NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION: (A) IN OR INTO OR TO ANY PERSON LOCATED OR RESIDENT IN THE UNITED STATES, ITS TERRITORIES AND POSSESSIONS (INCLUDING PUERTO RICO, THE U.S. VIRGIN ISLANDS, GUAM, AMERICAN SAMOA, WAKE ISLAND AND THE NORTHERN MARIANA ISLANDS, ANY STATE OF THE UNITED STATES AND THE DISTRICT OF COLUMBIA) (THE "UNITED STATES") OR TO ANY U.S. PERSON (AS DEFINED BELOW); OTHER THAN TO QUALIFIED INSTITUTIONAL BUYERS (AS DEFINED IN RULE 144A UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT")) HOLDING USD NOTES (AS DEFINED BELOW) WHO PROVIDE CERTAIN CONFIRMATIONS AS TO THEIR STATUS; OR (B) IN OR INTO ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO RELEASE, PUBLISH OR DISTRIBUTE THIS DOCUMENT

PARAGON MORTGAGES (NO.12) PLC

(Incorporated in England and Wales with limited liability under registered number 5386924) (the "Issuer")

announces invitations to all the holders (the "Noteholders")

of its outstanding

U.S.$1,500,000,000 Class A1 Notes due 2038 (ISIN: XS0261644941, the "Class A1 Notes")

£145,000,000 Class A2a Notes due 2038 (ISIN: XS0261646136, the "Class A2a Notes")

€245,000,000 Class A2b Notes due 2038 (ISIN: XS0261646565, the "Class A2b Notes")

U.S.$311,000,000 Class A2c Notes due 2038 (Rule 144A Note CUSIP: US69913BAB27, Reg S Note ISIN: XS0261647027, the "Class A2c Notes")

£25,000,000 Class B1a Notes due 2038 (ISIN: XS0261647886, the "Class B1a Notes")

€126,000,000 Class B1b Notes due 2038 (ISIN: XS0261648850, the "Class B1b Notes")

£17,000,000 Class C1a Notes due 2038 (ISIN: XS0261650161, the "Class C1a Notes")

€106,000,000 Class C1b Notes due 2038 (ISIN: XS0261650674, the "Class C1b Notes")

(together, the "Notes", and each a "Class" of Notes).

3 October 2024

The Issuer today announces invitations (the "Consent Solicitation")  to the Noteholders to consent to the modification of the terms and conditions of the Class A2c Notes (the "USD Notes") and consequential or related amendments to certain transaction documents relating to the USD Notes such that the existing USD LIBOR interest basis is replaced by a Compounded Secured Overnight Financing Rate ("SOFR") interest basis and new fallbacks are included to address the non-availability of SOFR or the replacement of SOFR, as proposed by the Issuer (the "Proposal") for approval by extraordinary resolution of the Noteholders of each Class (each an "Extraordinary Resolution" and together, the "Extraordinary Resolutions").

Unless otherwise indicated, capitalised terms used but not otherwise defined in this announcement have the meanings given in the Consent Solicitation Memorandum, which is available on the consent website (the "Consent Website"): https://projects.sodali.com/paragon.

The Proposal constitutes a Basic Terms Modification under the terms and conditions of the USD Notes, and therefore the holders of each Class are invited to approve the Proposal, even though only the interest rate applicable to the USD Notes (and no other Notes) will be amended if the Proposal is implemented. If an Extraordinary Resolution in respect of any Class is not successfully passed or (in the case of the USD Notes) the Eligibility Condition is not satisfied, then the Issuer will not implement the Proposal and neither the USD Notes nor any transaction documents relating to the USD Notes will be amended (irrespective of whether or not the relevant Extraordinary Resolution(s) for any of the other Classes passes).

The Issuer has convened the Meetings for the purpose of enabling the Noteholders to consider and resolve, if they think fit, to approve the Proposal by way of a separate Extraordinary Resolution in relation to each Class, implementing:

(i)        changes in the interest basis specified in the Conditions of the USD Notes from 3-month USD LIBOR to Compounded SOFR by means of a supplemental trust deed;

(ii)       inclusion of new fallbacks to address the non-availability of SOFR or the replacement of SOFR based on the Alternative Reference Rates Committee's recommendations for floating rate bonds; and

(iii)      changes in the floating rate option specified in the Swap Transaction (which, in effect, hedges the USD Notes) from USD LIBOR to Compounded SOFR (including corresponding and/or consequential amendments) and the inclusion of new fallbacks to address the non-availability of SOFR or the replacement of SOFR by means of a swap amended and restated confirmation (the "Swap Amended and Restated Confirmation"),

all as further disclosed in the consent solicitation memorandum prepared by the Issuer dated 3 October 2024 (the "Consent Solicitation Memorandum").

This announcement does not contain the full terms and conditions of the Consent Solicitation which are contained in the Consent Solicitation Memorandum. The Consent Solicitation and Proposal are being made on the terms and subject to the conditions contained in the Consent Solicitation Memorandum.

The Solicitation Agent is Lloyds Bank Corporate Markets plc and the Information and Tabulation Agent is Morrow Sodali Limited, trading as Sodali & Co.

This announcement should be read in conjunction with the Consent Solicitation Memorandum which is available from the Consent Website: https://projects.sodali.com/paragon.

Margin Adjustment

Due to the differences in the nature of USD LIBOR (including synthetic USD LIBOR) and Compounded SOFR, the replacement of USD LIBOR with Compounded SOFR as the reference rate for the USD Notes requires a corresponding credit adjustment spread to be added to the existing Notes Interest Rate Margin payable in respect of the USD Notes and to amounts payable under the Swap Transaction. The Proposal uses the "5-year historical median" methodology agreed by the International Swaps and Derivatives Association for determining this credit adjustment spread and recommended by the Alternative Reference Rates Committee for use in cash products such as the USD Notes. It involves taking the median of the daily difference between USD LIBOR and SOFR in the 5 years leading up to the date of the LIBOR Announcement. Using this methodology, the credit adjustment spread for 3-month USD LIBOR is 0.26161 per cent., as calculated and published by Bloomberg Index Services Limited on the date of the LIBOR Announcement and as referenced on Bloomberg screen YUS0003M Index on the date of the Consent Solicitation Memorandum.

Notices of Meeting in respect of the Noteholders

Notices convening meetings (the "Meetings") of the Noteholders, to be held on 25 October 2024, have been given to the Noteholders in accordance with the Conditions on the date of this announcement, including by way of an announcement on the Regulatory News Service of the London Stock Exchange plc.

Meetings in respect of each Class of Notes to be held at the offices of Clifford Chance LLP at 10 Upper Bank Street, London E14 5JJ, United Kingdom.

General

The Issuer is convening the Meetings to consider and, if thought fit, approve by way of an Extraordinary Resolution of each Class of Notes the modifications of the Conditions (and the other consequential and related modifications described in this announcement and the Consent Solicitation Memorandum).

When submitting an Electronic Voting Instruction, via the relevant Clearing Systems, or a Form of DTC Sub-Proxy, via the relevant DTC Participant, in respect of the USD Notes, or otherwise participating at the relevant Meeting in respect of the USD Notes, each Noteholder will be required to confirm whether they are an Eligible Noteholder or an Ineligible Noteholder. An Eligible Noteholder is a Noteholder of the USD Notes (a): (i) who is located and resident outside the United States and is not a U.S. person (as defined in Regulation S under the Securities Act); (ii) for Reg S USD Notes held through Euroclear or Clearstream, a QIB that has provided a validly signed Qualified Institutional Buyer Confirmation Letter in the form set out in Annex D of the Consent Solicitation Memorandum and in the manner described in the Consent Solicitation Memorandum; or (iii) for 144A USD Notes held through DTC, who has represented for itself and, if applicable on behalf of nominees or any other person on whose behalf it is acting, that it is a QIB and has provided certain confirmations as to its (or their, as the case may be) status and made certain representations in a duly executed Form of DTC Sub-Proxy; (b) not a retail investor in either the EEA or the UK; and (c) otherwise a person to whom the Consent Solicitation can be lawfully made and that may lawfully participate in the Consent Solicitation ("Eligible Noteholder").

The implementation of the Proposal will be conditional on:

(a)       the Consent Solicitation not having been terminated;

(b)       the passing of the Extraordinary Resolution in relation to each Class; and

(c)        in respect of the Extraordinary Resolution in respect of the USD Notes, that the quorum required for, and the requisite majority of votes cast at, the Meeting (including any adjournment thereof) in respect of the USD Notes will need to be satisfied by Eligible Noteholders of the USD Notes, irrespective of any participation at the relevant Meeting by Ineligible Noteholders (such condition in respect of the USD Notes, the "Eligibility Condition").