56JX Sthn.pac 4a1ba

 
TIDM56JX TIDM56JV TIDM56JW TIDM56JZ TIDM56KE TIDM56KC TIDM56KA TIDM56JX 
 
* THIS NOTICE IS IMPORTANT AND REQUIRES THE IMMEDIATE ATTENTION OF THE 
    REGISTERED AND BENEFICIAL OWNERS OF THE NOTES. ALL DEPOSITARIES, CUSTODIANS 
    AND OTHER INTERMEDIARIES RECEIVING THIS NOTICE ARE REQUESTED TO PASS THIS 
    NOTICE TO THE BENEFICIAL OWNERS IN A TIMELY MANNER. IF NOTEHOLDERS ARE IN 
    ANY DOUBT AS TO THE ACTION THEY SHOULD TAKE, THEY SHOULD CONSULT THEIR OWN 
    INDEPENDENT PROFESSIONAL ADVISERS AUTHORISED UNDER THE FINANCIAL SERVICES 
    AND MARKETS ACT 2000 (IF THEY ARE IN THE UNITED KINGDOM) OR ANOTHER 
    APPROPRIATELY AUTHORISED INDEPENDENT FINANCIAL ADVISER AND TAKE SUCH OTHER 
    ADVICE FROM THEIR OWN PROFESSIONAL ADVISERS AS THEY DEEM NECESSARY, 
    IMMEDIATELY. 
 
                    IMPORTANT NOTICE TO THE HOLDERS OF THE 
 
       GBP31,500,000 Class M Mortgage Backed Floating Rate Notes due 2042 
 
                      (ISIN: XS0186714506, US84359TAB35) 
 
                             (the "Class M Notes") 
 
        GBP6,000,000 Class B Mortgage Backed Floating Rate Notes due 2042 
 
                             (ISIN: XS0186715222) 
 
                                   issued by 
 
                     Southern Pacific Securities 04-1 PLC 
 
                                (the "Issuer") 
 
                         on or about 26 February 2004 
 
The "Class B Notes", and together with the Class M Notes, the "Notes". 
 
Capitalised terms in this Notice shall, except where the context otherwise 
requires or save where otherwise defined herein, bear the meanings ascribed to 
them in the master definitions schedule dated 26 February 2004 between, amongst 
others, the Issuer and Capita Trust Company Limited (the "Trustee") (as amended 
and restated from time to time) (the "Master Definitions Schedule"). 
 
On 9 June 2015 the short term unsecured debt rating of Barclays Bank PLC (" 
Barclays") was downgraded by S&P from "A-1" to "A-2" (the "S&P Downgrade"). 
Barclays is the GIC Provider, the Account Bank and the Collection Account Bank 
for the Transaction. 
 
As a result of the S&P Downgrade, Barclays no longer has the relevant requisite 
ratings set out in the relevant transaction documents, including the Bank 
Agreement, the Cash/Bond Administration Agreement or the GIC (the "Relevant 
Documents").  The Issuer, the Cash/Bond Administrator and/or Barclays, as 
applicable, are required to take certain remedial action following the S&P 
Downgrade, as set out in the Relevant Documents. 
 
In light of the recent downgrading of the ratings of certain of the Notes by S& 
P, the Issuer would like to provide an update on the status of the remedial 
actions which have been, and which are being, taken by the Issuer and/or the 
Cash/Bond Administrator (acting on behalf of the Issuer) in connection with the 
S&P Downgrade.  The Issuer, having been informed of the facts herein by the 
Cash/Bond Administrator (and not having independently verified the information 
contained in this notice), hereby notifies Noteholders of the following: 
 
 1. Background to the remedial action 
     1. Following the S&P Downgrade, the Cash/Bond Administrator, on behalf of 
        the Issuer and in its capacity as the Cash/Bond Administrator, 
        undertook a market review and entered into discussions with five 
        financial institutions that met the Rating Agencies' minimum 
        counterparty criteria to perform the relevant roles to ascertain 
        whether one of them would be suitable to be appointed as replacement 
        Account Bank, GIC Provider or the Collection Account Bank (as 
        applicable). 
 2. Update on the remedial action in relation to the GIC and the Transaction 
    Account 
 
Following the completion by the Cash/Bond Administrator of its market review to 
find a suitable replacement, the Cash/Bond Administrator notified the Issuer 
and the Trustee that it has identified a global banking institution as a 
potential suitable replacement to replace Barclays as the GIC Provider and the 
Account Bank for the GIC Account and the Transaction Account (the "Transaction 
Account Bank"). The specific terms for the appointment are currently still 
being discussed between the Cash/Bond Administrator, the Issuer and the 
prospective replacement bank; however in the expectation that commercial 
agreement will be reached, it is intended that the appointment will be 
finalised as soon as practicable. The Cash/Bond Administrator and the Issuer 
are seeking to keep the commercial and legal terms as consistent as possible to 
those terms currently in place with Barclays, but it should be noted that there 
may be differences required to reflect commercial and legal changes that have 
taken place in the market since the original bank agreement was entered into 
with Barclays, in particular it being noted that some differences are required 
to be implemented (resulting in potentially lower interest rates to take into 
account increased regulatory costs) as a result of the implementation of such 
changes, the finalisation of these necessary changes has unfortunately led to a 
delay to execution of the relevant legal documentation whilst the impact of 
such changes are being confirmed and finalised. 
 
 1. Update on the remedial action in relation to the Collection Accounts 
     1. Despite having conducted its market review and having had discussions 
        with financial institutions, the Cash/Bond Administrator has not been 
        able to find a suitably rated financial institution who is willing to 
        be the replacement account bank for the Collection Accounts (the " 
        Collection Account Bank").  In relation to the suitably rated financial 
        institutions that were able to offer collection account services, most 
        were deterred by the significant efforts involved in setting up 
        collection account banking operations, together with the economics of 
        operating such accounts. The financial institutions were also concerned 
        with the potential risks, such as direct debit indemnity liability, 
        involved in operating collection accounts in transactions of this type 
        and at this stage of maturity. 
     2. As a result, the Cash/Bond Administrator has advised the Issuer that 
        there is currently no viable alternative but to retain Barclays in the 
        role of Collection Account Bank and to lower the rating requirements of 
        the Collection Account Bank in the Relevant Documents to match 
        Barclays' current rating. The Cash/Bond Administrator understands that 
        this approach may be possible on the basis that Barclays currently 
        meets each Rating Agency's published minimum counterparty rating 
        criteria for the Collection Account Bank role and is therefore able to 
        continue to support a transaction with a "AAA" rated note. 
     3. Barclays have communicated to the Cash/Bond Administrator that they are 
        prepared to remain in their Collection Account Bank role provided that 
        they are able to amend their fee structure.  They have asked that the 
        current tariffs, which are based largely on numbers of items processed, 
        are replaced with a fixed fee structure (including an annual charge), 
        and if such changes are agreed and implemented, this will result in 
        higher Collection Account Bank charges. 
     4. Barclays considers that these increased fees are necessary to offset 
        the risks of operating the Collection Accounts, against the economics 
        of performing the Transaction Account Bank and GIC Provider roles. The 
        Trustee is not required to consent to the increase in fees charged by 
        Barclays as the Transaction Documents already allow for the increase to 
        be implemented. 
     5. Barclays have communicated to the Cash/Bond Administrator that they 
        will require that it remains as a Secured Creditor under the Deed of 
        Charge in its capacity as the Collection Account Bank and therefore 
        rank in the relevant Priority of Payments at the same level as it does 
        as the existing Account Bank.  The New Transaction Account Bank (when 
        selected) will accede to the Deed of Charge to become a Secured 
        Creditor and to also rank at the same level as Barclays currently does 
        in its capacity as Account Bank. 
 2. Except to the extent the Trustee's consent is required under the 
    Transaction Documents to implement the replacement of Barclays as Account 
    Bank and GIC Provider and to retain Barclays as Collection Account as a 
    result of the S&P Downgrade, in accordance with normal practice, the 
    Trustee expresses no opinion as to the merits of the steps taken by the 
    Cash/Bond Administrator or the Issuer (as applicable) as described in this 
    Notice. It has, however, authorised it to be stated that, on the basis of 
    the information set out in this Notice, it has no objection to the Notice 
    being sent to the Noteholders. The Trustee has, however, not been involved 
    in preparing this Notice and makes no representation that all relevant 
    information has been disclosed to Noteholders in this Notice. 
 
The Issuer will keep the Noteholders updated on developments in respect to the 
proposed remedial actions. 
 
Queries may be addressed to the Issuer as follows: 
 
Southern Pacific Securities 04-1 PLC 
 
4th Floor 
 
40 Dukes Place 
 
London EC3A 7NH 
 
Attention:        The Directors 
 
Telephone:       +44 203 367 8200 
 
Fax:                 +44 203 170 0246 
 
e-mail:             spvservices@capitafiduciary.co.uk 
 
Ref:                 Southern Pacific Securities 04-1 PLC 
 
This notice is given by the Issuer. 
 
Dated 4 February 2016 
 
 
 
END 
 

(END) Dow Jones Newswires

February 04, 2016 12:17 ET (17:17 GMT)

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