ROCKALL CLO B.V. - Irish Stock Exchange

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DESCRIPTION OF THE COLLATERAL MANAGER The information appearing in this section has been prepared by the Collateral Manager and has not been independently verified by the Issuer, the Placement Agent or any other party. None of the Issuer, the Placement Agent or any other party other than the Collateral Manager assumes any responsibility for the accuracy or completeness of such information. The Collateral Manager Babson Capital Europe Limited, an indirect subsidiary of Babson Capital Management LLC. (“Babson Capital”), will act as the Collateral Manager (the “Collateral Manager”). The Collateral Manager was incorporated in England and Wales on 4 January 1995 and its registered address is Almack House, 28 King Street, London SW1Y 6XA. The Collateral Manager is authorised and regulated by the Financial Services Authority inter alia to manage investments for non private customers. In May 2004, Babson Capital acquired Babson Capital Europe from Duke Street Capital group (“DSC”). On September 30th 2004, Babson Capital Europe changed its name from Duke Street Capital Debt Management Limited (“DSCDM”). Babson Capital is an investment management firm that was founded in 1940 and is registered with the Securities and Exchange Commission (“SEC”) as an investment adviser and is based in Cambridge and Springfield, Massachusetts. Babson Capital is an indirect majority owned subsidiary of Massachusetts Mutual Life Insurance Company (“MassMutual”). Babson Capital manages over $90 billion, primarily for institutional investors and high net worth individuals and offers a wide range of equity, fixed income and alternative investment products. Babson Capital also manages money for institutional and retail investors through subsidiary relationships with several mutual funds. Babson Capital is the Collateral Manager to MassMutual’s General Investment Account (“GIA”). In its capacity as Collateral Manager, Babson Capital Europe will offer asset selection and portfolio management services to the Issuer. Babson Capital Europe also acts as Collateral Manager for five other managed cashflow arbitrage CLOs: Duchess I CDO S.A., (€1bn), Duchess II CDO S.A., (€550m), Duchess III CDO S.A., (€450m), Duchess IV CLO B.V. (€525m) and Duchess V CLO B.V. (€500m). In addition it acts as Manager for Almack Mezzanine I LP. Investment Policy Babson Capital Europe will manage the investment of the proceeds from the Notes. The eligible collateral consists of debt securities issued or borrowed in leveraged transactions predominantly by UK and continental European companies and to a limited extent the United States of America. The focus will be on senior secured loans complemented by mezzanine or subordinated loans and other debt securities issued by companies with strong operations and solid capital structures. Investment Approval Procedure Investment decisions will be made by the Credit Committee, consisting of Roger Crandall, Ian Hazelton, David Wilmot, Zak Summerscale, Leona Campbell and Martin Horne. The quorum will be three with a provision to name one alternate if required. The Credit Committee will monitor credit, liquidity, currency and interest rate risk and compliance with the terms of the Security Trust Deed and Collateral Management Agreement. In addition, the Credit Committee will determine the Collateral Manager’s investment strategy on behalf of the Issuer and review the Portfolio on a quarterly basis. In practice, all members of the Collateral Manager’s team will be encouraged to contribute their views to the matters considered by the Credit Committee in order to ensure that the experience of all members of staff is included where relevant. New investment opportunities will be subject to appraisal in two contexts: ● ● First, the suitability of the proposed new investment in terms of the Portfolio, i.e. with reference to the required diversity score and weighted average rating, to currency and interest rate risk and to issuer and country concentration rules, etc. Second, to the cash flow and credit worthiness of the proposed obligor, taking into account both financial and commercial risks, industry and economic factors and strategic and financial structuring considerations. In addition, any asset sales will be subject to the review of the Credit Committee, taking into account the rationale for any sale and relative value considerations. Where the Collateral Manager, on behalf of the Issuer, is making an investment in the private debt markets, it will usually make use of reports from specialist advisers who performed due diligence on, for example, the historic and forecast financial performance of the proposed borrower, tax, pension and legal issues. The Collateral Manager will perform, inter alia, a detailed commercial assessment of the borrower, cash flow modelling and stress testing, industry and economic reviews, management meetings and site visits (where practical and necessary). - 141 -
There may be circumstances where debt investments are split between existing funds or transferred in whole or in part between funds. This may enable the funds managed by Babson Capital Europe to benefit from sufficiently large participations to maximise arrangement fees or meet the funds diversity/size requirements. No such transactions will be made unless the Collateral Manager believes they are in the best interests of the funds involved. If appropriate, third party or market valuations would be taken to validate transfer values. Collateral Manager Team Investment Team Ian Hazelton Chief Executive of Babson Capital Europe, started the business in 2000 joining from Royal Bank of Scotland Leveraged Finance. Ian was a leading player in setting up and building the Royal Bank’s specialist acquisition finance business from a standing start in 1993 to its current market leading position. As the business grew strongly in the mid to late 1990’s he was responsible for managing UK senior leveraged loan origination and credit control activities becoming Managing Director, Leveraged Finance in 1999. In this role he added responsibility for mezzanine as well as senior loan products for UK and Continental European leveraged transactions. Prior to joining the RBS, Ian spent eight years at 3i engaged in private equity investment. He qualified as an ACA with Deloitte Haskins & Sells in 1979 (FCA in 1991. He also spent five years in the engineering industry before joining 3i. Ian is responsible for the overall management of Babson Capital Europe and the Duchess Funds. Ian serves as Chairman of the Babson Capital Europe Credit Committee and the Mezzanine Credit Committee. Roger W. Crandall, Chairman of Babson Capital Management LLC, joined the firm in 1988 and has held several leadership positions including Head of Corporate Bond Management, Public Bond Trading and Institutional Fixed Income. In this position, Roger oversaw all corporate credit related investments, including public and private bonds, bank loans, European bank loans, mezzanine and private equity investments, and structured credit products. With over 17 years of experience, Roger is responsible for creating many innovative investment products, which have driven a significant part of the organization’s growth. Roger also serves as Executive Vice President and Chief Investment Officer of Massachusetts Mutual Life Insurance Company. He holds a B.A. in economics from the University of Vermont, an M.B.A. from the University of Pennsylvania’s Wharton School of Business, and he is a member of the CFA Institute. David Wilmot, Managing Director, Senior and Mezzanine Loans, joined Babson Capital Europe in November 2000 from Société Générale (“SG”) where he was head of the UK Leveraged Finance team. David made a major contribution to SG’s development into a leading arranger of senior and mezzanine debt in the European market He has extensive experience in European leveraged debt origination, negotiation and execution as well as portfolio control. He is an Associate of the Chartered Institute of Bankers and holds a BSc (Hons) in Banking and Finance from Loughborough University and a MBA from City University Business School. David is responsible for deal origination and credit control. David is a member of the Babson Capital Europe Credit Committee and the Mezzanine Credit Committee. Zak Summerscale, Managing Director, joined in 2001 from New Flag Asset Management where he was Portfolio Manager for a European High Yield Fund. The fund was short-listed by Global Investor Magazine for Investment Excellence in High Yield for 2000, with the fund outperforming the Merrill Lynch European High Yield Index (HP00) by over 1100 bps in 2000. Prior to New Flag, Zak worked for the United Bank of Kuwait (UBK). He joined UBK as a Distressed Debt Analyst, rising to Senior Portfolio Manager in charge of both the US and European High Yield Funds with a market value in excess of $500 million. He qualified as an ACA with Ernst and Young in 1996. Zak heads up portfolio management for all the Duchess funds, being responsible for the trading of senior and mezzanine loans and high yield bond securities, and is also a member of Babson Capital Europe Credit Committee. Adam Eifion-Jones, Managing Director, joined Babson Capital Europe in 2005 from the Royal Bank of Scotland ("RBS") where he worked in the Leveraged Finance business since 1994. Adam played a key role in the successful growth and development of this business, leading teams in the structuring and arranging of senior and mezzanine debt in addition to credit and portfolio management responsibilities. Most recently, since the beginning of 2002, Adam was Managing Director of the mid market Corporate and Structured Finance business within RBS, successfully developing and managing the mid market book with responsibility for origination, execution and portfolio control. Adam holds a BSc (Hons) in Finance and Economics and joined Babson Capital Europe to assist with the launch and development of the mezzanine business across the UK and Continental Europe. Adam is also a member of the Babson Capital Europe Mezzanine Credit Committee. Oliver Burgel, Managing Director, joined in 2000 from London Business School where he worked on private equity and leveraged finance research. Prior to joining London Business School, Oliver worked as Research Fellow at the Centre for European Economic Research in Mannheim, Germany. Oliver holds an MSc (Econ) from the London School of Economics and a Ph.D. from the University of Warwick. At Babson Capital Europe, Oliver is responsible for launching new funds, including fundraising, structuring and financial risk modelling. In addition, Oliver is analysing and transacting new investment opportunities. Leona Campbell, Director, joined in 2001 from Bank of Scotland Structured Finance where she spent her last three years working on medium to large leveraged buyouts in the UK and Europe. Leona qualified as a CA in - 142 -
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ROCKALL CLO B.V. (a private limited
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OFFER/INVITATION/DISTRIBUTION RESTR
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Each purchaser of VF Notes and Note
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NOTES AND NOTES HAVE NOT BEEN OFFER
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CONTENTS Page SUMMARY..............
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6 Holders of the Class E-1b Subordi
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Principal Payments on the Notes Red
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Payments (see the section of this O
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for each calendar week and (y) to t
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the Security Trustee shall, if dire
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with the Over-Collateralisation Tes
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ERISA Considerations Limited Recour
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1.7 Removal of Credit Enhancement T
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made until payment in full of all o
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inter-company guarantees such a pro
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orrower. A Selling Institution voti
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may have an associated Secured Hedg
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will be to enable the Custodian, on
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2.25 Disclosure of Portfolio The Is
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Investments to properly plan for ex
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3.12 Volatility of the Class E Subo
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sections of these Risk Factors head
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may also act as counterparty with r
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"Account-Holding Bank" means (a) in
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"Class C Notes" means the Initial I
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(c) (d) (e) (f) Noteholders represe
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"Exchange Date" means a day falling
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"Ledger" means the ledger maintaine
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"Permitted Short-Sale Exposure" mea
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the ratio of (i) the number of days
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accounts so as to effect payment of
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(b) "Unused Class D Notes Commitmen
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and, as the case may be, the Truste
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(c) (d) (iii) Ledger If: (xx) (yy)
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(ii) (iii) Class B Notes Blockage U
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4. Security made with respect to th
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entitled at any time to institute a
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interest rate hedging transactions
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paragraph (a)(vii) of Condition 10
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interest payable in respect of each
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Intercreditor Arrangements shall be
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Redemption Date") provided that Cla
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until all outstanding Senior Indebt
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on the Noteholders. Upon the expiry
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otherwise be due but for the imposi
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(b) (xii) (xiii) (xiv) Final judgme
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(c) (d) 12. Prescription Notes and
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Resolution represents of the aggreg
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(x) (xi) (xii) (xiii) (xiv) (xv) to
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Page 115 and 116: "Excluded Issuer Investments" (xi)
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Page 125 and 126: instrumentality thereof. “Pound S
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Page 139 and 140: FORM OF THE VF NOTES AND THE NOTES
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Page 147 and 148: RATINGS OF THE NOTES It is a condit
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Page 155 and 156: DESCRIPTION OF THE COLLATERAL ADMIN
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Page 161 and 162: DESCRIPTION OF THE TERMS AND CONDIT
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Page 165 and 166: "Interbank Rate Advance" means an A
Page 167 and 168: DESCRIPTION OF THE SECURITY AND INT
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Page 173 and 174: "Minor Trade" means a sale or other
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Page 177 and 178: any), provided that in relation to
Page 179 and 180: TAX CONSIDERATIONS General For purp
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Page 185 and 186: discussion below assumes that the I
Page 187 and 188: CERTAIN ERISA CONSIDERATIONS The U.
Page 189 and 190: meets all relevant legal requiremen
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Page 193 and 194: TRANSFER RESTRICTIONS Because of th
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GENERAL INFORMATION 1. Clearing Sys
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GLOSSARY € ......................
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Initial Issuance Class B Notes ....
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Short-Sale Contract ...............
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ROCKALL CLO B.V. - Irish Stock Exchange

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