ALBA 2007 – 1 plc - Irish Stock Exchange

the calculation period applicable to the Interest Rate Swap Counterparty as set out in the Fixed-LIBOR
Swap Transaction confirmation).
Amounts payable under the Mortgage Loans are denominated in sterling while amounts payable under
the Euro Notes are denominated in euros. Further, the interest rate payable under the Euro Notes is
calculated by reference to EURIBOR. The Issuer will receive euros for the Euro Notes which will
have to be exchanged into sterling by the Cross Currency Swap Counterparty at a fixed rate of
exchange in which to pay the purchase price due under the Mortgage Sale Agreement and to purchase
and/or fund Further Advances and Ported Mortgage Loans. In order to hedge the currency risk and
interest rate risk arising by virtue of the Issuer receiving payments from the Interest Rate Swap
Counterparty (for so long as the Interest Rate Swap Agreement is in place) and otherwise from the
Mortgage Loans in sterling, and making payments due under the Euro Notes in euros, the Issuer will
on the Issue Date enter into the Cross Currency Swap Transaction with the Cross Currency Swap
Counterparty. Under the Cross Currency Swap Transaction the Issuer will make payments to the Cross
Currency Swap Counterparty in sterling based on LIBOR and the Cross Currency Swap Counterparty
will make payments to the Issuer in euros based on EURIBOR. Principal payments in sterling equal to
the amounts available to be applied in redemption of the Euro Notes will be made by the Issuer to the
Cross Currency Swap Counterparty and be converted into euro at the rate of GBP 0.6836842105 per
one euro for the A1b Notes.
In the event that the short-term, unsecured, unsubordinated and unguaranteed debt obligations of the
Interest Rate Swap Counterparty cease to be rated F1 by Fitch, A-1 by S&P or (for so long as the A
Notes and the B Notes are outstanding) P-1 (in the event that the Interest Rate Swap Counterparty has a
short-term rating) by Moody's, or its long-term unsecured, unsubordinated and unguaranteed debt
obligations cease to be rated at least A+ by Fitch or (for so long as the A Notes and the B Notes are
outstanding) A1 (in the event that the Interest Rate Swap Counterparty does not have a short-term
rating) or A2 (in the event that the Interest Rate Swap Counterparty has a short-term rating) by
Moody's (the "Required Interest Rate Swap Counterparty Ratings") and, in the event that the shortterm,
unsecured, unsubordinated and unguaranteed debt obligations of the Cross Currency Swap
Counterparty cease to be rated F1 by Fitch, A-1+ by S&P or (for so long as the A Notes and the B
Notes are outstanding) P-1 (in the event that the Cross Currency Swap Counterparty has a short-term
rating) by Moody's, or its long-term unsecured, unsubordinated and unguaranteed debt obligations
cease to be rated at least A+ by Fitch or (for so long as the A Notes and the B Notes are outstanding)
A1 (in the event that the Cross Currency Swap Counterparty does not have a short-term rating) or A2
(in the event that the Cross Currency Swap Counterparty ha s a short-term rating) by Moody's (the
"Required Cross Currency Swap Counterparty Ratings"), then the Issuer has the right (provided
that, if such termination would result in a payment becoming due to the Interest Rate Swap
Counterparty, it has been able to find a replacement interest rate swap counterparty to enter into
replacement interest rate swap transactions or, if such termination would result in a payment becoming
due to the Cross Currency Swap Counterparty, it has been able to find a replacement cross currency
swap counterparty to enter into a replacement cross currency swap transaction) to terminate the Interest
Rate Swap Transactions or the Cross Currency Swap Transaction (as applicable) unless the relevant
Swap Counterparty, within 30 days of such cessation, at its own cost either:
(i)
procures a third party with the Required Interest Rate Swap Counterparty Ratings or Required
Cross Currency Swap Counterparty Ratings (as applicable) of Fitch and/or S&P and/or
Moody's (as applicable) or who is otherwise approved by Fitch and/or S&P and/or Moody's (as
applicable) to become co-obligor or guarantor in respect of the Swap Provider's obligations
under the relevant Swap Agreement; or