NEWGATE FUNDING PLC - Irish Stock Exchange
NEWGATE FUNDING PLC - Irish Stock Exchange
NEWGATE FUNDING PLC - Irish Stock Exchange
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Level: 8 – From: 8 – Wednesday, December 19, 2007 – 9:31 pm – mac8 – 3894 Section 02 : 3894 Section 02<br />
SERIES CREDIT STRUCTURE<br />
In addition to the disclosure under “Credit Structure” in the Offering Circular, the following is a summary<br />
of the structure and credit arrangements underlying the Notes. Such summary should be read in conjunction<br />
with the information appearing elsewhere in this Supplement and the Offering Circular.<br />
Series Hedge Agreements<br />
Series Interest Rate Cap Agreement<br />
As described in the Offering Circular under “Credit Structure – Series Interest Rate Cap Agreement”, the<br />
Issuer will enter into an interest rate cap agreement (the Series Interest Rate Cap Agreement) with Merrill<br />
Lynch International Bank Limited at the Treasury Building, Lower Grand Canal Street, Dublin 2, Ireland as<br />
series interest rate cap provider (the Series Interest Rate Cap Provider) dated on or about the Issue Date<br />
in order to hedge against a possible rise in Note LIBOR.<br />
Under the Series Interest Rate Cap Agreement, in relation to each Distribution Period, if on the first day of<br />
any Interest Period occurring prior to 15 December 2008, 3 month LIBOR exceeds 7.25%, then the Series<br />
Interest Rate Cap Provider will make a payment to the Issuer on each relevant Distribution Date determined<br />
by reference to a notional amount of 100% of the Principal Amount Outstanding of the Notes on the first day<br />
of such Interest Period. If on the first day of any Interest Period occurring on and after 15 December 2008<br />
and prior to 15 December 2012, 3 month LIBOR exceeds 10.00%, then the Series Interest Rate Cap Provider<br />
will make a payment to the Issuer on each relevant Distribution Date determined by reference to a notional<br />
amount of the lesser of (i) 25% of the Principal Amount Outstanding of the Notes on the Issue Date and (ii)<br />
100% of the Principal Amount Outstanding of the Notes on the first day of such Interest Period.<br />
Under the terms of the Series Interest Rate Cap Agreement, the Issuer will pay an amount to the Series<br />
Interest Rate Cap Provider on the Issue Date.<br />
Any payment made by the Series Interest Rate Cap Provider under the Series Interest Rate Cap Agreement<br />
(other than any collateral payment and any termination payment received from the Series Interest Rate Cap<br />
Provider which is to be applied towards the appointment of a replacement Series Interest Rate Cap Provider)<br />
will be paid into the Series GIC Bank Account and credited to the ledger maintained by the Series Cash<br />
Manager on behalf of the Issuer in respect of Available Revenue Funds (the Series Revenue Ledger) and<br />
form part of the Available Revenue Funds for that Distribution Date.<br />
The Issuer may terminate the Series Interest Rate Cap Agreement in certain circumstances including, inter<br />
alia, where the Series Interest Rate Cap Provider fails to make a payment that is due pursuant to the Series<br />
Interest Rate Cap Agreement and/or the Series Interest Rate Cap Provider is subject to certain bankruptcy<br />
events.<br />
The Series Interest Rate Cap Provider may terminate the Series Interest Rate Cap Agreement in certain<br />
circumstances, including if the Issuer fails to make a payment that is due pursuant to the Series Interest Rate<br />
Cap Agreement; if the Issuer is subject to certain bankruptcy events; if a Series Event of Default occurs under<br />
Condition 12; or if the Notes are redeemed in full pursuant to Condition 9(d).<br />
The Series Interest Rate Cap Agreement may also be terminated by either party if it becomes illegal for either<br />
party to perform its obligations under the Series Interest Rate Cap Agreement or, subject to certain<br />
conditions, by a party affected by the imposition of withholding tax.<br />
As at the Issue Date, the Series Interest Rate Cap Guarantor (defined below) will be required to have a rating<br />
assigned for its short-term unsecured, unsubordinated and unguaranteed debt obligations of at least A-1 by<br />
S&P, P-1 by Moody’s (if any such obligations are rated by Moody’s) and F1 by Fitch and a rating assigned<br />
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