Eurosail solicits consents for mortgage-backed floaters, certificates

By Jennifer Chiou

New York, Oct. 4 - Eurosail-UK 1007-5NP plc announced the start of its consent solicitation for the following securities:

• €626.3 million of class A1a mortgage-backed floating-rate notes due September 2045;

• £75 million of class A1c mortgage-backed floating-rate notes due September 2045;

• £29.04 million of class B1c mortgage-backed floating-rate notes due September 2045;

• £18.69 million of class C1c mortgage-backed floating-rate notes due September 2045;

• £13.22 million of class D1c mortgage-backed floating-rate notes due September 2045; and

• 10,000 residual certificates.

The issuer is convening separate meetings for the holders of the notes and certificates, the first of which will begin at 6 a.m. ET on Oct. 31 in London.

According to a company notice, Eurosail has been informed that holders of a majority of each of the notes series and certificates are to agree to the proposals.

A quorum will be reached if holders of at least 50% of the notes are present at the meeting.

Background

On Nov. 19, 2007, Eurosail entered into a trust deed with the trustee BNY Mellon Corporate Trustee Services Ltd. and also entered into various hedging agreements with Lehman Brothers Special Financing Inc. and Lehman Brothers Holdings Inc.

The issuer then entered into a termination and settlement agreement dated March 30, 2011 with BNY Mellon and the Lehman entities, under which they agreed to stipulate Eurosail's claims against Lehman at an agreed value of $170 million.

The issuer said that it subsequently received a total of $41.8 million from Lehman Brothers Special Financing and $14.61 million from Lehman Brothers Holdings, with further distributions that were to be made on Oct. 3.

Eurosail said that it is not certain when it will receive all remaining distributions, and it has consequently sanctioned the sale of the remaining claims against Lehman.

The sale has not taken place, and Eurosail is asking for holder approval to, among other things, authorize it to make AgFe LLP as the auction agent, enter into non-disclosure agreements with prospective purchasers and assign all of its rights to the remaining claims to the winning bidder.

Proxy forms may be delivered to the Bank of New York Mellon (attn: Adam Decapio; 315 414-3360 or fax 732 667-9408).

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