ALBA 2007 â 1 plc - Irish Stock Exchange

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amounts paid to it by Borrowers under the Mortgage Loans. Similarly, to the extent that any premium received by the Issuer from a replacement interest rate swap counterparty or cross currency swap counterparty upon entry into replacement transactions together with any collateral provided by the Interest Rate Swap Counterparty or Cross Currency Swap Counterparty, respectively, is insufficient to satisfy any termination payment due to the respective Swap Counterparty under the Interest Rate Swap Agreement or, as the case may be, the Cross Currency Swap Agreement, the respective Swap Counterparty will receive any such shortfall in accordance with the applicable Priority of Payments. No assurance can be given as to the ability of the Issuer to find (i) a replacement interest rate swap counterparty which meets the Required Interest Rate Swap Counterparty Ratings and which will agree to enter into replacement interest rate swap transactions, or (ii) a replacement cross currency swap counterparty which meets the Required Cross Currency Swap Counterparty Ratings and which will agree to enter into a replacement cross currency swap transaction. Risks Associated with Rising Mortgage Rates The Mortgage Rate payable under the Bank of England Repo Rate-Linked Mortgage Loans (save for the Fixed Reverting to SVR Mortgage Loans, to the extent they accrue a fixed interest rate) is calculated by reference to the Bank of England repo rate. The Mortgage Rate payable 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) is calculated by reference to LIBOR. Both the Bank of England repo rate and LIBOR may be subject to variations. The Issuer could be subject to a higher risk of default in payment by a Borrower under the Bank of England Repo Rate-Linked Mortgage Loans as a result of an increase in the Bank of England repo rate or under the LIBOR-Linked Mortgage Loans as a result of an increase in LIBOR. Limited Liquidity The ability of the Issuer to redeem all of the Notes and the relevant Instruments in full, including following the occurrence of an Event of Default in relation to the Notes and the relevant Instruments while any of the Mortgage Loans are still outstanding, may depend upon whether the Mortgage Loans can be realised to obtain an amount sufficient to redeem the Notes and the relevant Instruments. There is not, at present, an active and liquid secondary market for the Notes or the Instruments. There can be no assurance that a secondary market for the Notes will develop or, if a secondary market does develop, that it will provide Noteholders or Instrumentholders with liquidity of investment or that it will continue for the life of the Notes or Instruments. To date, no underwriter has indicated that they intend to establish a secondary market in the Notes or the Instruments. Risks Related to the MERCs The MERCs are generally more speculative investments than the Notes and investors should be aware of the special risks associated with the MERCs as set out below. The MERCs represent an entitlement only to amounts received by the Issuer in respect of the obligation of Borrowers, in certain circumstances, to pay Mortgage Early Repayment Charges. MERC Holders do not have an entitlement to Mortgage Early Repayment Charges received or receivable from Borrowers acquiring Ported Mortgage Loans as such amounts will be waived or refunded to the Borrowers. The entitlement of MERC Holders to receive MERC Holder Payments from time to time will be contingent upon the Notes remaining outstanding. High rates of prepayment or enforcement of Mortga ge Loans are likely to result in increased Mortgage Early Repayment Charges. Correspondingly, lower rates of prepayments or enforcements of Mortgage Loans are likely to result in reduced MERC Holder
Payments. The actual lives of the MERCs cannot be predicted, however, as the actual rate of prepayment of the Mortgage Loans is unknown. The rating of S&P on the MERCs addresses the likelihood of receipt by MERC Holders of Mortgage Early Repayment Charges actually received by the Issuer if enforceable. The ratings of Fitch and Moody's of the MERCs address the likelihood of receipt by MERCs Holders of MERC Holder Payments assuming, without any independent investigation that (i) payment of the Mortgage Early Repayment Charge corresponding to the applicable MERC Holder Payments is legal, valid and binding and enforceable against the Borrowers and (ii) such Mortgage Early Repayment Charge is actually collected from Borrowers, received by the Issuer, and not refunded to the Borrower by the Seller. Whilst MERCs will have voting rights amongst themselves, the MERCs will carry no voting rights in respect of the Notes, save that MERCs will have Instrumentholder Entrenched Rights. See MERC Condition 10. As all Mortgage Loans in the Preliminary Completion Mortgage Pool were completed by 23 January <strong>2007</strong>, few Mortgage Early Repayment Charges in respect of the Completion Mortgage Pool are expected to arise after 1 February 2010. See "The Mortgage Pool – Mortgage Early Repayment Charges". A wide range of factors will affect the Mortgage Early Repayment Charges received by the Issuer including the date of origination of each Mortgage Loan comprised in the Completion Mortgage Pool, the rate at which Borrowers voluntarily redeem Mortgage Loans, the number of Mortgage Loans which are subject to enforcement proceedings, the number of redemptions that arise as a consequence of the death of Borrowers and regulatory changes that prescribe the amount of redemption compensation a lender may charge. Risks Related to the Mortgage Loans Warranties and Limitation of Seller's Liability Neither the Arranger, the Managers, the Issuer nor the Trustee have undertaken or will undertake any investigations, searches or other actions in respect of the Mortgage Loans and their Related Security and will rely instead on, inter alia, the benefit of the warranties given by the Seller to the Issuer in the Mortgage Sale Agreement (the "Warranties"). The sole remedy provided for in the Mortgage Sale Agreement (subject to the relevant cure period as set out in the Mortgage Sale Agreement and save as described below) of each of the Issuer and the Trustee in respect of a breach of Warranty in relation to a Mortgage Loan shall be the requirement that the Seller repurchase any Mortgage Loan which is the subject of the breach, provided that this shall not limit any other remedies available to the Issuer and/or Trustee if the Seller fails to repurchase a Mortgage Loan when obliged to do so. There can be no assurance that the Seller will have the financial resources to honour such obligations under the Mortgage Sale Agreement. Such obligations are not guaranteed by nor will they be the responsibility of any person other than the Seller and neither the Issuer nor the Trustee will have recourse to any other person in the event that the Seller, for whatever reason, fails to meet such obligations. See "Sale of the Mortgage Pool – Warranties and Breach of Warranties". The Mortgage Sale Agreement contains various restrictions and limits (including financial/monetary limits and time caps) on the Seller's liability and, in connection with its obligation to repurchase the Mortgage Loans, provide that the Issuer shall have no claim or remedy in respect of any breaches of the Warranties where such restrictions or limits apply. Accordingly, the Issuer may suffer loss in respect of matters referred to in the Warranties. Further, the Issuer may not have any direct rights (under general or contract law) against any solicitors or valuers who, when acting for the Originator in
Page 1 and 2: ALBA 2007 - 1 plc (Incorporated in
Page 3 and 4: As a condition to the issue of the
Page 5 and 6: PLC (in its capacity as account ban
Page 7 and 8: In connection with the issue and di
Page 9 and 10: SUMMARY INFORMATION This summary mu
Page 11 and 12: (a) (b) (c) the Completion Mortgage
Page 13 and 14: A2 Notes will rank in priority to t
Page 15 and 16: Noteholders and (iii) limiting the
Page 17 and 18: Principal Amount Outstanding togeth
Page 19 and 20: applicable, subject to the payment
Page 21 and 22: Agreement, the Cash Management, Mas
Page 23 and 24: Loans to the extent they accrue a f
Page 25 and 26: RISK FACTORS The following is a sum
Page 27 and 28: described in the previous sentence
Page 29: the Mortgage Rate for each of which
Page 33 and 34: status, repayment ability, debt-to
Page 35 and 36: There are concentrations of Propert
Page 37 and 38: and the right of the relevant Borro
Page 39 and 40: contracts) has to be issued or appr
Page 41 and 42: No assurance can be given that chan
Page 43 and 44: introduce alternative penalties for
Page 45 and 46: unforeseen taxable profits in the I
Page 47 and 48: company which is a party to an arra
Page 49 and 50: CREDIT STRUCTURE General The follow
Page 51 and 52: thereon) other than, following any
Page 53 and 54: Available Redemption Funds On any P
Page 55 and 56: (c) the Liquidity Facility is not r
Page 57 and 58: (d) (e) (f) the aggregate balance o
Page 59 and 60: (d) fourth, to the C Principal Defi
Page 61 and 62: In the event that the long-term, un
Page 63 and 64: the calculation period applicable t
Page 65 and 66: Assets except to the extent of any
Page 67 and 68: (B) (C) the special servicing fee d
Page 69 and 70: (xii) (xiii) (xiv) (xv) (xvi) (xvii
Page 71 and 72: (vii) (viii) (ix) seventh, pari pas
Page 73 and 74: credit of the Reserve Ledger to the
Page 75 and 76: elated rights and powers, and other
Page 77 and 78: CAPITALISATION STATEMENT The follow
Page 79 and 80: THE SERVICER Homeloan Management Li
Page 81 and 82:
THE ACCOUNT BANK AND THE GIC PROVID
Page 83 and 84:
THE INTEREST RATE SWAP COUNTERPARTY
Page 85 and 86:
THIRD PARTY INFORMATION The informa
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insurance or endowment policy or ot
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Approximately 49.74 per cent. by lo
Page 91 and 92:
• Investment properties (resident
Page 93 and 94:
• Reference from current landlord
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• Properties under 10 years old w
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(a) (b) CCJs/Defaults will only be
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CHARACTERISTICS OF THE PRELIMINARY
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Distribution by Current Loan to Val
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Distribution by Property Type Curre
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19. Distribution by Current Margin
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Distribution by Discount over Rever
Page 109 and 110:
Distribution of Early Redemption Ch
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Distribution by Original Loan to Cu
Page 113 and 114:
9. Shared Ownership Status Shared O
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17. Distribution by Arrears Multipl
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24. Distribution by Interest Rate f
Page 119 and 120:
Section C: Non-Conforming Mortgage
Page 121 and 122:
Distribution by Total Number of Cou
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Distribution by Region Current Bala
Page 125 and 126:
20. Distribution by Stabilised Marg
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27. Distribution of Early Redemptio
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companies and the Seller (or GMAC-R
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1. Lending Criteria Subject to GMAC
Page 133 and 134:
SERVICING AND SPECIAL SERVICING OF
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The Servicer is, under the Servicin
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(m) (n) (o) (p) (q) (r) (s) (t) (u)
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(k) (l) (m) (n) the total balance o
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(o) (p) (q) the balance of the Port
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Any credit agreement intended to be
Page 145 and 146:
Arrears must be dealt with sympathe
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(p) (q) (r) (s) interest on the Not
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Weighted Average Life of D Notes in
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SUMMARY OF PROVISIONS RELATING TO T
Page 153 and 154:
TERMS AND CONDITIONS OF THE NOTES T
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In accordance with this Condition 2
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(g) (h) (i) (j) (k) (l) (m) (n) (o)
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(A) (B) (C) (D) (E) other than in r
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(xxi) (xxii) twenty-first, to pay a
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E = the aggregate Principal Amount
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Contract and the Corporate Services
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(a) (b) amounts (other than in resp
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The Trustee shall not be responsibl
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(e) the Rate of Interest for any In
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(i) (ii) in the event that the aggr
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amount of any Note Principal Paymen
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All of the B Noteholders and/or the
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Condition 8: Taxation All payments
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of such Noteholders of the relevant
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authorisation of any breach or prop
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No rights are conferred on any thir
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TERMS AND CONDITIONS OF THE MERCs T
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(i) (ii) (iii) a first fixed charge
Page 191 and 192:
provided by the Cross Currency Swap
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to do so by the holders of at least
Page 195 and 196:
Sunday on which banks are open for
Page 197 and 198:
such MERCs, the alteration of the m
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tax) which would not be suffered we
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TERMS AND CONDITIONS OF THE SUBORDI
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Subordinated Notes scheduled to the
Page 205 and 206:
and/or the Issuer Security Deed tog
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(vii) (viii) (ix) (x) (xi) (xii) (x
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Agreements, the Paying Agents, the
Page 211 and 212:
(xii) (xiii) twelfth, to pay pari p
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In giving any consent to the forego
Page 215 and 216:
LIBOR in effect for the Interest Pe
Page 217 and 218:
(a) Final Redemption of the Subordi
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close of business on the sixth Busi
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indemnified and/or secured to its s
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Trustee will not be responsible for
Page 225 and 226:
(b) Notwithstanding the other provi
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TERMS AND CONDITIONS OF THE R CERTI
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As security for the payment of all
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(B) (C) (D) amounts due and payable
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Mortgage Loans at the end of the pr
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(vii) seventh, to pay pro rata and
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(b) Restrictions on Activities (i)
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(c) Determination and Calculation b
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adjourned meeting, two or more pers
Page 243 and 244:
If Definitive R Certificates are is
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UNITED KINGDOM TAXATION The followi
Page 247 and 248:
EU DIRECTIVE ON THE TAXATION OF SAV
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or other person to which it sells t
Page 251 and 252:
GENERAL INFORMATION 1. The issue of
Page 253 and 254:
GLOSSARY £ .......................
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Cap Provider and Liquidity Facility
Page 257 and 258:
E Principal Deficiency.............
Page 259 and 260:
Interest Only Mortgage Loan........
Page 261 and 262:
Noteholders .......................
Page 263 and 264:
Receiptholders ....................
Page 265 and 266:
Subordinated Noteholders ..........
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ALBA 2007 â 1 plc - Irish Stock Exchange