EXHIBIT 10.9
Confirmation to the
1992 ISDA Master(R) Agreement
Dated as of 15 December 2005
Attention: The Directors
To: Arran Funding Limited ("PARTY B")
From: The Royal Bank of Scotland plc ("PARTY A")
Re: [ ] Series 2005 Class [ ] Notes (the "NOTES")
Ref: [ ]
Date: 15 December 2005
Dear Sirs
The purpose of this communication is to confirm the terms and conditions of the
Swap Transaction entered into between us on the Trade Date specified below (the
"TRANSACTION"). This communication constitutes a "CONFIRMATION" as referred to
in the Master Agreement specified below.
The definitions and provisions contained in the 2000 ISDA Definitions, as
published by the International Swaps and Derivatives Association, Inc. (the
"DEFINITIONS") are incorporated into this Confirmation. In the event of any
inconsistency between the Definitions and this Confirmation, this Confirmation
will govern. Terms defined in (i) the prospectus dated 10 November 2005 in
respect of Party B's $7,500,000,000 Medium Term Note Programme (ii) the Final
Terms dated 8 December 2005 in respect of the Notes and (iii) the Arran Funding
Note Trust Deed Supplement dated 15 December 2005 in respect of the Series
2005-[ ] Notes will have the same meaning where used herein.
This Confirmation incorporates the ISDA Master Agreement and the Schedule
thereto, dated as of 15 December 2005 and the Credit Support Annex to that
Schedule dated 15 December 2005, each as amended and supplemented from time to
time (the "MASTER AGREEMENT"), between Arran Funding Limited and us. The Master
Agreement together with this Confirmation shall constitute a single agreement
between Arran Funding Limited and us in respect of this Transaction (the
"AGREEMENT"). This Transaction is entered into on the basis that, pursuant to
Part 5(m) of the Schedule, the Master Agreement is incorporated by reference
into this Confirmation so that the Master Agreement and this Confirmation shall
form a single agreement with respect to this Transaction only and no other
Transaction (other than the Transaction evidenced by the Credit Support Annex)
shall form part of such single agreement. All provisions contained in the
Master Agreement govern this Confirmation except as expressly modified below.
The terms of the particular Transaction to which this Confirmation relates are
as follows:
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1.
Party A: The Royal Bank of Scotland plc
Party B: Arran Funding Limited
Calculation Agent: Party A
Trade Date: 15 December 2005
Effective Date: 15 December 2005
Termination Date: The scheduled redemption date of the Notes,
subject to adjustment as provided herein and in
accordance with the Following Business Day
Convention.
Business Days: A TARGET Settlement Date and a day on which
commercial banks and foreign exchange markets
settle payments generally in London, England,
Jersey, Channel Islands, Edinburgh, Scotland and
New York, New York.
INITIAL EXCHANGE AMOUNTS AND FINAL EXCHANGE AMOUNTS
Party A Initial Exchange Amount: [ ]
Party A Initial Exchange Date: Effective Date
Party A Final Exchange Amount: Party A Currency Amount on the Termination Date
Party A Final Exchange Date Termination Date
Party B Initial Exchange Amount: [ ]
Party B Initial Exchange Date: Effective Date
Party B Final Exchange Amount: Party B Currency Amount on the Termination Date
Party B Final Exchange Date: Termination Date
Fixed Exchange Rate [ ]
PARTY A FLOATING RATE AMOUNTS
Party A Floating Rate Payer: Party A
Party A Currency Amount: [ ] (subject to adjustment following
the occurrence of an Amortisation
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Event or a Redemption Event as set out herein)
Party A Floating Rate Payer
Payment Dates: The 15th day of each calendar month from
and including 15 February 2006 to and including the
Termination Date, in each case subject to adjustment
in accordance with the Following Business Day
Convention.
Party A Floating Rate Option: LIBOR as calculated in accordance with Condition
6(d) of the Notes
Party A Designated Maturity: [ ]
Spread A: [ ]
Party A Floating Rate
Day Count Fraction: Actual/360
Reset Dates: First day of each Calculation Period
PARTY B FLOATING RATE AMOUNTS
Party B Floating Rate Payer: Party B
Party B Currency Amount: An amount in [ ] equal to the Party A Currency
Amount (as adjusted in accordance with the
provisions of this Confirmation) converted into
[ ] at the Fixed Exchange Rate
Party B Floating Rate Payer
Payment Dates: The 15th day of each calendar month from
and including 15 February 2006 to and including the
Termination Date, in each case subject to adjustment
in accordance with the Following Business Day
Convention.
Party B Floating Rate Option: [ ]-LIBOR-BBA
Party B Designated Maturity: 1 month provided that in respect of the first
Calculation Period the Party B Designated Maturity
shall be 2 months
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Spread B: Plus [ ]%
Party B Floating Rate
Day Count Fraction: Actual/365
Reset Dates: First day of each Calculation Period
2. DETAILS OF VARIATION TO AGREEMENT:
2.1 DEFERRAL OF FLOATING RATE AMOUNTS
(A) DEFERRAL OF PARTY A FLOATING RATE AMOUNT
In the event that, in respect of any Party A Floating Rate Payer
Payment Date, there is a Deferred Party B Floating Rate Amount (as
defined below) on the corresponding Party B Floating Rate Payer Payment
Date (as set out in Deferral of Party B Floating Rate Amount below),
then the Party A Floating Rate Amount (before taking into account any
deferred amounts) for that Party A Floating Rate Payment Date which
would, but for this provision, have been due (the "GROSS PARTY A
FLOATING RATE AMOUNT") shall be reduced by an amount equal to the
proportion thereof which the Deferred Party B Floating Rate Amount
(before taking into account any deferred amounts) bears to the Gross
Party B Floating Rate Amount (before taking into account any deferred
amounts).
The difference between the Gross Party A Floating Rate Amount and the
reduced Party A Floating Rate Amount (that difference being the
"DEFERRED PARTY A FLOATING RATE AMOUNT") shall be deferred and shall be
payable (together with interest thereon at the Party A Floating Rate
Option plus Spread A for the next Calculation Period) on the next Party
A Floating Rate Payer Payment Date. The Deferred Party A Floating Rate
Amount plus interest shall be treated as part of the Party A Floating
Rate Amount for the next Party A Floating Rate Payer Payment Date and
shall be paid in the same proportion (if any) as the corresponding
Deferred Party B Floating Rate Amount is paid on that next Party A
Floating Rate Payer Payment Date and this provision shall apply mutatis
mutandis.
(B) DEFERRAL OF PARTY B FLOATING RATE AMOUNT
If the Party B Floating Rate Amount (including any deferred amounts)
for any Party B Floating Rate Payment Date would otherwise exceed the
Class A Monthly Distribution Debt Amount (as defined in the Trust Deed
Supplement relating to the Notes) which is available to be applied in
payment of that Party B Floating Rate Amount in accordance with the
terms and conditions of the Notes, the Party B Floating Rate Amount
(including any deferred amounts) shall be reduced to the amount of
available Class A Monthly Distribution Debt Amount. The difference
between the Party B Floating Rate Amount which would, but for this
provision, have been due (the "GROSS PARTY B FLOATING RATE AMOUNT") and
the reduced Party B Floating Rate Amount which is payable (that
difference being the "DEFERRED PARTY B FLOATING RATE AMOUNT") shall be
deferred and shall be payable (together with interest thereon at the
Party B Floating Rate Option plus [ ]% for the next Calculation
Period) on the next Party B
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Floating Rate Payer Payment Date. The Deferred Party B Floating Rate
Amount plus interest thereon shall be treated as part of the Party B
Floating Rate Amount for that next Party B Floating Rate Payer Payment
Date and this provision shall apply mutatis mutandis.
2.2 AMORTISATION EVENTS
In the event that the regulated amortisation period or the rapid
amortisation period commences (either such period an "AMORTISATION
PERIOD" and the occurrence of such Amortisation Period being an
"AMORTISATION EVENT") occurs prior to the scheduled redemption date of
the Notes then the following provisions shall apply.
2.2.1 Party B will, as soon as practicable, notify Party A of the
occurrence of such Amortisation Event or procure that Party A is
notified of such occurrence and will provide Party A with such
information as Party A may require or reasonably request (to the
extent that Party B has or is able to obtain such information)
in order to determine the likely future amortisation of the
Notes;
2.2.2 The Termination Date shall be extended to the date which is the
earlier of (1) the final redemption date and (2) the date on
which the Notes issued by Party B are redeemed in full;
2.2.3 On each Party B Floating Rate Payer Payment Date falling in the
Redemption Period,
(a) The Party B Currency Amount shall be reduced (for the next
following Calculation Period for Party B) by an amount
equal to the amount of available redemption funds credited
to the Class A Distribution Ledger for distribution on
such Party B Floating Rate Payer Payment Date (immediately
prior to any distributions being made on that date) (the
amount of such reduction, the "PARTY B REDEMPTION
Amount"); and
(b) Party B shall pay to Party A an amount in [ ] equal to the
Party B Redemption Amount.
2.2.4 On each Party A Floating Rate Payer Payment Date falling in the
Redemption Period,
(a) The Party A Currency Amount shall be reduced (for the next
following Calculation Period for Party A) by an amount
(the "PARTY A REDEMPTION AMOUNT") equal to the Party B
Redemption Amount converted into [ ] at the Fixed
Exchange Rate; and
(b) Party A shall pay to Party B an amount in [ ] equal
to the Party A Redemption Amount converted into [ ]
at the Fixed Exchange Rate.
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For the purposes of the paragraphs 2.2 and 2.3, "REDEMPTION PERIOD"
means the period from and including the date on which the relevant
Amortisation Period commences to and including the Termination Date.
2.3 REDEMPTION EVENT
In the event that, as at the scheduled redemption date in respect of
the Notes, there have been credited to the Class [ ] Distribution Ledger
insufficient funds to redeem the Notes issued by Party B in full (such
event, a "REDEMPTION EVENT") and provided that no Amortisation Event
has occurred prior to such scheduled redemption date then the following
provisions shall apply:
2.3.1 Party B will, as soon as practicable, notify Party A of the
occurrence of a Redemption Event or procure that Party A is
notified of such occurrence and will provide Party A with such
information as Party A may require or reasonably request (to the
extent that Party B has or is able to obtain such information)
in order to determine the likely future amortisation of the
Notes;
2.3.2 The Termination Date shall be extended to the date which is the
earlier of (1) the final redemption date and (2) the date on
which the Notes issued by Party B are redeemed in full;
2.3.3 On the scheduled redemption date Party B shall pay to Party A an
amount equal to the Party B Interim Payment Amount and Party A
shall pay to Party B an amount equal to the Party A Interim
Payment Amount;
The "PARTY B INTERIM PAYMENT AMOUNT" shall be an amount in [ ]
equal to the amount identified as principal credited to the
Class A Distribution Ledger for distribution on the scheduled
redemption date (immediately prior to any distributions being
made on that date).
The "PARTY A INTERIM PAYMENT AMOUNT" shall be an amount in [ ]
equal to the Party B Amortisation Amount converted into
[ ] at the Fixed Exchange Rate.
2.3.4 On each Party B Floating Rate Payer Payment Date falling after
the scheduled redemption date,
(a) the Party B Currency Amount shall be reduced (for the next
following Calculation Period for Party B) by an amount
equal to the amount identified as principal credited to
the Class [ ] Distribution Ledger for distribution on such
Party B Floating Rate Payer Payment Date (immediately
prior to any distributions being made on that date) (the
amount of such reduction, the "PARTY B AMORTISATION
AMOUNT"); and
(b) Party B shall pay to Party A an amount in [ ] equal to the
Party B Amortisation Amount.
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2.3.5 On each Party A Floating Rate Payer Payment Date falling after
the scheduled redemption date,
(a) the Party A Currency Amount shall be reduced (for the next
following Calculation Period for Party A) by an amount
(the "PARTY A AMORTISATION AMOUNT") equal to the Party B
Amortisation Amount converted into [ ] at the Fixed
Exchange Rate; and
(b) Party A shall pay to Party B an amount in [ ] equal
to the Party A Amortisation Amount converted into US
dollars at the Fixed Exchange Rate.
3. ACCOUNT DETAILS
Account for Payments For: Royal Bank of Scotland, London
to Party A in [ ]: Account: [ ]
Sort Code: [ ]
SWIFT: [ ]
Account for Payments To: JP Morgan Chase Bank, New York
to Party A in [ ] Account: [ ]
SWIFT [ ]
Beneficiary: [ ]
Account Name: [ ]
Account for Payments For: National Westminster Bank, London
to Party B in [ ]: SWIFT: [ ]
Sort Code: [ ]
Account number: [ ]
Account Name: [ ]
Ref: [ ]
Account for Payments For: The Bank of New York, New York
to Party B in [ ]: SWIFT: [ ]
Account number: [ ]
Account Name: [ ]
Ref: [ ]
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4. CONTACT FOR PARTY A DOCUMENTATION AND OPERATIONS:
Address: c/o RBS Financial Markets
280 Bishopsgate
London EC2M 4RB
Attention: Swaps Administration
Fax No.: +44 20 7085 5050
5. CONTACTS FOR PARTY B DOCUMENTATION AND OPERATIONS:
Arran Funding Limited
Address: 22 Grenville Street
St. Helier
Jersey JE4 8PX
Channel Islands
Attention: The Directors, Arran Funding Limited
Fax No: +44 1534 609000
Fax No: +44 1534 609333
The Royal Bank of Scotland International Limited
Address: Royal Bank House
71 Bath Street
St. Helier
Jersey JE4 8PJ
Attention: Company Secretariat Department (Jacy Huet)
Fax No: +44 1534 286 800
6. GOVERNING LAW: England and Wales
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Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing the copy of this Confirmation enclosed for that purpose
and returning it to us.
The Royal Bank of Scotland plc is authorised and regulated by The Financial
Services Authority and has entered into this transaction as principal. The time
at which the above transaction was executed will be notified to the parties on
request.
THE ROYAL BANK OF SCOTLAND PLC
By:
Title:
Confirmed as of the date first written:
ARRAN FUNDING LIMITED
By:
Title:
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