Silverstone asks holders to approve modifying mortgage-backed floaters

By Susanna Moon

Chicago, Aug. 15 - Silverstone Master Issuer plc said it will seek holder approval of two separate extraordinary resolutions regarding the following 10 series of notes at meetings to be held on Sept. 6:

• £14,075,000,000 series 2008-1 class A mortgage-backed floating-rate notes due 2055;

• £1,475,000,000 series 2008-1 class Z mortgage-backed floating-rate notes due 2055;

• £1.25 billion series 2009-1 class A1 mortgage-backed floating-rate notes due 2055;

• £1.6 billion series 2009-1 class A2 mortgage-backed floating-rate notes due 2055;

• £650 million series 2009-1 class A3 mortgage-backed floating-rate notes due 2055;

• £263.2 million series 2009-1 class Z mortgage-backed floating-rate notes due 2055;

• $550 million series 2010-1 class A1 mortgage-backed floating-rate notes due 2055;

• €1.1 billion series 2010-1 class A2 mortgage-backed floating-rate notes due 2055;

• $300 million series 2010-1 class A3 mortgage-backed floating-rate notes due 2055; and

• £123 million series 2010-1 class Z mortgage-backed floating-rate notes due 2055.

Silverstone is seeking approval to amend the terms and conditions of the notes and the transaction documents for the notes and to enter into new documents for the issuer's residential mortgage-backed note program under which the mortgage trustee purchased portfolios of mortgage loans together with the benefit of the collateral security for the same, according to a company press release.

Amendment proposals

Silverstone seeks the following amendments:

(A) Modification of credit support and mortgage interest hedging within the program:

• A new tranche of the series 2009-1 class Z notes be issued;

• The funding 1 reserve required amount be reduced and surplus funds released from the general reserve fund to form part of the funding 1 available revenue receipts;

• The funding 1 yield reserve fund is canceled and the funds released to form part of the funding 1 available revenue receipts; and

• Amendments to the margins and rates applicable to the funding 1 swap.

(B) Amendments to the non-asset trigger event, minimum trust size and the repurchase of surplus loans:

• Reduction of the minimum trust size and repurchase of surplus loans by the seller; and

• Amendments to the non-asset trigger event related to the minimum trust size.

(C) Amendments to the terms of the scheduled amortization term advances and bullet term advances post step-up date.

(D) Amendments relating to the redemption or repayment of scheduled amortization advances in order to facilitate issuance of scheduled redemption notes in the future, including:

• Amendments to conditions precedent required in respect of a refinancing distribution; and

• Amendment to the funding 1 cash accumulation period.

(E) Granting loans by the seller to fund the expenses incurred in respect of the noteholder proposal.

More offer details

If each measure passes, holders who have sent electronic voting instructions by the early deadline will receive an incentive fee of 0.025%. No fee will be paid unless the proposal is executed.

The early voting deadline is 5 a.m. ET on Sept. 1.

The two meetings will be held at the offices of Allen & Overy LLP, One Bishops Square, London E1 6AD. Citicorp Trustee Co. Ltd. is the trustee.

Nationwide Building Society holds the series 2008-1 class A notes, the series 2008-1 class Z notes, the series 2009-1 class A1 notes, the series 2009-1 class Z notes and the series 2010-1 class Z notes and intends to vote in favor of the proposal, but Nationwide Building Society is not formally entitled to have its vote count toward the proposed extraordinary resolutions, according to the release.

The London-based issuer said that holders of the series 2008-1 notes, the series 2009-1 class A1 notes, the series 2009-1 class Z notes and the series 2010-1 class Z notes are ineligible to receive the incentive fee.

Barclays Bank plc (eu.lm@barcap.com) is the solicitation agent. Bondholder Communications Group (+44 20 7382 4580 or 212 809-2663 or e-mail Samantha Marsh at smarsh@bondcom.com) is the information agent.

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