BM19 Honours A1frn29

TIDMBM19

RNS Number : 8199A

Honours PLC

03 January 2018

3 January 2018

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) 596/2014

FOR DISTRIBUTION ONLY OUTSIDE THE UNITED STATES TO PERSONS OTHER THAN "U.S. PERSONS" (AS DEFINED IN REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED). NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO, OR TO ANY PERSON LOCATED OR RESIDENT IN, ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO RELEASE, PUBLISH OR DISTRIBUTE THIS ANNOUNCEMENT

HONOURS PLC

(incorporated with limited liability in England and Wales with registered number 03702189)

Announcement relating to the costs of remediation

Further to the announcements on 31 October 2016 and 8 December 2017 by Honours plc (the Issuer), in which the Issuer informed noteholders that, inter alia,:

1.1 Capita Customer Management Limited (Capita) (the former administrator of Honours' student loan portfolio) had informed the Issuer that certain arrears notices it sent (in its capacity as administrator) to a portion of borrowers may not have been in compliance with applicable consumer credit legislation; and

1.2 after an initial analysis of the data relating to the loan portfolio and the affected accounts conducted as at 31 January 2016:

(a) the Issuer had been advised that as at 31 January 2016 around GBP22,500,000 of interest and charges which had been charged on the affected accounts would need to be refunded either via account book adjustments or by way of cash refunds to the affected borrowers;

(b) the Issuer had been advised that that as at 31 January 2016 there might also be a requirement for the Issuer to refund the Authority in respect of affected loans repurchased by the Authority under the cancellation indemnity in an amount of at least GBP750,000; and

(c) the Issuer had been advised that the remediation process was going to be a lengthy one and was likely to cost in the region of GBP5,000,000 to GBP10,000,000 for the services to effect such remediation,

earlier this year, the Issuer appointed a financial advisor to conduct a further detailed analysis of the loan portfolio and the affected accounts. Following the more detailed analysis conducted by the financial advisor, as part of the development of a plan to deal with the issues referred to in paragraph 1.1 above, the Issuer has been advised that the estimated total net impact of remediation on the structure (excluding implementation and advisory costs assuming full remediation as at July 2017) would be up to GBP9,000,000 of which up to GBP2,900,000 would be in the way of cash refunds to affected borrowers or the Authority, as the case may be. The aforementioned estimate does not include any potential cash refund required to be made to the Authority for overpayments made on the Interest Subsidy (which amount is currently unknown and is only capable of determination if a manual review of the loan level historical data relating to each affected loan account is undertaken). Moreover it does not include any estimate of increases in redress due to interest charged or to be charged between January 2016 and the date the loans are expected to be remediated.

The abovementioned estimate is based on a number of assumptions relating to future borrower behaviour that reflect the historical performance of the affected loans over a short period of time (December 2016 to July 2017), which may not be a good indicator of future performance when assessed over a longer period of time.

The Issuer is still in the process of deciding how best to effect the remediation and accordingly is not yet in a position to confirm what the likely cost of remediation will be and also what the costs of implementing the remediation plan will be, but it expects the costs of implementing the remediation plan to be lower than the costs previously indicated.

All of the estimated amounts set out in this notice are estimates provided to the Issuer by their financial advisor on the basis of an analysis conducted at certain points in time (namely 31 January 2016 and 31 July 2017) and are dependent on a number of variables. Accordingly these estimates/amounts (i) may significantly change; and (ii) will continue to increase until such time as the affected accounts are remediated.

The settlement amount has now been received by the Issuer pursuant to the settlement agreement entered into with Capita on 7 December 2017 and will be held in an account of the Issuer to be applied towards the remediation exercise.

The Issuer will form a proposal to be put to noteholders in the first quarter of 2018 to seek approval for, among other things, the proposed remediation plan selected by the Issuer.

Capitalised terms in this notice shall, except where the context otherwise requires and save where otherwise defined herein, bear the meanings ascribed to them in the Transaction Master Definitions and Framework Deed between, inter alios, the Issuer and Deutsche Trustee Company Limited (as the Note Trustee and the Security Trustee) dated 10 November 2006, copies of which are available for inspection during usual business hours at the offices of the Issuer set out below.

For further information, please contact:

Honours plc

Third Floor

1 King's Arms Yard

London EC2R 7AF

   Attention:          The Directors 
   Telephone:        +44 (0) 20 7397 3600 
   Fax:                  +44 (0) 20 7397 3601 
   e-mail:              Transactionteam@wilmingtontrust.com 
   Ref:                  Honours PLC 

DISCLAIMER

This Document does not contain or constitute an offer of, or the solicitation of an offer to buy, securities to any person in the United States or in any jurisdiction to whom or in which such offer or solicitation is unlawful. The securities referred to in this Document may not be offered or sold in the United States absent registration under the US Securities Act of 1933, as amended (the Securities Act) or another exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. The offer and sale of the securities referred to in this Document has not been and will not be registered under the Securities Act. There will be no public offer of the securities in the United States.

This announcement has been issued through the Companies Announcement Service of

The Irish Stock Exchange

This information is provided by RNS

The company news service from the London Stock Exchange

END

ISEBJMPTMBAMMLP

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