Attentus CDO I Offering Circular - Irish Stock Exchange

greater than the liquidation value of the mortgaged property securing that mortgage loan. Other risks
facing a mortgage Real Estate Entity are interest rate fluctuations, that may affect the value of assets and
the net income to the Real Estate Entity, including the cost of using short-term repurchase programs to
finance loans and a decline in the market value of a mortgage Real Estate Entity, which could force such
Real Estate Entity to sell assets under adverse market conditions.
Equity Real Estate Entities are less likely to be affected by interest rate fluctuations than
mortgage Real Estate Entities and the nature of the underlying assets of an equity Real Estate Entity, i.e.,
investments in real property, may be considered more tangible than that of a mortgage Real Estate Entity.
Equity Real Estate Entities are more likely to be adversely affected by decreases in the value of the
underlying property it owns than mortgage Real Estate Entities.
Homebuilders are generally engaged in the design, construction and sale of homes. The builder
may also develop a portion or all of the lot on which the home is sited. The homebuilding industry is
highly fragmented and is a cyclical business affected by demographics, job creation, interest rates and
consumer confidence. Homebuilders have benefited from a strong multiyear housing expansion, during
which most of the macroeconomic drivers have been at historically favorable levels despite wavering
consumer confidence and lower employment numbers. The very low mortgage rates and perception of
housing as a good investment have offset occasional economic concerns.
Uninsured Losses. Real Estate Entities generally maintain comprehensive insurance on presently
owned and subsequently acquired real property assets, including liability, fire and extended coverage.
However, there are certain types of losses, generally of a catastrophic nature, such as earthquakes,
wildfires, hurricanes and floods or acts of war and terrorism, that may be uninsurable or not economically
insurable, as to which the Real Estate Entities properties are at risk in their particular locales. The
management of Real Estate Entity issuers uses their discretion in determining amounts, coverage limits
and deductibility provisions of insurance, with a view to requiring appropriate insurance on their
investments at a reasonable cost and on suitable terms. This may result in insurance coverage that in the
event of a substantial loss would not be sufficient to pay the full current market value or current
replacement cost of the lost investment. Inflation, changes in building codes, and ordinances,
environmental considerations, and other factors also might make it infeasible to use insurance proceeds to
replace a facility after it has been damaged or destroyed. Under such circumstances, the insurance
proceeds received by Real Estate Entities might not be adequate to restore its economic position with
respect to such property.
Environmental Liability. Under various federal, state, and local environmental laws, ordinances
and regulations, a current or previous owner or operator of real property may be liable for the costs of
removal or remediation of hazardous or toxic substances on, under or in such property. Such laws often
impose liability whether or not the owner or operator caused or knew of the presence of such hazardous or
toxic substances and whether or not the storage of such substances was in violation of a tenant’s lease. In
addition, the presence of hazardous or toxic substances, or the failure to remediate such property properly,
may adversely affect the owner’s ability to borrow using such real property as collateral. No assurance
can be given that one or more of the Real Estate Entities issuing Corresponding Debentures or
Subordinated Securities may not be presently liable or potentially liable for any such costs in connection
with real estate assets they presently own or subsequently acquire.
Americans with Disabilities Act. Under the Americans with Disabilities Act of 1990 (the
“ADA”), all public accommodations are required to meet certain federal requirements related to physical
access and use by disabled persons. In the event that any of the Real Estate Entities issuing
Corresponding Debentures or Subordinated Securities invest in or hold mortgages on real estate
properties subject to the ADA, a determination that any such properties are not in compliance with the
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