Southern Pacific Financing 06-A Plc - Consent Solicitation/Notice of Meeting (LIBOR) - Launch

SOUTHERN PACIFIC FINANCING 06-A PLC - NOTICE OF SEPARATE INSTRUMENTHOLDER MEETINGS (LIBOR)

15 NOVEMBER 2023

Full announcement including disclaimers and offer restrictions available via Euronext

SOUTHERN PACIFIC FINANCING 06-A PLC

(incorporated with limited liability in England and Wales under number 05578381)

(the "Issuer")

NOTICE OF SEPARATE INSTRUMENTHOLDER MEETINGS

to the holders of the

£14,700,000 Class B Mortgage Backed Floating Rate Notes due 2044 (Common Code Reg S: 024108228; ISIN Reg S: XS0241082287) (the "Class B Notes")

£19,110,000 Class C Mortgage Backed Floating Rate Notes due 2044 (Common Code Reg S: 024108376; ISIN Reg S: XS0241083764) (the "Class C Notes")

£9,450,000 Class D1 Mortgage Backed Floating Rate Notes due 2044 (Common Code Reg S: 024108457; ISIN Reg S: XS0241084572) (the "Class D1 Notes")

£3,780,000 Class E Mortgage Backed Floating Rate Notes due 2044 (Common Code Reg S: 024108503; ISIN Reg S: XS0241085033) (the "Class E Notes")

£8,438,000 Class F Mortgage Backed Floating Rate Notes due 2044 (Common Code Reg S: 024411079; ISIN Reg S: XS02441107096) (the "Class F Notes")

and

£1 Residual Certificate due 2044 (Common Code: 024422143; ISIN Reg S: XS0244221437) (the "Residual Certificate")

...

Background to the LIBOR transition restructuring

Following 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 sterling regulatory synthetic LIBOR rate ("Regulatory Synthetic LIBOR") was being published (but which was unrepresentative and was being published solely for use in legacy transactions for a time-limited period).

On 9 February 2022, the UK Financial Conduct Authority ("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-transitionachievements-sterling-markets.

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-transitionlibor-linked-bonds. The publication of the 1- and 6-month Regulatory Synthetic LIBOR ceased on 31 March 2023.

On 23 November 2022, the FCA announced that it intended to compel the publication of 3-month synthetic sterling LIBOR only until end-March 2024, after which it would cease permanently. The FCA advises market participants who still have contracts referencing 3-month sterling LIBOR to ensure they are prepared for publication of the Regulatory Synthetic LIBOR alternative to cease at that time. For further information, see https://www.fca.org.uk/news/news-stories/further-consultation-announcements-winddown-libor.

In light of the end of the availability of LIBOR, regulators have been urging market participants to take active steps to implement the transition to the Sterling Overnight Index Average ("SONIA") and other riskfree rates without undue delay.

On the basis that the Final Maturity Date (being the Interest Payment Date falling on 10 December 2044) of the Notes falls after 2021, the Issuer has convened each Meeting for the purpose of enabling the Instrumentholders to consider and resolve, if they think fit, to approve the Instrumentholder Proposal by way of an Extraordinary Resolution separately in relation to each Class of the Instruments (the subject matter of which is a Basic Terms Modification (as defined in Paragraph 11 (b) of Part 1 (Terms and Conditions of the Notes) Schedule 3 (Terms and Conditions) 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 described herein.

Due to the differences in the nature of LIBOR and SONIA, the replacement of LIBOR as the reference rate for the Notes will also require the addition of a spread ("Spread Adjustment") to the existing Relevant Margin payable in respect of the Notes. 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. The Spread Adjustment will be equal to 0.1193 per cent. per annum.

A copy of the draft Amendment Deed, as referred to in the Extraordinary Resolution below, has been reviewed by each of Fitch Ratings Limited ("Fitch") and S&P Global Ratings ("S&P") and notified to Moody's Investors Service Limited ("Moody's") (on the basis that Moody's will not be providing a rating confirmation for the matter). None of Fitch or S&P has, based on the information provided to them, raised any comments in respect of the draft Amendment Deed."

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