Clifden asks RMAC to set aside make-whole amounts for redemption

By Susanna Moon

Chicago, March 9 – Clifden IOM No.1 Ltd. said it is trying to confirm the authority needed to implement the amendments for some mortgage-backed debt securities issued under RMAC securitizations.

Clifden is “working with the issuers and the trustees to demonstrate to their satisfaction the necessary proof required by the issuers and the trustees to confirm that the offeror has been given authority by the noteholders to execute the [make-whole provision] resolutions on behalf of the noteholders,” according to an announcement.

The company said that it is trying to ensure that correct payments can be paid on the optional redemption on March 12.

Clifden has asked that if its authority has not been resolved by March 12, that the issuers reserve an amount equal to the distribution amount under the make-whole provision amendments before making any distributions upon exercise of the optional redemption by the issuers.

The company said the issuers should reserve the amount until the position for the implementation of the make-whole provisions has been confirmed.

The make-whole provision resolutions and amendments are not intended to prevent the exercise of the optional redemption of the issuers or any purchase of the underlying mortgages by Paratus AMC Ltd., the company said.

Clifden said it “raises no objection” to the series being redeemed at par plus accrued interest upon an optional redemption, provided that the amount requested has been reserved.

“In order to avoid the tendered notes ... remaining blocked and not able to be redeemed upon optional redemption, the offeror shall reject today the tendered notes in relation to the issuers,” the release noted.

Clifden announced the results of the tender for the RMAC securitizations on March 5.

The company had previously said on Jan. 8 that it was tendering for the notes until noon ET on March 7 at a purchase price ranging from 92% to 103% per £1,000, €1,000 or $1,000 principal amount plus an early tender premium of 1% for notes tendered by the early deadline of noon ET on Jan. 26.

The company added make-whole provisions across all of the series of notes issued by RMAC 2003-NS3 plc, RMAC 2003-NS4 plc, RMAC 2004-NS3 plc, RMAC 2004-NSP4 plc, RMAC 2005-NS1 plc, RMAC 2005-NSP2 plc, RMAC 2005-NS3 plc and RMAC 2005-NS4 plc.

The measure passed by means of written resolutions and 100% of each of the tranches had been tendered. The resolutions for RMAC 2003-NS3 plc and RMAC 2003-NS4 plc also require the consent of Ambac Assurance UK Ltd. as note controlling party.

Holders who tendered their notes will be deemed to consent to the make-whole provision resolutions.

Paratus responds

In a separate notice, Paratus AMC Ltd. said, “The addition of the make-whole and the payment of the indemnity fee would (if implemented) cause significant loss to Paratus AMC as holder of the deferred consideration and residual certificates in the securitization transactions relating to the notes, as well as losses to other holders of such residual certificates.”

Paratus said, “A change to the basis and terms on which noteholders tendered their notes is entirely inappropriate. Neither the appointment of Clifden as noteholders' agent, the insertion of the make-whole nor the payment of an indemnity fee are contemplated in any way in Clifden's original tender offer memorandum. They represent a fundamental and unilateral change from a tender process to a process in which Clifden simply seeks to be appointed as agent of noteholders for a temporary period.”

Paratus said it “will consider any action taken by any person (whether acting as agent or principal) which assists Clifden in pursuit of the proposals set out in the Clifden announcement as a potential cause of loss to Paratus AMC.”

“To the extent that Clifden engages in any such interference while acting as agent for the noteholders, noteholders may be held liable for any loss caused as a result,” the release added.

The issuer said on Feb. 20 that it was pushing up the deadline in the tender for some of the mortgage-backed debt securities issued under RMAC securitizations until noon ET on Feb. 26.

The purchase price for the series of notes issued by RMAC 2003-NS1 plc, RMAC 2003-NS2 plc, RMAC 2004-NS1 plc and RMAC 2004-NSP2 plc was amended to 105 and the early tender premium changed to zero.

Clifden is a residential and commercial real estate investor based in London.

Tender offer

Clifden said on March 8 that it is now tendering for some mortgage-backed debt securities issued under RMAC securitizations until noon ET on June 5.

The notes covered by the tender are RMAC Securities No. 1 plc’s series 2006-NS1, series 2006-NS2, series 2006-NS3, series 2006-NS4 and series 2007-NS1, according to an announcement.

For notes tendered by the early deadline of noon ET on March 23, the purchase price will be par.

Settlement is expected to occur on June 8.

Lazard & Co., Ltd. is the financial adviser. Lucid Issuer Services Ltd. (+44 20 7704 0880 or rmac@lucid-is.com) is the tender agent.

More RMAC news

As previously announced, RMAC 2003-NS4 plc, RMAC 2003-NS3 plc, RMAC 2005 - NS4 plc, RMAC 2005 - NS3 plc, RMAC 2005-NSP2 plc, RMAC 2005-NS1 plc, RMAC 2004-NS3 plc and RMAC 2004-NSP4 plc notified holders of numerous series of mortgage-backed issues that they remain obligated to redeem the notes on March 12 at par.

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