Clydesdale fails to pass amendments to regulated covered bonds series

By Toni Weeks

San Luis Obispo, Calif., Jan. 30 – Clydesdale Bank plc said that the extraordinary resolutions voted on at a meeting in London on Friday regarding the bank’s series 2012-1 £400 million floating-rate regulated covered bonds due 2015 and series 2012-2 £700 million 4.625% regulated covered bonds due 2026 did not pass, according to a company filing with the London Stock Exchange.

The bank was seeking to amend the notes related to a downgrade of the covered bonds to Aa1 from Aaa on March 25, 2014 by Moody’s Investors Service.

The amendments would have

• Facilitated the extension of the services provided by the corporate services provider to include acting in the roles of backup servicer facilitator and backup cash manager facilitator;

• Amended the servicing agreement to facilitate certain amendments to the backup servicing and replacement servicing arrangements;

• Amended the cash management agreement to facilitate amendments to the backup cash management and replacement cash management arrangements;

• Amended the mortgage sale agreement in relation to the rating trigger determining when legal title to the mortgage loans will be required to be transferred from the seller to the LLP; and

• Amended the master definitions schedule to reflect amendments needed to comply with the regulated covered bond regulations.

In order to form a quorum, there needed to be holders at the meeting representing at least a majority of the outstanding bonds. To pass, the measures required votes by a majority of at least three-fourths of those voting at meeting.

According to the notice, Clydesdale Bank may decide to present amended proposals to the bondholders for their consideration in due course.

Deutsche Bank AG, London Branch (+44 207 545 8000 or fax +44 207 547 5919, attn: Institutional Cash & Securities Services) was the principal paying agent. Lucid Issuer Servicer Ltd. (+44 (0) 20 7704 0880 or fax +44 (0) 20 7067 9098, attn: Thomas Choquet or Victor Parzyjagla) was the tabulation agent.

The commercial bank is based in Glasgow.

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