Aire Valley issuers begin consent solicitations for asset-backed notes

By Angela McDaniels

Tacoma, Wash., Sept. 22 – Aire Valley Mortgages 2004-1 plc, Aire Valley Mortgages 2005-1 plc, Aire Valley Mortgages 2006-1 plc and Aire Valley Mortgages 2007-1 plc began consent solicitations for 32 series of asset-backed floating-rate notes due September 2066, according to a filing with the London Stock Exchange.

The issuers are seeking approval of two extraordinary resolutions.

First resolution

The first extraordinary resolution would allow Bradford & Bingley plc to replace £280 million of the funds standing to the credit of the general reserve fund with a corresponding increase in the funding 1 share of the mortgages trust funded by a subordinated loan provided by Bradford & Bingley.

If the first extraordinary resolution is passed, the notes issued by Aire Valley Mortgages 2007-2 and the notes issued by Aire Valley Mortgages 2008-1 will be redeemed, and Bradford & Bingley proposes to repurchase a portfolio of loans from the mortgages trust. It is also proposed that the redundant Funding 2 and Funding 3 vehicles be removed to reduce costs associated with keeping them active.

Second resolution

The second extraordinary resolution would further the ability of the servicer to sub-contract or delegate its function and duties provided that, among other things, Funding 1 and the security trustee have received written confirmation from each rating agency that the ratings of the existing notes would not be adversely affected.

Under the current terms, the servicer is only able to sub-contract or delegate its function and duties if approval has been gained by Funding 1 and the security trustee. The servicer would remain responsible for the actions of any such delegate or sub-contractor.

The issuers also propose removing a redundant provision to reflect the fact that all collections from borrowers are held with an account bank other than the mortgages trustee account bank.

According to the filing, the rating agencies have confirmed that the resolutions, if implemented, are not expected to have an adverse effect on the ratings of the existing notes.

Meetings

Holders will vote on the proposals at meetings on Oct. 17. The latest time for obtaining a voting certificate to attend a meeting in person or for voting instructions to otherwise be given is 5 p.m. ET on Oct. 14.

There will be a single meeting for each issuer, and all existing noteholders of that issuer will vote together irrespective of class.

The consent solicitations cover Aire Valley Mortgages 2004-1’s £215 million series 3 class A1 notes, €460 million series 3 class A2 notes, £20 million series 3 class B1 notes, €25 million series 3 class B2 notes, £20 million series 3 class C1 notes, €31 million series 3 class C2 notes, £15 million series 3 class D1 notes and €22 million series 3 class D2 notes.

They cover Aire Valley Mortgages 2005-1’s £229 million series 2 class A1 notes, €276 million series 2 class A2 notes, $50 million series 2 class A3 notes, £10 million series 2 class B2 notes, €23 million series 2 class B2 notes and €41.8 million series 2 class C2 notes.

They cover Aire Valley Mortgages 2006-1’s $1.5 billion series 1 class A notes, €854 million series 2 class A1 notes, £400 million series 2 class A2 notes, £400 million series 2 class A3 notes, $70 million series 1 class B1 notes, €20 million series 1 class B2 notes, £10 million series 1 class B3 notes, €62.5 million series 2 class B2 notes, £23 million series 2 class B3 notes, €104 million series 1 class C2 notes and €106.9 million series 2 class C2 notes.

They cover Aire Valley Mortgages 2007-1’s $700 million series 2 class A1 notes, €575 million series 2 class A2 notes, £300 million series 2 class A3 notes, £62.5 million series 1 class B notes, £75 million series 2 class B notes, £62.5 million series 1 class C notes and £81.25 million series 2 class C notes.

The solicitation agent is Barclays Bank plc (44 203 134 8515 or eu.lm@barclays.com). The tabulation agent is Bank of New York Mellon (44 20 1202 689644 or debtrestructuring@bnymellon.com).

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