ALBA 2007 – 1 plc - Irish Stock Exchange

The borrowers under the Mortgage Loans (the "Borrowers") will be required to make all payments
into accounts in the name of the Seller (the "Collection Accounts"). Payments due on the majority of
the Mortgage Loans are settled by direct debit and such payments are deposited into the Collection
Accounts. Amounts standing to the credit of the Collection Accounts will be swept on a daily basis into
the Issuer Transaction Account (as more particularly described under "Credit Structure – Collection
Accounts").
Guaranteed Investment Contract
Pursuant to the terms of the Guaranteed Investment Contract, the GIC Provider will guarantee a rate of
return on funds standing to the credit of the Issuer Transaction Account. Interest on the balance will
accrue daily and the GIC Provider will deposit such amounts into the Issuer Transaction Account at the
end of each GIC Period (as more particularly described under "Credit Structure – Issuer Transaction
Account and Guaranteed Investment Contract").
Reserve Fund
The Reserve Fund will be available to the Issuer to make good certain shortfalls in the funds available
to the Issuer to meet the Senior Payments including shortfalls of interest payable on the Notes and
Principal Deficiencies. The initial amount of the Reserve Fund will, on the Issue Date, be funded from
the net proceeds of the Subordinated Notes (as more particularly described under "Credit Structure –
Reserve Fund").
Liquidity Facility
The Liquidity Facility Provider will make available to the Issuer the Liquidity Facility pursuant to the
Liquidity Facility Agreement to make good Revenue Shortfalls (as more particularly described under
"Credit Structure – Liquidity Facility").
Interest Rate Swap
In order to hedge the interest rate risk arising by virtue of the difference between the Bank of England
repo rate by reference to which the Mortgage Rate is calculated under the Bank of England Repo Rate-
Linked Mortgage Loans (save for the Fixed Reverting to SVR Mortgage Loans and Fixed Reverting to
Tracker Rate Mortgage Loans, to the extent they accrue a fixed rate of interest) and Note LIBOR, the
Issuer will on the Issue Date enter into an interest rate basis swap transaction (the "BBR–LIBOR Basis
Swap Transaction") with the Interest Rate Swap Counterparty pursuant to the Interest Rate Swap
Agreement. Under the BBR –LIBOR Basis Swap Transaction, the Issuer and the Interest Rate Swap
Counterparty will make payments to each other based on the aggregate outstanding principal balance of
the performing and delinquent but not defaulted (the "Non Defaulted") Bank of England Repo Rate-
Linked Mortgage Loans (save for the Fixed Reverting to SVR Mortgage Loans to the extent they
accrue a fixed rate of interest) in the Mortgage Pool (as more particularly described under "Credit
Structure –Swap Agreements").
In order to hedge the interest rate risk arising by virtue of the difference between LIBOR by reference
to which the Mortgage Rate is calculated under the LIBOR -Linked Mortgage Loans (save for the Fixed
Reverting to LIBOR Mortgage Loans, to the extent they accrue a fixed rate of interest) and Note
LIBOR, the Issuer will on the Issue Date enter into an interest rate basis swap transaction (the "LIBOR
Basis Swap Transaction") with the Interest Rate Swap Counterparty pursuant to the Interest Rate Swap
Agreement. Under the LIBOR Basis Swap Transaction, the Issuer and the Interest Rate Swap
Counterparty will make payments to each other based on the aggregate outstanding principal balance of
the Non Defaulted LIBOR-Linked Mortgage Loans (save for the Fixed Reverting to LIBOR Mortgage