THIS NOTICE IS IMPORTANT AND REQUIRES THE IMMEDIATE ATTENTION OF NOTEHOLDERS. IF NOTEHOLDERS ARE IN ANY DOUBT AS TO THE ACTION THEY SHOULD TAKE, THEY SHOULD SEEK THEIR OWN FINANCIAL, LEGAL OR OTHER PROFESSIONAL ADVICE, INCLUDING AS TO ANY TAX CONSEQUENCES, IMMEDIATELY FROM THEIR STOCKBROKER, SOLICITOR, ACCOUNTANT OR OTHER INDEPENDENT FINANCIAL, LEGAL OR OTHER PROFESSIONAL ADVISER
If you have recently sold or otherwise transferred your entire holding(s) of the Notes referred to below, you should immediately forward this document to the purchaser or transferee or to the broker, bank or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.
NOTICE TO NOTEHOLDERS
To the holders of the £192,270,000 8.25 per cent. Secured Loan-Backed Notes due June 2027 ISIN: XS0073407537
issued by Housing Association Funding PLC
Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 (Market Abuse Regulation) requires disclosure by or on behalf of the Issuer of any inside information concerning the Issuer.
Capitalised terms used but not otherwise defined herein shall have the meanings ascribed to them in the master schedule of definitions, interpretation and construction clauses dated 23 January 1997, as amended and restated on 30 January 1998, as amended and restated on 23 December 1999, as amended and restated on 29 June 2005, as amended and restated on 7 December 2009, as amended and restated on 11 February 2010 and as further amended and restated on 31 January 2017.
Partial Redemption occurring on the December 2017 IPD
We refer to the notice of the Issuer dated 4 December 2017 in which the Issuer informed Noteholders that it received funds from Your Housing Limited (formerly Arena Housing Group Limited) in relation to the prepayment of its loan ("4 December Notice").
The Issuer has been made aware that the amounts referred to in the 4 December Notice were incorrect as certain amounts of interest were double-counted in the amounts of Prepayment Premium. Accordingly, the Issuer hereby notifies Noteholders that the Issuer received the following amounts in respect of the prepayment from Your Housing Limited:
Your Housing Limited
- £7,215,634.94 being the total principal outstanding under its loans
- £253,709.43 of interest accrued up to the date of the prepayment;
- £2,146,568.63 comprising the relevant Prepayment Premium.
- £68,388.00 of outstanding fees, costs and expenses payable by Your Housing Limited
(together, the "Your Housing Prepayment Amounts")
Pursuant to the Supplemental Trust Deed, the Your Housing Prepayment Amounts were, as is required, applied to partially redeem the Notes and pay Noteholders on the Interest Payment Date (as defined in the Trust Deed) falling in December 2017 (the "December 2017 IPD") in accordance with the terms of the Transaction Documents as follows (the "December 2017 Redemption"):
- £6,826,396.38 was applied to redeem the Notes. This amount forms part of the total principal amount due and payable and which was applied to redeem the Notes on the December 2017 IPD of £9,866,389.25;
- £281,588.85 was applied in payment of interest due and payable in respect of the Notes. This amount forms part of the total interest amount due and payable and which was applied in respect of the Notes on the December 2017 IPD of £4,064,556.42;
- £2,507,688.72 was applied in payment of the Prepayment Premium; and
- £68,388.00 was or will be applied in repayment of outstanding fees, costs and expenses incurred by the transaction parties;
The Issuer wishes to inform Noteholders following the partial redemption of the Notes on the payment date falling in June 2017 and the December 2017 Redemption, that the column headed "Principal Amount to be redeemed per £100" and the column headed "Principal Amount Outstanding Per £100 After Redemption", in each case set out under the heading Mandatory Amortising Redemption at Condition 5(b) of the Notes shall be adjusted pursuant Condition 5(b) of the Notes. The figures in the column headed Principal Amount to be Redeemed per £100 shall be replaced with the figures in the column headed "New Principal to be Redeemed per £100" and the figures in the column headed and the column headed "Principal Amount Outstanding Per £100 After Redemption" shall be replaced with the figures in the column headed "New Principal Amount Outstanding per £100 after redemption", in each case, as set out below (the "Adjusted Amortisation Figures"):
|Interest Payment Date||Original Principal to be redeemed per £100||New Principal to be redeemed per £100||Original Principal Amount Outstanding per £100 after redemption||New Principal Amount Outstanding per £100 after redemption|
|7 June 2017||1.93636971||11.51289926||60.82461878||51.24808923|
|7 December 2017||2.01624496||5.13152819||58.80837382||46.11656104|
|7 June 2018||2.09941507||1.64632682||56.70895875||44.47023422|
|7 December 2018||2.18601594||1.71423780||54.52294281||42.75599641|
|7 June 2019||2.27618909||1.78495011||52.24675372||40.97104631|
|7 December 2019||2.37008190||1.85857931||49.87667182||39.11246700|
|7 June 2020||2.46784777||1.93524570||47.40882405||37.17722131|
|7 December 2020||2.56964649||2.01507458||44.83917756||35.16214673|
|7 June 2021||2.67564442||2.09819642||42.16353314||33.06395031|
|7 December 2021||2.78601474||2.18474701||39.37751840||30.87920330|
|7 June 2022||2.90093785||2.27486782||36.47658055||28.60433547|
|7 December 2022||3.02060154||2.36870613||33.45597901||26.23562935|
|7 June 2023||3.14520135||2.46641525||30.31077766||23.76921410|
|7 December 2023||3.27494091||2.56815488||27.03583675||21.20105922|
|7 June 2024||3.41003222||2.67409127||23.62580453||18.52696795|
|7 December 2024||3.55069605||2.78439754||20.07510848||15.74257041|
|7 June 2025||3.69716226||2.89925393||16.37794622||12.84331648|
|7 December 2025||3.84967021||3.01884816||12.52827601||9.82446832|
|7 June 2026||4.00846910||3.14337564||8.51980691||6.68109267|
|7 December 2026||4.17381845||3.27303989||4.34598846||3.40805278|
|7 June 2027||4.34598846||3.40805278||0.00000000||0.00000000|
June 2017 IPD Allocations
We also refer to the notice of the Issuer dated 8 June 2017 in which the Issuer informed Noteholders that Midland Heart Limited and The Riverside Group Limited prepaid their respective loans and that, pursuant to the Supplemental Trust Deed, the amounts of the prepayments were, as is required, applied to partially redeem the Notes and pay Noteholders on the Interest Payment Date (as defined in the Trust Deed) falling on 7 June 2017 (the "June 2017 IPD").
In partial redemption of the Notes on the June 2017 IPD, an amount of £22,471,525.57 was applied to principal and an amount of £12,504,892.75 was applied to interest and make-whole amounts. However, the Issuer has subsequently been made aware that whilst the overall amount of the payments made to Noteholders was correct, the allocation between principal and interest and make-whole amounts paid on the June 2017 IPD was not. The amount that should have been allocated to principal on the June 2017 IPD is £22,135,851.41 and the amount that should have been allocated to interest and make-whole amounts on the June 2017 IPD is £12,840,566.91 (the "Misallocation").
The Issuer has been informed that on the June 2017 IPD the Misallocation resulted in an overpayment of principal to Noteholders of £335,674.16 and an underpayment of interest and make-whole amounts to Noteholders of £335,674.16.
The Adjusted Amortisation Figures reflect a position in which the Misallocation has been corrected. The Issuer has made payments on the December 2017 IPD in connection with the December 2017 Redemption to reflect the Adjusted Amortisation Figures in order to correct such overpayment of principal and underpayment of interest and make-whole amounts.
Queries may be addressed to the Issuer as follows:
Housing Association Funding PLC:
Address: 6th Floor 65 Gresham Street, London, United Kingdom, EC2V 7NQ
Attention: The Directors
Telephone: + 44 207 7397 6372
HOUSING ASSOCIATION FUNDING PLC
7 December 2017