FCC Proudreed Properties 2005 HSBC SG CORPORATE ...

Ratings of the Notes/Rating Affirmations
The ratings assigned to each Class of Notes by the Rating Agencies address the likelihood of full and
timely payment to the Noteholders of all payments of interest on each Interest Payment Date and the
likelihood of receipt of principal due on the Final Maturity Date. There is no assurance that any such
ratings will continue for any period of time or that they will not be reviewed, revised, suspended or
withdrawn entirely by the Rating Agencies as a result of changes in or unavailability of information or if,
in the Rating Agencies’ judgement, circumstances so warrant.
For the avoidance of doubt and unless the context otherwise requires any references to ‘‘ratings’’ or
‘‘rating’’ in this Offering Circular are to ratings assigned by the Rating Agencies only. Future events,
including events affecting the Occupational Tenants and/or any Borrower and/or circumstances relating
to the Secured Properties and/or the property market generally, could have an adverse impact on the
ratings of the Notes. A credit rating is not a recommendation to buy, sell or hold securities and may be
subject to revision, suspension or withdrawal at any time by the assigning Rating Agency. Any such
revision, suspension or withdrawal may have an effect on the market value of the Notes.
By acquiring any Note, each Noteholder acknowledges that any ratings affirmation given by a Rating
Agency and/or any satisfaction of a Ratings Test:
(a) only addresses the effect of any relevant event, matter or circumstance on the current ratings assigned
by the relevant Rating Agency to the Notes;
(b) does not address whether any relevant event, matter or circumstance is permitted by the Transaction
Documents; and
(c) does not address whether any relevant event, matter or circumstance is in the best interests of, or
prejudicial to, some or all of the Noteholders,
and that no person shall be entitled to assume otherwise.
There can be no assurance that any changes to the Transaction Documents made pursuant to the
provisions in a Commercial Mortgage Loan Agreement will be favourable to or in the interests of
Noteholders. Such changes may be detrimental to Noteholders, despite the ratings of such Notes being
affirmed in connection with the proposed changes.
Refinancing Risk at Final Maturity of the Notes
The ability of the Issuer to redeem the Notes on the Final Maturity Date will, ultimately, be dependent
on the ability of the Borrowers to repay their Commercial Mortgage Loans in full on or before that date.
There is no scheduled amortisation of amounts outstanding under their Commercial Mortgage Loans
during the term of the Notes, the Commercial Mortgage Loans being repayable in full on the Final
Repayment Date. In order to repay in full their Commercial Mortgage Loans, it will be necessary for the
Borrowers to raise funds by, for example, selling the Secured Properties belonging to them to third parties
or raising new finance in an amount at least equal to the Principal Amount Outstanding on their
Commercial Mortgage Loan.
As at the Closing Date, the ratio (expressed as a percentage) of the principal amount outstanding on the
Commercial Mortgage Loans to the Paris Properties Borrowers to the aggregate Market Value of the
Secured Properties in their combined Property Portfolio as at the date of the relevant Valuation Report
will be 70 per cent. and the equivalent ratio (also expressed as a percentage) in respect of the Commercial
Mortgage Loans to the Proudreed France Borrowers and the Secured Properties in their combined
Property Portfolio as at the date of the relevant Valuation Report will be 70 per cent. A summary of the
Valuation Report is included in the section entitled ‘‘Valuation Report’’ below.
Priorities and conflicts of interest in respect of the Notes
Both prior to, and following, the delivery of a Note Enforcement Notice, payments of interest on the Class
A Notes will rank ahead of payments of interest on the Class B Notes, which will rank ahead of payments
of interest on the Class C Notes, which will rank ahead of payments of interest on the Class D Notes,
which in turn will rank ahead of payments of interest on the Class E Notes. Both prior to, and following,
the delivery of a Note Enforcement Notice, repayments of principal on the Class A Notes will rank ahead
of repayments of principal on the Class B Notes, which will rank ahead of repayments of principal on the
Class C Notes, which will rank ahead of repayments of principal on the Class D Notes, which in turn will
rank ahead of repayments of principal on the Class E Notes. Repayments of principal and payments of
interest on the Notes will rank, both prior to and following the issuance of a Note Enforcement Notice,
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