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FAB UK 2004-1 LIMITED - NOTICE OF SEPARATE NOTEHOLDER MEETINGS - LIBOR

Fab UK 2004-1 LIMITED CONSENT SOLICITATION


22 FEBRUARY 2023


Full announcement available via LUXSE.


to the holders of the

£10,000,000 Class A-2E Floating Rate Notes Due 2045

(Common Code: 018796279; ISIN: XS0187962799)

(the "Class A-2E Notes")

£8,800,000 Class A-3E Floating Rate Notes due 2045

(Common Code: 018796287; ISIN: XS0187962872)

(the "Class A-3E Notes")

£4,700,000 Class A-3F Fixed Rate Notes due 2045

(Common Code: 018796309; ISIN: XS0187963094)

(the "Class A-3F Notes")

£9,000,000 Class BE Floating Rate Notes due 2045

(Common Code: 018796317; ISIN: XS0187963177

(the "Class BE Notes")

£7,000,000 Class C Subordinated Notes due 2045

(Common Code: 018796325; ISIN: XS0187963250)

(the "Class C Notes")

£10,000,000 Class S1 Combination Notes due 2045

(Common Code: 018796333; ISIN: XS0187963334)

(the "Class S1 Combination Notes")*

and

£7,000,000 Class S2 Combination Notes due 2045

(Common Code: 018796350; ISIN: XS0187963508)

(the "Class S2 Combination Notes")* *



"Background


Since 31 December 2021, all London Interbank Offered Rate ("LIBOR") settings ceased to be published, except for the 1, 3 and 6 months settings for which a Regulatory Synthetic LIBOR rate is being published (but which is unrepresentative and is being published solely for use in legacy transactions for a time-limited period).

On 9 February 2022 the FCA confirmed that Regulatory Synthetic LIBOR was a temporary bridge to risk free rates, and its availability was not guaranteed beyond end-2022. For further information, see https://www.fca.org.uk/news/press-releases/finalising-libor-transition-achievements-sterling-markets.


On 11 February 2022, the Issuer announced a previous consent solicitation to the holders of its outstanding Notes to consider and, if thought fit, approve a Noteholder proposal on the same terms as the Noteholder Proposal set out in the current Consent Solicitation and this Notice. At the previous Meetings of Noteholders duly convened and held on 9 March 2022, the quorum was reached and the Noteholder proposal was approved by way of Majority Resolutions passed by each Class of Noteholders except for the Class C Noteholders (including the holders of the Class S1/C Component of the Class S1 Combination Notes and the holders of the Class S2/C Component of the Class S2 Combination Notes). At the adjourned Meeting for the holders of the Class C Notes (including the holders of the Class S1/C Component of the Class S1 Combination Notes and the holders of the Class S2/C Component of the Class S2 Combination Notes) duly convened on 6 April 2022, the quorum was not reached and the adjourned Meeting was dissolved.


As the implementation of the previous consent solicitation and each Majority Resolution was conditional on the passing of the Majority Resolutions at the Meetings of the Noteholders of each Class of Notes (the "Consent Condition") (subject as aforesaid in respect of the Class S1 Combination Notes and the Class S2 Combination Notes) and the Majority Resolution was not passed at the adjourned Meeting of the holders of the Class C Notes held on 6 April 2022, the Consent Condition was not satisfied and the Majority Resolutions could not be implemented from the Payment Date falling on 6 June 2022.


On 24 July 2022, the Issuer informed the Noteholders that: (i) the Interest Period that commenced on 6 December 2021 was the last Interest Period where the Interest Rate could be calculated on the basis of LIBOR in the form that has now been discontinued; (ii) for subsequent Interest Periods commencing from and including 6 June 2022, the Interest Rate would be calculated on the basis of Regulatory Synthetic LIBOR, which rate could only be utilised for so long as it is published; and (iii) a further Consent Solicitation exercise would be launched before the discontinuance of Regulatory Synthetic LIBOR.


On 16 August 2022, the FCA confirmed that it proposed to cease the requirement to continue the publication of the 1- and 6-month Regulatory Synthetic LIBOR at the end of March 2023. For further information, see https://www.fca.org.uk/news/statements/fca-encourages-market-participants-transition-libor-linked-bonds


In light of the pending discontinuance of Regulatory Synthetic LIBOR, the Issuer considers it prudent to launch another Consent Solicitation exercise in order to propose again to Noteholders the change from LIBOR to Compounded Daily SONIA as a more durable change in the benchmark used to calculate the interest payments under the floating rate notes as well as consequential and related amendments to certain terms of the Transaction Documents as set out in the Noteholder Proposal (defined below).


On the basis that the Maturity Date (being the Payment Date falling on 6 December 2045) of the Notes falls after 2021 when neither LIBOR nor Regulatory Synthetic LIBOR are available, the Issuer has convened each Meeting for the purpose of enabling the Noteholders to consider and resolve, if they think fit, to approve the Noteholder Proposal by way of a Majority Resolution separately (subject as aforesaid in respect of the Class S1 Combination Notes and Class S2 Combination Notes) in relation to each Class of the Notes (the subject matter of which may only be passed by Majority Resolution passed by each Class of Notes, as per paragraph 3 (b) (iii) of Schedule 5 to the Trust Deed) implementing (i) a change in the benchmark used to calculate the interest payment under the Notes specified in the Conditions and (ii) consequential amendments to certain of the Transaction Documents as set out in the Noteholder Proposal (defined below).


Due to the differences in the nature of LIBOR and SONIA, the replacement of LIBOR as the reference rate for the relevant Notes will also require the addition of a spread ("Spread Adjustment") to the existing Class A-2E Margin, Class A-3E Margin and Class BE Margin. The pricing methodology proposed for the calculation of the Spread Adjustment on conversion of the reference rate from LIBOR to SONIA is described in Annex B to this Notice.

A copy of the draft Amendment Deed, as referred to in the Majority Resolution below, has been sent to each of Fitch Ratings Limited ("Fitch") and S&P Global Ratings ("S&P") for their information."

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