Preferred Residential to seek noteholder approval at Aug. 15 meeting

By Jennifer Chiou

New York, July 17 – Four Preferred Residential Securities issuers announced the start of consent solicitations for several series of mortgage-backed floating-rate notes.

According to a filing with the London Stock Exchange, Lloyds Bank plc, the provider of the companies’ liquidity facility agreements, has requested that Preferred Residential conduct the solicitations.

The following Preferred Residential Securities 06-1 plc notes are affected:

• €70 million of class A2a mortgage-backed floating-rate notes due 2043;

• $20 million of class A2b mortgage-backed floating-rate notes due 2043; and

• £167.1 million of class A2c mortgage-backed floating-rate notes due 2043.

The following Preferred Residential Securities 05-2 plc notes are affected:

• €100 million of class A2a mortgage-backed floating-rate notes due 2040; and

• £96 million of class A2c mortgage-backed floating-rate notes due 2040.

Preferred Residential Securities 7 plc’s £309.6 million of class A2 mortgage-backed floating-rate notes due 2041 are part of the solicitation.

The following Preferred Residential Securities 8 plc notes are affected:

• £181 million of class A1a1 mortgage-backed floating-rate notes due December 2042;

• £100 million of class A1a2 mortgage-backed floating-rate notes due December 2042;

• $100 million of class A1b mortgage-backed floating-rate notes due December 2042; and

• €100 million of class A1c mortgage-backed floating-rate notes due December 2042.

The companies are asking holders to approve proposed amendments to liquidity facility agreements and cash/bond administration agreements dated Feb. 23, 2006, Nov. 9, 2005, Jan. 8, 2004 and Aug. 13, 2004.

The amendments would amend the liquidity facility agreements to reduce the costs currently paid by the issuers, improving interest coverage and reducing any need in the future to draw on the liquidity facility, to resize the liquidity facility and to authorize the reversal of the stand-by drawing.

Participating holders are being offered a 0.65% of the principal amount consent fee for approving the resizing of the liquidity facility and a fee of 0.1% of the principal amount for approving the stand-by drawing reversal.

Holder meetings will take place in London on Aug. 15.

Consents are needed from holders of no less than three-quarters of each series of notes.

The tabulation agent is Lucid Issuer Services Ltd. (attn: Victor Parzyjagla; 44 20 7704 0880 or prs@lucid-is.com).

The issuer is a United Kingdom-based structured finance company.

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