HBOS sets Dec. 21 meeting to amend covered bonds' trust deed

By Jennifer Chiou

New York, Nov. 29 - HBOS plc announced a Dec. 21 meeting in London at which holders of the following bonds will consider an extraordinary resolution:

• £500 million of series 2004-1 covered bonds due 2024;

• £500 million of series 2006-1 covered bonds due 2016;

• £600 million of series 2008-1 tranche 1 covered bonds 2013;

• £100 million of series 2008-1 tranche 2 covered bonds 2019;

• £100 million of series 2008-2 tranche 1 covered bonds 2016;

• £500 million of series 2008-2 tranche 2 covered bonds 2019; and

• £100 million of series 2008-2 tranche 3 covered bonds 2022.

According to filing with the London Stock Exchange, HBOS is the guarantor of Bank of Scotland plc's £3 billion social housing covered bond program, which was established in 2004.

The filing stated that since Standard & Poor's published revised counterparty criteria for covered bonds, the program no longer meets the requirements.

Specifically, the new guidelines from S&P do not permit the grandfathering of existing covered bonds or programs and, therefore, the program and S&P's AAA rating of the covered bonds issued under it are expected to be directly impacted if the bondholders do not consent to necessary amendments.

These changes must be implemented by Jan. 11. If this does not happen, the bonds risk downgrade.

HBOS is asking holders to permit an extraordinary resolution to amend the trust deed, conditions and agency agreement to address the changes in rating agency criteria and methodologies.

To be passed, the extraordinary resolution requires affirmative votes of holders of at least 75% of the bonds or a resolution in writing signed by or on behalf of holders of a majority of the bonds.

Questions may be directed to Lloyds TSB Bank plc (44 207 158 2057 or BoS2ConsentSolicitation@lloydstsb.co.uk) and Lucid issuer Services Ltd. (44 20 7704 0880 or lbg@lucid-is.com).

Citicorp Trustee Co. Ltd. is the bond trustee (fax 44 20 7500 5857), and the principal paying agent is Citibank NA, London Branch (fax 44 20 7508 3875/3876).

Based in Edinburgh, Scotland, HBOS is a direct subsidiary of Lloyds TSB Bank.

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