-As filed with the Securities and Exchange Commission on March 30, 2006
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
--------------------
FORM 10-K
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(MARK ONE)
|X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2005 (NO FEE REQUIRED)
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _________ TO _________
(NO FEE REQUIRED)
Arran Funding Limited South Gyle Receivables RBS Cards
Trustee Limited Securitisation Funding
Limited
(Exact name of Registrants as specified in their charters)
Jersey, Channel Islands Jersey, Channel Islands Jersey, Channel Islands
(State or other jurisdiction of incorporation or organisation)
333-128502 333-128502-02 333-128502-01
(Commission File Number)
NONE NONE NONE
(I.R.S. Employer Identification No.)
22 Grenville Street, 22 Grenville Street, Royal Bank House
St. Helier, St. Helier, 71 Bath Street
Jersey JE4 8PX Jersey JE4 8PX Jersey, JE2 4SU
Channel Islands Channel Islands Channel Islands
(Address of Principal Executive Offices)
(Zip Code)
+(44) 1534-609000 +(44) 1534-609000 +(44) 1534-285279
(Registrant's Telephone Number, including Area Code)
Securities registered or to be registered pursuant to Section 12(b) of the Act:
None
Securities registered or to be registered pursuant to Section 12(g) of the Act:
None
-----------------
Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act.
Yes |_| No |X|
Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act.
Yes |_| No |X|
Note - Checking the box above will not relieve any registrant required to file
reports pursuant to Section 13 or 15(d) of the Exchange Act from their
obligations under those Sections.
Indicate by check mark whether the registrants: (1) have filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) have been subject to such
filing requirements for the past 90 days.
Yes |X| No |_|
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (ss. 229.405 of this chapter) is not contained herein, and
will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K.
|X|
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check
one):
Large accelerated filer |_| Accelerated Filer |_| Non-accelerated Filer |X|
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Act).
Yes |_| No |X|
State the aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which the common equity
was last sold, or the average bid and asked price of such common equity, as of
the last business day of the registrant's most recently completed second fiscal
quarter.
Not applicable
2
TABLE OF CONTENTS
Page
PART I
Item 1. Business
Item 1A. Risk Factors
Item 1B. Unresolved Staff Comments
Item 2. Properties
Item 3. Legal Proceedings
Item 4. Submission of Matters to a Vote of Security Holders
PART II
Item 5. Market for Registrant's Common Equity, Related Stockholder matters
and Issuer Purchases of Equity Securities
Item 6. Selected Financial Data
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Item 8. Financial Statements and Supplementary Data.
Item 9. Changes in and Disagreement with Accountants on Accounting
and Financial Disclosure
Item 9A. Controls and Procedures
Item 9B. Other Information
PART III
Item 10. Directors and Executive Officers of the Registrant
Item 11. Executive Compensation
Item 12. Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters
Item 13. Certain Relationships and Related Transactions
Item 14. Principal Accountant Fees and Services
PART IV
Item 15. Exhibits and Financial Statement Schedules
3
PART I
Item 1. Business
Arran Funding Limited, the issuer, is a public limited liability
company which was incorporated in Jersey, Channel Islands, as a special purpose
vehicle for the issue of asset backed securities, under the Companies (Jersey)
Law 1991 on September 7, 2004 with registered number 88474. Its registered
office and principal place of business are located at 22 Grenville Street, St.
Helier, Jersey JE4 8PX, Channel Islands.
The authorised share capital of the issuer is (pound)10,000,
comprising 10,000 shares, each of (pound)1 par value. The issued share capital
of the issuer is (pound)10, comprising ten shares, each of which is fully paid.
All of the issuer's issued share capital is held by Arran Holdings Limited. It
has a fiscal year end date of 31 December, and it will publish audited accounts
for each fiscal year within six months of its year end. The issuer does not have
any subsidiaries. Its telephone number is +44 1534 609 000.
RBS Cards Securitisation Funding Limited, the loan note issuer, is a
private limited liability company incorporated in Jersey, Channel Islands. Its
registered office is located at Royal Bank House, 71 Bath Street, St. Helier,
Jersey JE4 8PJ, Channel Islands. Its telephone number is +44 1534 285 279. The
loan note issuer is a wholly-owned subsidiary of The Royal Bank of Scotland plc
("RBS").
The loan note issuer was incorporated on February 2, 2000 to issue
loan notes from time to time in respect of each trust series for which it
becomes an investor beneficiary of the receivables trust.
The loan note issuer does not have any employees. The loan note
issuer has entered into an agreement dated March 27, 2000 with The Royal Bank of
Scotland International Limited, a wholly-owned subsidiary of RBS incorporated
and resident in Jersey, under which The Royal Bank of Scotland International
Limited has agreed to provide administrative services to the loan note issuer.
South Gyle Receivables Trustee Limited, the receivables trustee, is
a private limited liability company, which was incorporated in Jersey, Channel
Islands on February 2, 2000. Its registered office is located at 22 Grenville
Street, St. Helier, and Jersey JE4 SPX, Channel Islands. Its telephone number is
+44 1534 609 000. The receivables trustee does not have any employees. The
shares of the receivables trustee are held by two nominees for a professional
trust company - not affiliated to RBS - on trust for charitable purposes. After
the receivables trustee has paid all amounts due in respect of each beneficial
interest in the receivables trust and met all of its costs and expenses, any
profits will be paid as dividends to the professional trust company which will
pay them on to charities in Jersey selected at its discretion.
The property of the Issuer currently consists of the series 2005-A
loan note and the series 2005-B loan note. The property of the Loan Note Issuer
currently consists of the investor interest in the receivables trust with
respect to each of series 2005-A and series 2005-B. The property of the
receivables trust currently consists solely of receivables in designated
revolving credit card accounts of The Royal Bank of Scotland plc and National
Westminster Bank Plc and related rights. Certificates of Compliance of the Trust
Cash Manager and the Servicer are filed herewith as Exhibits 99.1 and 99.2. The
Servicer's Certificate of Compliance contains a statement that the Servicer has
complied with all conditions and covenants under the relevant transaction
documents. The Trust Cash Manager's Certificate of Compliance contains a
statement that the Trust Cash Manager has complied with all conditions and
covenants under the relevant transaction documents.
4
Item 1A. Risk Factors
Not applicable
Item 1B. Unresolved Staff Comments
Not applicable
Item 2. Properties
See Item 15(a), Exhibits 99.3-99.15 for information provided in lieu
of information required by Item 102 of Regulation S-K.
Item 3. Legal Proceedings
The Issuer knows of no material legal proceedings involving the
Issuer. The Loan Note Issuer knows of no material legal proceedings involving
the Loan Note Issuer. The Receivables Trustee knows of no material legal
proceedings involving the receivables trust.
Item 4. Submission of Matters to a Vote of Security Holders
None
PART II
Item 5. Market for Registrant's Common Equity, Related Stockholder matters and
Issuer Purchases of Equity Securities
None of the Notes, the loan notes or the investor certificates,
representing undivided beneficial interests in the receivables trust, is traded
on any nationally recognised exchange in the United States. The Notes are listed
on the London Stock Exchange and the loan notes are listed on the Channel
Islands Stock Exchange.
As of December 15, 2005, the number of holders of record for each class of
Certificate were approximately as follows:
Series 05-A
Class A 24
Class B 7
Class C 4
Series 05-B
Class A1 7
Class A2 10
Class A3 13
5
Class B3 5
Class C1 2
Class C3 3
Item 6. Selected Financial Data
South Gyle Receivables Trustee Limited and RBS Cards Securitisation
Funding Limited attach hereto under Exhibits 99.3-99.15 the monthly Trust Cash
Manager's Reports and an aggregate of such reports in respect of (i) the
investor interest in the receivables trust relating to the series 00-B notes
(the "Series 00-B Notes") and the series 00-C notes (the "Series 00-C Notes" and
together with the Series 00-B Notes, the "Series 00 Notes") issued by Arran One
Limited and Arran Two Limited respectively and (ii) the series 00-B loan note
and 00-C loan note relating to the Series 00 Notes, which reports include all
financial information relating to the registrants that is relevant to
Noteholders. The Series 00-B Notes were repaid in full on March 15, 2005 and the
Series 00-C Notes were repaid in full on September 15, 2005.
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Not applicable
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
The Issuer has entered into a currency swap transaction for each
series and class of notes under a swap agreement with The Royal Bank of Scotland
as the swap counterparty. Under the swap agreements for each of series 2005-A
and series 2005-B, the issuer pays to the swap counterparty on each loan note
payment date in respect of the notes of such series, all amounts received by the
Issuer from the Loan Note Issuer in respect of the relevant series of loan note,
after deducting the costs and expenses of the Issuer, an amount (if any) equal
to principal and interest due on the expenses loan in respect of such series and
an amount representing any profit for the Issuer for that interest period in
respect of such series. Under the swap agreement for each of series 2005-A and
Series 2005-B, the swap counterparty pays to the Issuer on each payment date in
respect of the notes of such series, sums in U.S. dollars, Great British pounds
and/or euros, as applicable, equivalent at the swap rate to the sterling amounts
paid by the Issuer to the swap counterparty on that payment date.
Each swap agreement for any class or sub-class may be terminated early in
the following circumstances:
(a) at the option of one party, after the expiration of any
applicable grace period, if there is a failure by the other party to pay any
amounts due under the swap agreement;
(b) pursuant to the occurrence of an event of default under
condition 10 of the note conditions and the notes becoming repayable;
(c) upon the occurrence of certain other events with respect to
either party to the swap agreement, including an insolvency, merger without an
assumption of the obligations in respect of the swap agreement, or changes in
law resulting in illegality; and
(d) in the event that there is a withholding tax imposed (1) in
relation to the issuer's payments under the swap agreement (2) in relation to
the swap counterparty's payments under the swap agreement
6
(following, broadly, expiry of any period during which the swap counterparty is
required to mitigate against the imposition of such withholding tax) and if
determined, in accordance with condition 14 of the note conditions as a basic
terms modification, by an extraordinary resolution of the noteholders of the
relevant class or subclass.
Upon any early termination of a swap agreement, the issuer or the
swap counterparty may be liable to make a termination payment to the other. The
amount of any such termination payment will be based on the market value of the
swap computed in accordance with the relevant swap agreement, generally on the
basis of market quotations of the cost of entering into a swap transaction with
the same terms and conditions that would have the effect of preserving the
respective full payment obligations of the parties, in accordance with the
procedures set forth in the relevant swap agreement. Any such termination
payment could, if interest rates and/or the relevant currency exchange rate had
changed significantly, be substantial.
Upon termination of a swap agreement and no replacement swap
counterparty being arranged within the required time, the security under the
trust deed (and the supplement to the trust deed) in respect of the relevant
series will become enforceable. If such security is enforced, the proceeds
thereof will be applied in payment of amounts under the order of priority of
payments set forth in the conditions of the notes of such series. In the event
that a swap agreement with respect to a specific class or sub-class is
terminated not as a result of a swap counterparty swap event of default (as
defined below), then any termination payment to be paid to the swap counterparty
by the issuer in accordance with the early termination provisions of such swap
agreement shall rank pari passu with only those payments to be made with respect
to the relevant class or sub-class of notes corresponding to the relevant swap
agreement.
Certain events including, without limitation, failure to pay or
deliver, misrepresentation, insolvency or bankruptcy pertaining to the swap
counterparty (a "swap counterparty swap event of default") may result in the
early termination of the relevant swap agreement. In the event that a swap
agreement is terminated as a result of a swap counterparty swap event of
default, then any termination payment to be paid to the swap counterparty by the
issuer in accordance with the early termination provisions of such swap
agreement shall be subordinated to any payments to be made under the relevant
notes.
Item 8. Financial Statements and Supplementary Data.
Not applicable
Item 9. Changes in and Disagreement with Accountants on Accounting and Financial
Disclosure
NONE
Item 9A. Controls and Procedures
Not applicable
Item 9B. Other Information
Taxation
7
MATERIAL UNITED KINGDOM TAX CONSEQUENCES
The comments below are of a general nature based on current United
Kingdom law and practice as of the date of this Annual Report on Form 10-K and
are subject to any change in law that may take effect after this date. They are
made on the assumption that there will be no substitution of the issuer and do
not consider the tax consequences of any such substitution. The comments do not
purport to be a complete analysis of all UK tax considerations relating to the
notes. They relate only to the position of persons who are the absolute
beneficial owners of their notes and may not apply to certain classes of persons
such as dealers. They do not necessarily apply where the income is deemed for
tax purposes to be income of any other person. Any noteholders who are in doubt
as to their tax position should consult their professional advisers.
Noteholders who may be liable to taxation in jurisdictions other
than the United Kingdom in respect of their acquisition, holding or disposal of
the notes are particularly advised to consult their professional advisers as to
whether they are so liable (and, if so, under the laws of which jurisdictions),
since the following comments relate only to certain United Kingdom taxation
aspects of payments in respect of the notes. In particular, noteholders should
be aware that they may be liable to taxation under the laws of other
jurisdictions in relation to payments in respect of the notes even if such
payments may be made without withholding or deduction for or on account of
taxation under the laws of the United Kingdom.
UK withholding tax
The notes issued by the Issuer will constitute "quoted Eurobonds"
provided they are and continue to be listed on a recognised stock exchange
within the meaning of section 841 of the Income and Corporation Taxes Act 1988.
The London Stock Exchange is a recognised stock exchange for these purposes.
Under HM Revenue and Customs published practice, securities will be treated as
listed on the London Stock exchange if they are admitted to the Official List by
the United Kingdom Listing Authority and are admitted to trading on the London
Stock Exchange. Whilst the notes are and continue to be quoted Eurobonds,
payments of interest on the notes may be made without withholding or deduction
for or on account of United Kingdom income tax.
In all cases falling outside the exemption described above, interest
on the notes may be paid under deduction of United Kingdom income tax at the
lower rate (currently 20 per cent.) subject to such relief as may be available,
for example under the provisions of any applicable double taxation treaty.
Provision of information
Noteholders who are individuals should note that where any interest
on notes is paid to them (or to any person acting on their behalf) by the issuer
or any person in the United Kingdom acting on behalf of the issuer (a "paying
agent"), or is received by any person in the United Kingdom acting on behalf of
the relevant noteholder (other than solely by clearing or arranging the clearing
of a cheque) (a "collecting agent"), then the issuer, the paying agent or the
collecting agent (as the case may be) may, in certain cases, be required to
supply to the United Kingdom HM Revenue and Customs details of the payment and
certain details relating to the noteholder (including the noteholder's name and
address). These provisions will apply whether or not the interest has been paid
subject to withholding or deduction for or on account of United Kingdom income
tax and whether or not the noteholder is resident in the United Kingdom for
United Kingdom taxation purposes. Where the noteholder is not so resident, the
details provided to the United Kingdom HM Revenue arid Customs may, in certain
cases, he passed by the United Kingdom HM Revenue and Customs to the tax
authorities of the jurisdiction in which the noteholder is resident for taxation
purposes.
8
Discount
Notes may be issued at an issue price of less than 100 per cent. of
their principal amount. Any discount element on any such notes will not be
subject to any United Kingdom withholding tax pursuant to the provisions
mentioned above, but may he subject to reporting requirements as outlined above.
EU Directive on the taxation of savings income
Under EC Council Directive 2003/48/EC on the taxation of savings
income, each member state is required, from July 1, 2005, to provide to the tax
authorities of another member state details of payments of interest or other
similar income paid by a person within its jurisdiction to, or collected by such
a person for, an individual resident in that other member state; however, for a
transitional period, Austria, Belgium and Luxembourg may instead apply a
withholding system in relation to such payments, deducting tax at rates rising
over time to 35 per cent. The transitional period is to terminate at the end of
the first fiscal year following agreement by certain non-EU countries to the
exchange of information relating to such payments.
Also with effect from July 1, 2005, a number of non-EU countries,
and certain dependent or associated territories of certain member states
(including Jersey), have agreed to adopt similar measures (either provision of
information or transitional withholding) in relation to payments made by a
person within its jurisdiction to, or collected by such a person for, an
individual resident in a member state. In addition, the member states have
entered into reciprocal provision of information or transitional withholding
arrangements with certain of those dependent or associated territories in
relation to payments made by a person in a member state to, or collected by such
a person for, an individual resident in one of those territories.
General issues
The references to "interest" above mean "interest" as understood in
United Kingdom tax law. The statements above do not take any account of any
different definitions of "interest" or "principal" which may prevail under any
other law or which may be created by the terms and conditions of the notes or
any related documentation.
UK tax overview for US noteholders
A US noteholder will not be considered to be resident in the United
Kingdom for United Kingdom tax purposes or otherwise subject to United Kingdom
taxation on its income from the notes (other than tax withheld at source as
discussed above) solely by reason of its holding of notes.
UK tax overview for noteholders within the charge to UK tax
Noteholders who are within the charge to UK corporation tax, income
tax, capital gains tax or inheritance tax will generally be subject to tax in
respect of their notes in accordance with the applicable legislation.
PART III
Item 10. Directors and Executive Officers of the Registrant
The following sets out the directors, the directors' ages and the
directors' term of office for Arran Funding Limited, RBS Cards Securitisation
Funding Limited and South Gyle Receivables Trustee Limited as at December 31,
2005.
9
Arran Funding Limited
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Name Age Term of Office
- --------------------------------------------------------------------------------
Helen Grant 39 Open duration, as permitted by
Jersey law
- --------------------------------------------------------------------------------
Louise Kerhoat 30 Open duration, as permitted by
Jersey law
- --------------------------------------------------------------------------------
Gareth Paul Essex-Cater 47 Open duration, as permitted by
Jersey law
- --------------------------------------------------------------------------------
Lynn Cleary 34 Open duration, as permitted by
Jersey law
- --------------------------------------------------------------------------------
RBS Cards Securitisation Funding Limited
- --------------------------------------------------------------------------------
Name Age Term of Office
- --------------------------------------------------------------------------------
Mark Hansford 41 Open duration, as permitted by
Jersey law
- --------------------------------------------------------------------------------
Lynn Cleary 34 Open duration, as permitted by
Jersey law
- --------------------------------------------------------------------------------
Helen Grant 39 Open duration, as permitted by
Jersey law
- --------------------------------------------------------------------------------
Robert Niall Douglas 43 Open duration, as permitted by
Jersey law
- --------------------------------------------------------------------------------
South Gyle Receivables Trustee Limited
- --------------------------------------------------------------------------------
Name Age Term of Office
- --------------------------------------------------------------------------------
Helen Grant 39 Open duration, as permitted by
Jersey law
- --------------------------------------------------------------------------------
Louise Kerhoat 30 Open duration, as permitted by
Jersey law
- --------------------------------------------------------------------------------
Gareth Paul Essex-Cater 47 Open duration, as permitted by
Jersey law
- --------------------------------------------------------------------------------
Item 11. Executive Compensation
No applicable
Item 12. Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
Arran Funding Limited
- ----------------------------------------------------------------------------------------------------
Title of Class Name and Address of Amount and Nature of Percent of Class
Beneficial Owner Beneficial Ownership
- ----------------------------------------------------------------------------------------------------
Ordinary Shares Arran Charitable Trust 10 shares 100%
22 Grenville Street
St Helier, Jersey JE4 8PX
- ----------------------------------------------------------------------------------------------------
10
RBS Cards Securitisation Funding Limited
- ----------------------------------------------------------------------------------------------------
Title of Class Name and Address of Amount and Nature of Percent of Class
Beneficial Owner Beneficial Ownership
- ----------------------------------------------------------------------------------------------------
Ordinary Shares The Royal Bank of Scotland plc 10 shares 100%
36 St Andrew Square
Edinburgh EH2 2YB
Scotland
- ----------------------------------------------------------------------------------------------------
South Gyle Receivables Trustee Limited
- ----------------------------------------------------------------------------------------------------
Title of Class Name and Address of Amount and Nature of Percent of Class
Beneficial Owner Beneficial Ownership
- ----------------------------------------------------------------------------------------------------
Ordinary Shares South Gyle Charitable Trust 10 shares 100%
22 Grenville Street
St Helier, Jersey JE4 8PX
- ----------------------------------------------------------------------------------------------------
Item 13. Certain Relationships and Related Transactions
NONE
Item 14. Principal Accountant Fees and Services
Not applicable
PART IV
Item 15. Exhibits and Financial Statement Schedules
(a) Exhibits
(31.1) Sarbanes-Oxley Certification of Arran Funding Limited
(31.2) Sarbanes-Oxley Certification of South Gyle Receivables Trustee
Limited
(31.3) Sarbanes-Oxley Certification of RBS Cards Securitisation Funding
Limited
(99.1) Trust Cash Manager's Certificate of Compliance
(99.2) Servicer's Officer's Certificate of Compliance
(99.3-99.5) Series 00-B Monthly Trust Cash Manager Reports
(99.6-99.13) Series 00-C Monthly Trust Cash Manager Reports
(99.14) Series 00-B Aggregate Statement of Principal and Interest
Distributions to Noteholders
(99.15) Series 00-C Aggregate Statement of Principal and Interest
Distributions to Noteholders
11
(b) Not applicable
(c) Omitted
12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
ARRAN FUNDING LIMITED
By: The Royal Bank of Scotland plc, as Servicer
/s/Colin Baillie
---------------------------------
Name: Colin Baillie, as Senior Officer in charge
of the servicing function of the Servicer
RBS CARDS SECURITISATION FUNDING LIMITED
By: The Royal Bank of Scotland plc, as Servicer
/s/Colin Baillie
---------------------------------
Name: Colin Baillie, as Senior Officer in charge
of the servicing function of the Servicer
SOUTH GYLE RECEIVABLES TRUSTEE LIMITED,
By: The Royal Bank of Scotland plc, as Servicer
/s/Colin Baillie
---------------------------------
Name: Colin Baillie, as Senior Officer in charge
of the servicing function of the Servicer
Date: March 30, 2006
13
Index to Exhibits
Exhibit No. Document Description
31.1 Sarbanes-Oxley Certification of Arran Funding Limited
31.2 Sarbanes-Oxley Certification of South Gyle Receivables Trustee
Limited
31.3 Sarbanes-Oxley Certification of RBS Cards Securitisation
Funding Limited
99.1 Trust Cash Manager's Certificate of Compliance
99.2 Servicer's Certificate of Compliance
99.3-99.5 Series 00-B Monthly Trust Cash Manager Reports
99.6-99.13 Series 00-C Monthly Trust Cash Manager Reports
99.14 Series 00-B Aggregate Statement of Principal and Interest
Distributions to Noteholders
99.15 Series 00-C Aggregate Statement of Principal and Interest
Distributions to Noteholders
14