Eurosail solicits consents for five series of mortgage-backed floaters

By Susanna Moon

Chicago, Jan. 8 - Eurosail-UK 2007-6NC plc began a consent solicitation for five series of mortgage-backed floating-rate notes due September 2045 related to a restructuring, as requested by a majority of the noteholders of each series.

Separate meetings will be held on Feb. 10 in London to consider proposals set forth by noteholders.

The notes covered by the solicitation are the €111.14 million class A2a floaters, €170.53 million class A3a floaters, €30.33 million class B1a floaters, €21.67 million class C1a floaters and €18.1 million class D1a floaters.

The issuer was directed by holders of 85.59% of the A2a notes, by holders of 97.07% of the A3a notes, by holders of 100% of the B notes, by holders of 100% of the C notes, by holders of 100% of the D notes and by holders of 100% of the residual certificates for a request to agree to proposals, according to a company press release.

In order to form quorum, at least 75% of the outstanding notes must be represented at the meeting for each series. To pass, the extraordinary resolution requires a majority in favor consisting of not less than 75% of the persons voting upon a show of hands or if a poll is demanded by a majority consisting not less than 75% of the votes cast, the release noted.

On Nov. 28, 2007, the issuer entered into a trust deed with BNY Mellon Corporate Trustee Services Ltd. for the notes. And in connection with that transaction, Eurosail also entered into various hedging agreements with Lehman Brothers Special Financing Inc. and Lehman Brothers Holdings Inc.

As part of Lehman's Chapter 11 bankruptcy proceedings, the agreements have been converted into claims. Eurosail said in a notice that it doesn't know when it will receive any further payouts, thus it is proposing to sell the claims.

The issuer will hold meetings to propose extraordinary resolutions to effect the sale of the claims, and the proposed restructuring will follow.

Proposed restructuring

The first stage of the proposed restructuring will involve the following:

• The conversion of the realized termination amounts to sterling from dollars;

• The amendment of the currency of each class of notes to sterling from euro;

• The amendments to the principal amount of each class of notes by means of amendments to the pool factors applicable to the notes, which may constitute a permanent reduction in the principal amount outstanding of each of the B notes, the C notes and the D notes ("junior notes");

• An increase of 25 basis points in the margin applicable to each of the junior notes;

• Amendments to the priority of the A notes so that the A2a notes will rank senior to the A3a notes;

• The distribution of the converted realized termination amounts on or before the interest payment date falling in March (including an extraordinary payment to the residual certificate holders of £6 million and extraordinary payments to the A3a noteholders, the B noteholders, the C noteholders and the D noteholders as partial redemptions of the principal amount outstanding of the A3a notes, the B notes, the C notes and the D notes, respectively);

• A reduction in the size of the reserve fund to a minimum initial amount of £1,786,145 (plus any excess cash remaining following the extraordinary payments and amendments to the pool factors);

• The creation of a new liquidity reserve fund initially sized at about 80 bps of the principal amount outstanding of the notes for the benefit of the A2a notes and, following the redemption in full of the A2a notes, the A3a notes; and

• Amendments to transaction documents and the instruments.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.