TIDM31PE
RNS Number : 5617O
Canary Wharf Finance II PLC
20 September 2011
CANARY WHARF FINANCE II PLC
(the"Issuer")
(incorporated in England and Wales with limited liability
under Registered Number 3929593)
NOTICE
to the holders of the
GBP1,215,000,000 Class Al 6.455 per cent. First Mortgage
Debentures due October 2033
(ISIN: XS0112279616)
GBP400,000,000 Class A3 5.952 per cent. First Mortgage
Debentures due October 2037
(ISIN: XS0130681512)
GBP222,000,000 Class A7 Floating Rate First Mortgage Debentures
due October 2037
(ISIN: XS0295171341)
GBP235,000,000 Class B 6.80 per cent First Mortgage Debentures
due 2033
(ISIN:XS0112281190)
GBP104,000,000 Class B3 Floating Rate First Mortgage Debentures
due 2037
(ISIN: XS0295172075)
GBP275,000,000 Class C2 Floating Rate First Mortgage Debentures
due 2037
(ISIN: XS0295172406)
GBP125,000,000 Class D2 Floating Rate First Mortgage Debentures
due 2037
(ISIN: XS0295172745)
of the Issuer presently outstanding (together the "Notes")
On 14 September 2011, the Issuer was approached by Gibraltar
Holdings Limited ("GHL"), CWCB Properties (DS6) Limited (the "DS6
Borrower") and Banque AIG (the "DS6 GIC Provider"), who requested
certain amendments to the DS6 GIC Agreement and the DS6 Master
Definitions Agreement. The requested changes have been made for the
reasons detailed below and the Trustee approved those amendments as
being not materially prejudicial to the interest of the
Noteholders, pursuant to Condition 11(h) of the Notes and Clauses
20(A) and 20(B) of the Original Trust Deed.
1. Background
The information in this section is set out in the Chapter
entitled "Resources Available to the Borrower and the Issuer" of
the Prospectus dated 19 April 2007, but the below circumstances
have been described for your reference.
On 22 December 2003, the DS6 Borrower entered into the DS6
Facility Agreement with GHL in order to mitigate the risk of a
default or shortfall in rental income in respect of DS6.
On that same date, the DS6 Borrower also entered into the DS6
GIC Agreement pursuant to which the assets of GHL were held with
the DS6 GIC Provider (under the guarantee of American International
Group, Inc.). The DS6 GIC Provider is incorporated in France and
American International Group, Inc. is incorporated in the state of
Delaware, U.S.A.
GHL granted first ranking fixed and floating security pursuant
to the DS6 Debenture over, amongst other things, the assets of GHL,
the DS6 GIC Account, the DS6 GIC Agreement and the DS6 Swap
Agreement in favour of the DS6 Borrower (who in turn sub-charged
such rights to the Issuer pursuant to the First Supplemental
Composite Debenture). GHL also granted second ranking security over
its assets in favour of a trustee acting for and on behalf of the
noteholders of the credit linked notes issued by GHL.
The current assets of GHL comprise monies held in, or credited
from time to time to, the GIC Cash Account. The monies held in, or
credited from time to time to, the GIC Cash Account are at all
times sufficient to enable GHL to meet its obligations under the
DS6 Facility Agreement. Additionally, when American International
Group, Inc.'s ("AIG Inc.") short-term ratings were downgraded in
2008, Banque AIG deposited cash collateral into a separate account
with the Bank of New York to support the obligations of the DS6 GIC
Provider to GHL under the DS6 GIC Agreement and the collateral was
secured in favour of GHL. The cash on deposit in the account with
the Bank of New York is marked-to-market such that it is always
sufficient to meet the obligations of GHL under the DS6 Facility
Agreement.
2. Reasons for the Amendments
The role of DS6 GIC Provider is now being provided by Banque AIG
Paris head office because Banque AIG, London branch, has ceased
banking activity. Also, pursuant to AIG Inc.'s continued strategy
for its financial services division, and consistent with its
regulatory disclosures, Banque AIG Paris head office continues to
de-risk its business. Accordingly, the DS6 GIC Provider and the
French regulators are in negotiations to de-license Banque AIG
Paris as soon as possible.
The Issuer was therefore approached by GHL, the DS6 Borrower and
the DS6 GIC Provider to amend the DS6 GIC Agreement and the DS6
Master Definitions Agreement to reflect that the DS6 GIC Provider
will cease to perform licensed banking activity or related
activities. Banque AIG has confirmed that the de-licensing will not
affect the ablity of Banque AIG to act as the DS6 GIC Provider in
accordance with the DS6 GIC Agreement, as amended.
3. Further Detail about the Amendments
The primary amendment made is to restrict the conversion to
Collateral Securities of monies held in, or credited from time to
time to, the GIC Cash Account. Before the amendments described in
this notice were made, neither there were any Collateral Securities
being held in the GIC Securities Account, nor did GHL and the DS6
GIC Provider expect to make such investments in the future. This
was mainly because the definition of "Collateral Securities" was
very restrictive. At the time the CLN Transaction Documents were
entered into, the intention was for Banque AIG or an affiliate to
issue bespoke debt securities to meet these restrictive
requirements. However, Banque AIG no longer intends to avail of
this provision, so it proposed the amendments described above.
Since the option to invest in Collateral Securities was originally
included at the behest of and for the benefit of Banque AIG, when
Banque AIG proposed the removal of this option, the other parties
to the CLN Transaction Documents agreed to make the amendments and
remove the requirement to maintain the GIC Securities Account.
From the perspective of the Issuer, the Borrower, the DS6
Borrower, the DS6 GIC Provider and GHL, the amendments do not
impact the structure because the same rate of interest (the GIC
Rate, which is LIBOR flat) applies to the Collateral Securities as
well as the monies held in, or credited to, the GIC Cash Account.
The option to invest in Collateral Securities is of no consequence
to the DS6 Facility or to the amount available to be drawn down
under that facility because the DS6 Facility is supported by the
monies held in, or credited to, the GIC Cash Account. GHL's
obligations under the DS6 Facility Agreement are met through the
principal amount of the monies held in, or credited to, the GIC
Cash Account and the interest earned on those monies does not have
a bearing on the funds available to support GHL's obligations under
the DS6 Facility Agreement. The obligations of Banque AIG as the
DS6 GIC Provider are now also supported by the cash collateral on
deposit by Banque AIG with the Bank of New York.
This Notice is given by Canary Wharf Finance II plc.
Capitalised terms not otherwise defined in this notice shall
have the meanings given to them in the Sixth Restated Master
Definitions Agreement entered into between, amongst others, the
Issuer and the Trustee on 17 November 2010, or (to the extent not
defined in the Sixth Restated Master Definitions Agreement) the
seventh restated intercompany loan agreement dated 17 November
2010, between, amongst others, each of Canary Wharf Finance II plc
(the "Issuer"), CW Lending II Limited (the "Borrower"), and
Deutsche Trustee Company Limited (the "Trustee") (the "ICLA").
20 September 2011
Any questions in connection with this notice should be addressed
to the following:
John Garwood Tel No: 020 7418 2000 Email:
john.garwood@canarywharf.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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