Aspire Defence Finance PLC Series B Bondholder Meeting (4953Y)

TIDM85VK

RNS Number : 4953Y

Aspire Defence Finance PLC

04 May 2023

Aspire Defence Finance plc, the Issuer for the Allenby/Connaught Private Finance Initiative project ("the Project"), has announced on 4 May 2023 that notice has been given that a Meeting of the Series B Bondholders convened by the Series B Bond Trustee at the request of AGUK (as defined below) will be held at Cannon Place, 78 Cannon St, London EC4N 6AF on Friday, the 26th of May, 2023 at 11:00a.m. (London time) for the purpose of considering and, if thought fit, passing an Extraordinary Resolution in accordance with the provisions of the Series B Bond Trust Deed dated 6 April 2006 ("the Series B Bond Trust Deed") made between the Issuer and Citicorp Trustee Company Limited ("the Series B Bond Trustee") as trustee for the Series B Bondholders and constituting the Series B Bonds.

Assured Guaranty UK Limited ("AGUK") guarantees to the Series B Bond Trustee the full and complete payment by the Issuer in respect of amounts of scheduled payments owing by the Issuer and outstanding pursuant to the Series B Bonds as constituted by the Series B Bond Trust Deed ("the Existing Guarantee").

AGUK is authorised and regulated by the Prudential Regulation Authority (the "PRA"). Since the global financial crisis, the PRA has required that AGUK's US parent, Assured Guaranty Municipal Corp. ("AGM"), directly guarantee a proportion of the exposure for each new transaction considered by AGUK. Currently, these proportions are that AGUK guarantees 15% of the amount of the total exposure on a new deal it is involved in (the "AGUK Proportion") and AGM guarantees the remaining 85% directly (the "AGM Proportion"). AGM also provides a "second-to-pay" guarantee in respect of the AGUK Proportion. This means that the UK beneficiaries of these financial guarantees have direct recourse to AGUK's American parent for 100% of the exposure guaranteed. This co-guarantee structure is known as the "Modern Double Guarantee Structure".

AGUK is proposing to bring the current AGUK-only guarantees provided in respect of the Series B Bonds into line with the Modern Double Guarantee Structure and give bondholders direct recourse to AGM.

As the finance documents for the Project do not support the Modern Double Guarantee Structure, amendments are needed to various of the documents to accommodate it.

The deed of consent, amendment and restatement to be entered into (the "Deed of Consent, Amendment and Restatement") and provided pursuant to Document No. II describes more fully the process for implementing the Modern Double Guarantee Structure and includes amendments to various documents or amends and restates documents. It also documents the termination of the Existing Guarantee (issued by AGUK) and the issue of the 2 new guarantees, one from AGUK and one from AGM (which includes the 85% proportion and the 15% second to pay element guaranteed by AGM).

The amendments being made to the Finance Documents, subject to (i) and (ii) below, constitute the exercise of Financing Rights (as defined in the Security Trust and Intercreditor Deed), which pursuant to the terms of the Security Trust and Intercreditor Deed shall be implemented on the instructions of the Majority Creditor (being AGUK and Ambac acting together). There are exceptions to this, however, where the certain amendments which constitute Bond Series Trustee Entrenched Rights which require the prior consent of the Series B Bondholders and the Series B Bond Trustee needs to be instructed by the Series B Bondholders in respect of such. These are:

(i) the entry into the amended version of the Security Trust and Intercreditor Deed and the amendments to the Reserved Matters / Entrenched Rights (each as defined in the Security Trust and Intercreditor Deed) required to include AGM as a co-guarantor (as these are carved out from the definition of Financing Rights in the Security Trust and Intercreditor Deed); and

(ii) the Bond Series Trustee Entrenched Rights (as defined in the Security Trust and Intercreditor Deed) which would be triggered in connection with the Series B Bond Trustee's entry into and the transactions contemplated under the Deed of Consent, Amendment and Restatement.

It is these matters where the consent of the Series B Bondholders is being sought pursuant to this Extraordinary Resolution. All other aspects of the Transaction (as defined in the Deed of Consent, Amendment and Restatement) shall be affected on the instructions of the Majority Creditor in accordance with the terms of the Finance Documents.

Terms defined in the master definitions agreement dated 18 April 2018 between ProjectCo, HoldCo, the Series B Bond Trustee, the Security Trustee and AGUK (as modified from time to time) (the "Master Definitions Agreement") or the Deed of Consent, Amendment and Restatement shall, unless the context otherwise requires, have the same meaning herein.

By order of the Board,

A R McColl

Company Secretary

4 May 2023

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May 04, 2023 13:23 ET (17:23 GMT)

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