accordance with this Condition 17 will not constitute an Event of Default. For the avoidance of doubt, interest payable in respect of the Class A Notes may not be deferred pursuant to this Condition 17. The provisions of this Condition 17 shall cease to apply on the Final Maturity Date, or any earlier date on which the Notes are redeemed in full or required to be redeemed in full at which time all Deferred Interest and Additional Interest thereon shall become due and payable.

Provisions relating to the introduction of new Liquidity Reserve Fund

6. In order to enable the Issuer to establish a Liquidity Reserve Fund, Schedule 2 (Cash Management and Maintenance of Ledgers) of both the Cash Management Agreement and the Replacement Cash Management Agreement shall be deleted and replaced with the following:

SCHEDULE 2

CASH MANAGEMENT AND MANAGEMENT OF LEDGERS

   1.         Determination 

1.1 As of each Calculation Date, the Cash Manager shall determine each of the following in accordance with this paragraph 1:

(a) the amount of any Available Principal Receipts and Available Revenue Receipts for the relevant Interest Payment Date;

   (b)        the Principal Amount Outstanding of the Notes in accordance with the Conditions; 
   (c)        the Liquidity Reserve Fund Balance available for the relevant Interest Payment Date; 
   (d)        the Retained Principal Required Amount; and 

(e) such other amounts as are required to be determined by the Issuer or Cash Manager in accordance with the Conditions and the Residual Certificates Conditions.

1.2

(a) The Cash Manager may make all the determinations and confirmations referred to in paragraph 1.1 on the basis of any reasonable and proper assumptions as the Cash Manager considers appropriate (including, without limitation, as to the amount of any payments to be made under paragraph 7 below).

(b) The Cash Manager shall on request notify the Issuer and the Security Trustee in writing of any such other assumptions and shall take account of any representations made by the Issuer in relation thereto.

1.3 Each determination made in accordance with this paragraph 1 shall (in the absence of manifest error) be final and binding on all persons.

   2.         Notification of Determinations 

2.1 The Cash Manager will cause each determination of Available Revenue Receipts and Available Principal Receipts to be notified three (3) Business Days prior to each Interest Payment Date to the Issuer.

2.2 The Cash Manager shall procure that the determinations and notifications required to be made pursuant to Condition 5 of the Notes are made.

   3.         Liquidity Reserve Fund and Liquidity Reserve Fund Ledger 

3.1 On the Signing Date, the Issuer or the Cash Manager on its behalf will establish the Liquidity Reserve Fund.

3.2 The Liquidity Reserve Fund Balance will be deposited in the Relevant Deposit Account (with a corresponding credit being made to the Liquidity Reserve Fund Ledger). The Liquidity Reserve Fund will be funded and replenished up to the Liquidity Reserve Target on each Interest Payment Date falling on or after the Signing Date in accordance with item (f) of the Pre-Acceleration Principal Priority of Payments.

3.3 On each Interest Payment Date (until and including the Class A Redemption Date), all amounts standing to the credit of the Liquidity Reserve Fund Ledger shall form part of the Available Principal Receipts to be distributed on such Interest Payment Date.

3.4 For the purposes of calculating the Liquidity Reserve Target, the aggregate Principal Amount Outstanding of any relevant Class of Notes on each Interest Payment Date will be determined prior to, and without taking into account, any redemptions of the relevant Notes applied on such Interest Payment Date.

3.5 Following service of a Note Acceleration Notice, all amounts standing to the credit of the Liquidity Reserve Fund Ledger will be applied in accordance with the Post-Acceleration Priority of Payments.

   4.         Principal Ledger 

4.1 The Cash Manager will record as a credit in the Principal Ledger all Principal Receipts in accordance with the servicing procedures and the Mortgage Conditions.

4.2 The Cash Manager will record as a debit in the Principal Ledger all application of Available Principal Receipts in accordance with the Pre-Acceleration Principal Priority of Payments or Post-Acceleration Priority of Payments (as applicable).

   5.         Revenue Ledger 

5.1 The Cash Manager will record as a credit in the Revenue Ledger all Available Revenue Receipts in accordance with the servicing procedures and the Mortgage Conditions.

5.2 The Cash Manager will record as a debit in the Revenue Ledger all application of Available Revenue Receipts in accordance with the Revenue Priority of Payments or Post-Acceleration Priority of Payments (as applicable).

   6.         Retained Principal Receipts Ledger 

6.1 On the Closing Date, the Cash Manager will establish the Retained Principal Receipts Ledger and, on behalf of the Issuer, will fund such Ledger up to the Retained Principal Required Amount from the proceeds of the issuance of the Notes. Retained Principal Receipts will be credited to the relevant Deposit Account (with a corresponding credit recorded to the Retained Principal Receipts Ledger).

6.2 On any day amounts standing to the credit of the Retained Principal Receipts Ledger may be withdrawn and used to pay or provide for Capital Costs.

6.3 On each Interest Payment Date the Cash Manager shall credit the Retained Principal Receipts Ledger in accordance with the Pre-Acceleration Principal Priority of Payments with the Retained Principal Required Amount.

6.4 The Retained Principal Required Amount shall be (i) prior to the final Calculation Date or the occurrence of an Event of Default, GBP50,000; (ii) thereafter, zero.

6.5 Prior to the service of a Note Acceleration Notice, upon request by the Servicer, the Cash Manager, on behalf of the Issuer, will apply amounts standing to the credit of the Retained Principal Receipts Ledger to pay or provide for all Capital Costs.

6.6 Any amounts standing to the credit of the Retained Principal Receipts Ledger on any Interest Payment Date and which have not been applied by the Cash Manager towards Capital Costs will be applied by the Cash Manager, on the Issuer's behalf, on such Interest Payment Date as Available Principal Receipts in accordance with the Pre-Acceleration Principal Priority of Payments.

6.7 Following service of a Note Acceleration Notice on the Issuer, the Cash Manager will on behalf of the Security Trustee apply monies standing to the credit of the Retained Principal Receipts Ledger in accordance with the Post-Acceleration Priority of Payments.

   7.         Principal Deficiency Ledger 

7.1 On the Closing Date, the Cash Manager will establish a Principal Deficiency Ledger with the following sub-ledgers:

(a) the Class A Principal Deficiency Sub-Ledger (the "Class A Principal Deficiency Sub-Ledger");

(b) the Class B Principal Deficiency Sub-Ledger (the "Class B Principal Deficiency Sub-Ledger");

(c) the Class C Principal Deficiency Sub-Ledger (the "Class C Principal Deficiency Sub-Ledger");

(d) the Class D Principal Deficiency Sub-Ledger (the "Class D Principal Deficiency Sub-Ledger");

(e) the Class E Principal Deficiency Sub-Ledger (the "Class E Principal Deficiency Sub-Ledger"); and

(f) the Principal Residual Certificate Principal Deficiency Sub-Ledger (the "Principal Residual Certificate Principal Deficiency Sub-Ledger").

7.2 The Cash Manager will use the Principal Deficiency Ledger to record (i) Losses of principal and Un-Capitalised Receipts on the Portfolio and/or (ii) any Available Principal Receipts applied pursuant to items (a) to (e) (inclusive) and (g) to (j) (inclusive) of the Pre-Acceleration Principal Priority of Payments (together, the "Principal Deficiencies").

   7.3        Any Principal Deficiency shall be debited: 

(a) first, to the Principal Residual Certificate Principal Deficiency Sub-Ledger up to a maximum of the PRC Overcollateralisation Amount less the aggregate amount of all Residual Payments that have been made in respect of Principal Residual Certificates since the Closing Date;

(b) second, to the Class E Principal Deficiency Sub-Ledger up to a maximum of the Principal Amount Outstanding of the Class E Notes;

(c) third, to the Class D Principal Deficiency Sub-Ledger up to a maximum of the Principal Amount Outstanding of the Class D Notes;

(d) fourth, to the Class C Principal Deficiency Sub-Ledger up to a maximum of the Principal Amount Outstanding of the Class C Notes;

(e) fifth, to the Class B Principal Deficiency Sub-Ledger up to a maximum of the Principal Amount Outstanding of the Class B Notes; and

(f) sixth, to the Class A Principal Deficiency Sub-Ledger up to a maximum of the Principal Amount Outstanding of the Class A Notes.

7.4 If the Cash Manager makes any payments or provisions pursuant to Clause 4.4(b) of the Cash Management Agreement, the Cash Manager will debit the corresponding amount from the relevant Principal Deficiency Ledger as indicated in that paragraph.

7.5 The Cash Manager shall reduce amounts allocated to each Principal Deficiency Sub-Ledger (other than the Principal Residual Certificate Principal Deficiency Sub-Ledger) to the extent of Available Revenue Receipts available therefor on any Interest Payment Date in accordance with the Revenue Priority of Payments. The Cash Manager will apply such amounts in repayment of principal as Available Principal Receipts in accordance with the Pre-Acceleration Principal Priority of Payments.

   8.         Issuer Profit Amount Ledger 

8.1 On the Closing Date, the Cash Manager will establish the Issuer Profit Amount Ledger which shall record as a credit amounts retained by the Issuer as profit in accordance with the Priorities of Payments and shall record as a debit amounts withdrawn to make payments of corporation tax due by the Issuer or any dividends paid to Holdings.

   9.         Make-Whole Ledger 
   9.1        On the Closing Date, the Cash Manager will establish the Make-Whole Ledger. 

9.2 On the Closing Date, the Make-Whole Ledger will be credited with GBP1,459,000 (such amount being equal to the Projected Costs as at the Closing Date) from the proceeds of the sale of the Notes.

9.3 The Make-Whole Ledger will be credited with any Rebate of Initial Consideration (as determined by the Servicer) received from the Seller in accordance with clause 2.5 of the Mortgage Sale Agreement.

   9.4        The Make-Whole Ledger will be debited: 

(a) on each Calculation Date by an amount equal to the aggregate of the Make-Whole Amounts for the immediately preceding Collection Period. Such debited amounts shall become Available Principal Receipts. Any such entry and debit shall be made and taken into account prior to the application of Available Principal Receipts on the relevant Interest Payment Date;

(b) on any date (whether or not an Interest Payment Date), upon notice from the Seller to the Cash Manager, by an amount equal to the lesser of the Excess Amount (if any) and the balance standing to the credit of the Make-Whole Ledger, such amounts to be paid as further consideration for the Loans to the Seller; and

(c) on the Make-Whole Ledger Discharge Date, by the balance standing to the credit of the Make-Whole Ledger, such amounts to be paid as further consideration for the Loans to the Seller.

   10.        Priorities of Payment 

10.1 Prior to the service of a Note Acceleration Notice by the Note Trustee on the Issuer, on each Interest Payment Date the Cash Manager shall apply or provide for the application of the Available Revenue Receipts in the following order of priority (in each case only if and to the extent that payments or provisions of a higher priority have been made in full) (the " Revenue Priority of Payments " ):

(a) first, in or towards satisfaction pro rata and pari passu according to the respective amounts thereof of:

(i) any fees, costs, charges, liabilities, expenses and all other amounts (including by way of indemnity) then due or to become due and payable in the immediately succeeding Interest Period to the Note Trustee and any Appointee under the provisions of the Trust Deed and the other Transaction Documents together with (if payable) VAT thereon as provided therein; and

(ii) any fees, costs, charges, liabilities, expenses and all other amounts (including by way of indemnity) then due or to become due and payable in the immediately succeeding Interest Period to the Security Trustee and any Appointee under the provisions of the Deed of Charge and the other Transaction Documents together with (if payable) VAT thereon as provided therein;

(b) second, in or towards satisfaction pro rata and pari passu according to the respective amounts thereof of:

(i) any amounts then due and payable to the Servicer and any fees, costs, charges, liabilities and expenses then due or to become due and payable to the Servicer in the immediately succeeding Interest Period under the provisions of the Servicing Agreement, together with VAT (if payable) thereon as provided therein;

(ii) any amounts then due and payable to the Back-Up Servicer and any fees, costs, charges, liabilities and expenses then due or to become due and payable to the Back-Up Servicer in the immediately succeeding Interest Period under the provisions of the Back-Up Servicing Agreement (including any invocation fee due to the Back-Up Servicer), together with VAT (if payable) thereon as provided therein;

(iii) any remuneration then due and payable to the Agent Bank, the Registrar and the Paying Agents and any fees, costs, charges, liabilities and expenses and any other amounts (including by way of indemnity) then due or to become due and payable in the immediately succeeding Interest Period to them under the provisions of the Agency Agreement, together with (if payable) VAT thereon as provided therein;

(iv) any amounts then due and payable to the Corporate Services Provider and any fees, costs, charges, liabilities and expenses then due or to become due and payable to the Corporate Services Provider in the immediately succeeding Interest Period under the provisions of the Corporate Services Agreement, together with (if payable) VAT thereon as provided therein; and

(v) any amounts then due and payable to the Cash Manager and Back-Up Cash Manager and any fees, costs, charges, liabilities and expenses and any other amounts (including by way of indemnity) then due or to become due and payable to the Cash Manager and Back-Up Cash Manager in the immediately succeeding Interest Period under the provisions of (respectively) the Cash Management Agreement or the Back up Cash Management Agreement and the Replacement Cash Management Agreement, together with VAT (if payable) thereon as provided therein;

(vi) any amounts then due and payable to the Account Banks or Collection Account Bank and any fees, costs, charges, liabilities and expenses and any other amounts (including by way of indemnity) then due or to become due and payable to the such party in the immediately succeeding Interest Period under the provisions of the relevant Bank Account Agreement, together with VAT (if payable) thereon as provided therein;

(vii) any amounts then due and payable to the Back-Up Servicer Facilitator and any fees, costs, charges, liabilities and expenses then due or to become due and payable to the Back-Up Servicer Facilitator in the immediately succeeding Interest Period under the provisions of the Servicing Agreement, together with VAT (if payable) thereon as provided therein; and

(viii) any fees and Liabilities due and payable by the Issuer to the Liquidation Agent in accordance with the terms of the Liquidation Agent Agreement;

   (c)        third, to pay the Issuer an amount equal to the Issuer Profit Amount; 

(d) fourth, in or towards satisfaction pro rata and pari passu according to the respective amounts thereof of:

(i) any amounts due and payable by the Issuer to third parties and incurred without breach by the Issuer of the Transaction Documents to which it is a party (and for which payment has not been provided for elsewhere, including, without limitation, all fees, costs and expenses incurred in connection with the amendment and variation of the Transaction Documents effected on or about the Amendment Effective Date, including (without limitation) rating agency fees, legal fees of the relevant Transaction Parties and consent fees payable to the Co-operative Bank (as separately agreed between, among others, the Issuer and the Legal Title Holders)) and any amounts necessary to provide for any such amounts expected to become due and payable by the Issuer in the immediately succeeding Interest Period and any amounts required to pay or discharge any liability of the Issuer for corporation tax on any income or chargeable gain of the Issuer (but only to the extent not capable of being satisfied out of amounts retained by the Issuer under item (c) above); and

(ii) any Transfer Costs which the Servicer has failed to pay pursuant to Clause 21.4 of the Servicing Agreement;

(e) fifth, to provide for amounts due on the relevant Interest Payment Date, to pay, pro rata and pari passu interest due and payable on the Class A Notes;

(f) sixth, (so long as the Class A Notes will remain outstanding following such Interest Payment Date), to credit the Class A Principal Deficiency Sub-Ledger in an amount sufficient to eliminate any debit thereon (such amounts to be applied in repayment of principal as Available Principal Receipts);

(g) seventh, to provide for amounts due on the relevant Interest Payment Date, to pay, pro rata and pari passu interest due and payable on the Class B Notes;

(h) eighth, (so long as the Class B Notes will remain outstanding following such Interest Payment Date), to credit the Class B Principal Deficiency Sub-Ledger in an amount sufficient to eliminate any debit thereon (such amounts to be applied in repayment of principal as Available Principal Receipts);

(i) ninth, to provide for amounts due on the relevant Interest Payment Date, to pay, pro rata and pari passu interest due and payable on the Class C Notes;

(j) tenth, so long as the Class C Notes will remain outstanding following such Interest Payment Date), to credit the Class C Principal Deficiency Sub-Ledger in an amount sufficient to eliminate any debit thereon (such amounts to be applied in repayment of principal as Available Principal Receipts);

(k) eleventh, to provide for amounts due on the relevant Interest Payment Date, to pay, pro rata and pari passu interest due and payable on the Class D Notes;

(l) twelfth, so long as the Class D Notes will remain outstanding following such Interest Payment Date), to credit the Class D Principal Deficiency Sub-Ledger in an amount sufficient to eliminate any debit thereon (such amounts to be applied in repayment of principal as Available Principal Receipts);

(m) thirteenth, to provide for amounts due on the relevant Interest Payment Date, to pay, pro rata and pari passu interest due and payable on the Class E Notes;

(n) fourteenth, so long as the Class E Notes will remain outstanding following such Interest Payment Date), to credit the Class E Principal Deficiency Sub-Ledger in an amount sufficient to eliminate any debit thereon (such amounts to be applied in repayment of principal as Available Principal Receipts);

(o) fifteenth, provided that the Interest Payment Date on which these payments are being made does not fall within a Determination Period, any remaining amounts shall be paid as Revenue Residual Payments (being Deferred Consideration for the purchase of the Portfolio) pro rata and pari passu to the holders of the Revenue Residual Certificates.

10.2 Prior to the service of a Note Acceleration Notice by the Note Trustee on the Issuer, on each Interest Payment Date the Cash Manager (on behalf of the Issuer) shall, after application of the Available Revenue Receipts in accordance with the Revenue Priority of Payments apply Available Principal Receipts on each Interest Payment Date in the following order of priority (the "Pre-Acceleration Principal Priority of Payments " ) (in each case only if and to the extent that such payments have not already been made as a result of the operation of the Revenue Priority of Payments and payments or provisions of higher priority have been paid in full) (the "Pre-Acceleration Principal Priority of Payments " and together with the Revenue Priority of Payments, the "Pre--Acceleration Priorities of Payments" ):

   (a)        first, the amount specified in item (a) of the Revenue Priority of Payments; 
   (b)        second, the amount specified in item (b) of the Revenue Priority of Payments; 
   (c)        third, the amount specified in item (c) of the Revenue Priority of Payments; 
   (d)        fourth, the amount specified in item (d) of the Revenue Priority of Payments; 

(e) fifth, the amount specified in item (e) of the Revenue Priority of Payments only if the Class A Notes are the Most Senior Class;

   (f)         sixth, to credit the Liquidity Reserve Fund Ledger up to the Liquidity Reserve Target; 

(g) seventh, the amount specified in item (g) of the Revenue Priority of Payments only if the Class B Notes are the Most Senior Class;

(h) eighth, the amount specified in item (i) of the Revenue Priority of Payments only if the Class C Notes are the Most Senior Class;

(i) ninth, the amount specified in item (k) of the Revenue Priority of Payments only if the Class D Notes are the Most Senior Class;

(j) tenth, the amount specified in item (m) of the Revenue Priority of Payments only if the Class E Notes are the Most Senior Class;

   (k)        eleventh, to replenish the Retained Principal Receipts Ledger; 

(l) twelfth, to redeem the Class A Notes until the Principal Amount Outstanding on the Class A Notes has been reduced to zero;

(m) thirteenth, to redeem the Class B Notes until the Principal Amount Outstanding on the Class B Notes has been reduced to zero;

(n) fourteenth, to redeem the Class C Notes until the Principal Amount Outstanding on the Class C Notes has been reduced to zero;

(o) fifteenth, to redeem the Class D Notes until the Principal Amount Outstanding on the Class D Notes has been reduced to zero;

(p) sixteenth, to redeem the Class E Notes until the Principal Amount Outstanding on the Class E Notes has been reduced to zero;

(q) seventeenth, to be paid as Principal Residual Payments (being Deferred Consideration for the purchase of the Portfolio) pro rata and pari passu to the holders of the Principal Residual Certificates;

If any amounts are applied from the Principal Ledger to pay or provide for items (a) to (e) (inclusive) and (g) to (j) (inclusive) of the Pre-Acceleration Principal Priority of Payments on any Interest Payment Date, the Issuer (or the Cash Manager on its behalf) will make a corresponding entry in the relevant Principal Deficiency Sub-Ledger.

   11.        Order of Application 

11.1 The Cash Manager on behalf of the Issuer shall pay or provide for amounts due under (i) first, the Revenue Priority of Payments and (ii) second, the Pre-Acceleration Principal Priority of Payments.

11.2 Notwithstanding the security created by or pursuant to the Deed of Charge and the Pre-Acceleration Priority of Payments, payments from the Deposit Accounts may and shall (unless the intended recipient of the relevant payment agrees otherwise) be made on any Business Day during an Interest Period for the following purposes:

(a) to pay when due (debiting the Revenue Ledger and/or the Principal Ledger as appropriate) (but subject to any right to refuse or withhold payment or offset that has arisen by reason of the Borrower's breach of the terms of the Loan concerned) any amount payable by the Issuer to a Borrower under the terms of the Loan to which that Borrower is a party or by operation of law;

(b) if any amount has been received from a Borrower for the express purpose of payment being made by the Issuer to a third party for the provision of a service (including giving insurance cover) to either that Borrower or the Issuer, to pay such amount (debiting the Revenue Ledger) when due to such third party;

(c) to pay to the person entitled thereto any amounts (debiting the Revenue Ledger or the Principal Ledger, as appropriate) held by the Issuer on trust or to be accounted for by the Issuer pursuant to clause 4.2 (Issuer Trust) of each of the Mortgage Sale Agreements;

(d) to pay (debiting the Revenue Ledger to the extent not previously debited thereto in respect of the payment of or provision for such amounts under the Revenue Priority of Payments) any amounts due and payable by the Issuer in the course of its business to third parties (including, for the avoidance of doubt, sums due and payable to any Account Bank) other than the Seller, the Servicer, the Back-Up Servicer, Replacement Servicer Facilitator and other such parties payments to whom are provided for in the Revenue Priority of Payments;

(e) to pay from cash standing to the credit of the Deposit Account (debiting the Retained Principal Receipts Ledger) for Capital Costs but only to the extent permitted by the Servicing Agreement; and

(f) to pay to the Seller, by way of additional consideration for the Mortgage Loans, any Excess Amounts (debiting the Make-Whole Ledger).

11.3 Notwithstanding the security created by or pursuant to the Deed of Charge and the Pre-Acceleration Priority of Payments, payments from the Deposit Accounts may and shall be made on any Business Day on or prior to the first Interest Payment Date to pay any amounts representing Accrued Interest Consideration due to the Seller.

11.4 The appropriate payments for any of the above purposes except the payment referred to in Paragraph 11.2(d) , may, if paid on an Interest Payment Date, be paid in priority to any of the payments referred to in the Revenue Priority of Payments.

   12.        Application of Monies following redemption of the Notes in full 

On any Optional Redemption Date on which the Notes are repaid or provided for in full, the Issuer (or the Cash Manager on its behalf) shall apply all amounts standing to the credit of any Deposit Account of the Issuer to repay any liabilities of the Issuer and to discharge all other amounts required to be paid by the Issuer in accordance with applicable Priority of Payments.

   13.        Estimation 

13.1 In the event that the Servicer has not provided a Servicer Report in respect of a Collection Period (each such period, a Determination Period), the Cash Manager shall be required to estimate the amount of Principal Receipts and Revenue Receipts for such Determination Period based on the Servicer Report in respect of the three most recent Collection Periods in respect of which a Servicer Report was provided by the Servicer (or, where there are not at least three such Servicer Reports, any previous Servicer Reports) in accordance with Schedule 6 (Determinations and Reconciliation), for the purposes of complying with its obligations hereunder. The Cash Manager shall make such estimations on the basis of information available to it at such time and shall not be liable (in the absence of gross negligence, fraud and wilful default) for the accuracy of such estimations.

13.2 Upon receipt by the Cash Manager of the Servicer Report in relation to the Determination Period, the Cash Manager will apply the reconciliation calculations set out in Schedule 6 (Determinations and Reconciliation).

7. Conforming consequential changes relating to the changes made to paragraph 6 above shall be made to:

-- Recital C and Schedule 1 of both the Cash Management Agreement and the Replacement Cash Management Agreement - by the inclusion of references to the Liquidity Reserve Fund Ledger.

-- Clause 4.4 of both the Cash Management Agreement and the Replacement Cash Management Agreement - by the inclusion of a reference to the Liquidity Reserve Fund Ledger and amending the applicable cross-references to the Pre-Acceleration Principal Priority of Payments in the Cash Management Agreement and the Replacement Cash Management Agreement.

-- Adding the following definitions as new definitions in the Master Definitions and Construction Schedule:

" Liquidity Reserve Fund " means the reserve fund established by the Issuer on the Signing Date (and maintained by the Cash Manager pursuant to the Cash Management Agreement on behalf of the Issuer), and which is required to be funded on each Interest Payment Date falling on or after the Signing Date pursuant to the Pre-Acceleration Principal Priority of Payments up to the Liquidity Reserve Target;

" Liquidity Reserve Fund Balance " means the amount from time to time standing to the credit of the Liquidity Reserve Fund;

" Liquidity Reserve Fund Ledger " means the ledger maintained by the Cash Manager pursuant to the Cash Management Agreement on behalf of the Issuer to record amounts credited to, and debited from, and the balance from time to time of, the Liquidity Reserve Fund;

" Liquidity Reserve Target " means:

(a) an amount equal to 1.5 per cent. of the Principal Amount Outstanding of the Class A Notes on the Business Day immediately preceding the first Interest Payment Date following the Signing Date (the "LRF Target Date");

(b) on each Interest Payment Date following the LRF Target Date, an amount equal to 1.5 per cent. of the Principal Amount Outstanding of the Class A Notes on the Business Day immediately preceding such Interest Payment Date; and

   (c)        following the Class A Redemption Date, zero; 

-- Making consequential amendments to the definitions of "Available Principal Receipts", "Ledgers", "Market Sale Minimum Price" and "Portfolio Option Purchase Price" by adding references to the Liquidity Reserve Fund Ledger.

-- Replacing Schedule 2 of the Back-Up Cash Management Agreement with the amended and restated Cash Management Agreement containing the relevant provisions relating to the Liquidity Reserve Fund.

Amendments to the Master Definitions and Construction Schedule

8. The definitions of "Calculation Date", "Class A Margin", "Class B Margin", "Class C Margin", "Class D Margin", "Class E Margin", "Interest Amounts", "Interest Determination Date", "Principal Deficiencies", "Principal Residual Payments", "Relevant Margin", "Relevant Screen" and "Relevant Screen Rate" in the Master Definitions and Construction Schedule shall be deleted and replaced with the following:

"Calculation Date" means the fifth Business Day before the Interest Payment Date for which the relevant Rate of Interest and Interest Amount will apply;

"Class A Margin" means in respect of the Class A Notes, 0.95 per cent. per annum;

"Class B Margin" means in respect of the Class B Notes, 1.65 per cent. per annum;

"Class C Margin" means in respect of the Class C Notes, 2.15 per cent. per annum;

"Class D Margin" means in respect of the Class D Notes, 2.65 per cent. per annum;

"Class E Margin" means in respect of the Class E Notes, 3.15 per cent. per annum;

"Interest Amounts" means the amount payable in respect of interest on the Principal Amount Outstanding of each Class of Notes for the relevant Interest Period, as determined by the Agent Bank as soon as practicable on each Interest Determination Date;

"Interest Determination Date" means the fifth Business Day before the Interest Payment Date for which the relevant Rate of Interest and Interest Amount will apply;

"Principal Deficiencies" means (i) Losses of (x) principal and (y) Un-Capitalised Receipts on the Portfolio and/or (ii) any Available Principal Receipts applied pursuant to items (a) to (e) (inclusive) and (g) to (j) (inclusive) of the Pre-Acceleration Principal Priority of Payments;

"Principal Residual Payment" means a payment by the Issuer to the Principal Residual Certificateholders at the relevant time of Deferred Consideration of:

(a) prior to the delivery of a Note Acceleration Notice, for each Interest Payment Date, the amount by which the Available Principal Receipts exceeds the amounts required to satisfy items (a) to (p) of the Pre-Acceleration Principal Priority of Payments in respect of that Interest Payment Date; and

(b) following the delivery of a Note Acceleration Notice, for each date on which amounts are to be applied in accordance with the Post-Acceleration Priority of Payments, the amount by which amounts available for payment in accordance with the Post-Acceleration Priority of Payments exceeds the amounts required to satisfy items (a) to (l) of the Post-Acceleration Priority of Payments on that date, up to a maximum of an amount equal to the PRC Overcollateralisation Amount less the aggregate amount of all payments in respect of the Principal Residual Certificates which, as at such date, have been made since the Closing Date.

"Relevant Margin" means:

in respect of each Class of the Notes the following percentage per annum:

   I.          in respect of the Class A Notes, 0.95 per cent. per annum (the "Class A Margin"); 
   II.         in respect of the Class B Notes, 1.65 per cent. per annum (the "Class B Margin"); 
   III.        in respect of the Class C Notes, 2.15 per cent. per annum (the "Class C Margin"); 
   IV.        in respect of the Class D Notes, 2.65 per cent. per annum (the "Class D Margin"); and 
   V.         in respect of the Class E Notes, 3.15 per cent. per annum (the "Class E Margin"); 

"Relevant Screen" means the Reuters Screen SONIA Page or such other page as may replace Reuters Screen SONIA on that service for the purpose of displaying such information or if that service ceases to display such information, such page as displays such information on such service as may replace such screen or any other medium for electronic display of data as may be previously approved in writing by the Note Trustee and notified to Noteholders;

"Relevant Screen Rate" means in respect of any Business Day, a reference rate equal to the daily Sterling Overnight Index Average ("SONIA") rate for such Business Day as provided by the administrator of SONIA to authorised distributors and as then published on the Relevant Screen or, if the Relevant Screen is unavailable, as otherwise published by such authorised distributors (on the Business Day immediately following such Business Day). If, in respect of any Business Day in the relevant Observation Period, the Agent Bank determines that the Relevant Screen Rate is not available on the Relevant Screen or has not otherwise been published by the relevant authorised distributors, such Relevant Screen Rate shall be: (i) the Bank of England's Bank Rate (the "Bank Rate") prevailing at close of business on the relevant Business Day; plus (ii) the mean of the spread of the Relevant Screen Rate to the Bank Rate over the previous five days on which a Relevant Screen Rate has been published, excluding the highest spread (or, if there is more than one highest spread, one only of those highest spreads) and lowest spread (or, if there is more than one lowest spread, one only of those lowest spreads) to the Bank Rate;

9. Definitions for "Amendment Effective Date", "Class A Redemption Date", "Compounded Daily SONIA" and "Signing Date" will be added to the Master Definitions and Construction Schedule as follows:

"Amendment Effective Date" means the Interest Payment Date falling in September 2020;

"Class A Redemption Date" means the Interest Payment Date on which, following the application of Available Principal Receipts on such Interest Payment Date, the Class A Notes have been redeemed in full;

" Compounded Daily SONIA " means the rate of return of a daily compound interest investment (with the daily Sterling Overnight Index Average as the reference rate for the calculation of interest) and will be calculated by the Agent Bank as at the relevant Interest Determination Date, as follows, and the resulting percentage will be rounded if necessary to the fifth decimal place, with 0.000005 being rounded upwards:

Where:

" d " is the number of calendar days in the relevant Interest Period;

" do " is the number of Business Days in the relevant Interest Period;

" i " is a series of whole numbers from one to do, each representing the relevant Business Day in chronological order from, and including, the first Business Day in the relevant Interest Period;

" LBD " means a Business Day;

" ni " , for any day " i " , means the number of calendar days from and including such day " i " up to but excluding the following Business Day;

" p " means for any Interest Period, five Business Days; and

" SONIAi-pLBD " means in respect of any Business Day falling in the relevant Interest Period, the Relevant Screen Rate for the Business Day falling " p " Business Days prior to that Business Day " i " ;

"Signing Date" means 8 September 2020;

This notice summarises the material amendments made to the Transaction Documents. The Amendment Documents should be referred to for more detail. Copies of the Amendment Documents will be available for inspection during normal business hours at the specified office for the time being of each of the Paying Agents and at the registered office of the Issuer or through a relevant e-data site selected by the Issuer.

For further information please contact:

Warwick Finance Residential Mortgages Number Three PLC

c/o Intertrust Management Limited

1 Bartholomew Lane

London EC2N 2AX

1 Bartholomew Lane

London EC2N 2AX

Tel: +44 (0) 207 398 6300

Fax: +44 (0) 207 398 6325

Attention: The Directors

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September 09, 2020 04:10 ET (08:10 GMT)