VALLAURIS II CLO PLC - Irish Stock Exchange

Treatment of Interest Proceeds:
Accounts:
Interest Rate Hedge Agreement:
Limited Recourse:
Obligation at the time it was bought including any Purchased
Accrued Interest and any accrued interest or other sum that has,
under the terms of such Collateral Debt Obligation, been
capitalised as principal thereafter; and (ii) (a) the Class IV Par
Value Ratio is less than such ratio as at the Closing Date; or (b) the
aggregate of such Sale Proceeds is equal to or less than 100% of the
purchase price for such Collateral Debt Obligations). Such Sale
Proceeds designated as Interest Proceeds as provided above shall be
applied in accordance with the Priorities of Payment set out in
Condition 3(c)(i) (Application of Interest Proceeds).
The Interest Proceeds of Collateral Debt Obligations received will
be transferred to the Payment Account and, on each Payment Date,
applied subject to and in accordance with the Priorities of Payment
and the Conditions. In the event that the Interest Reinvestment
Test is not satisfied on the related Determination Date, Interest
Proceeds will on the next Payment Date be applied, subject to and
in accordance with the Priorities of Payment and the Conditions, in
the acquisition of Substitute Collateral Debt Obligations, subject to
satisfaction of the Reinvestment Criteria (each as described under
‘‘Description of the Portfolio’’ below), or in payment into the
Principal Account pending such reinvestment to the extent
necessary to cause the Interest Reinvestment Test to be met if
recalculated following such purchase or deposit, up to an amount
not exceeding 25 per cent. of the Interest Proceeds that would
otherwise be payable to the holders of the Subordinated Notes.
For the purposes of the Notes, the Issuer shall, prior to the Closing
Date, establish with the Account Bank the Collection Account,
which shall be sub-divided in the ledgers of the Account Bank into
the Principal Account and the Interest Account, the Expense
Reserve Account, the Additional Collateral Account, the Collateral
Enhancement Account, the Payment Account, the Synthetic
Collateral Account, the Retained Portion Account and the
Currency Accounts.
The Issuer may (depending on the composition of the Portfolio) on
or following the Closing Date enter into an interest rate hedge
transaction with the Interest Rate Hedge Counterparty (in
compliance with Rating Agency requirements) in order to protect
the Issuer against interest rate exposure in the event of changes in
the level of EURIBOR rates.
The obligations of the Issuer to pay amounts due and payable in
respect of the Notes and to the other Transaction Creditors at any
time shall be limited to the proceeds available at such time to make
such payment in accordance with the Conditions and the Trust
Deed. The Notes are limited recourse obligations of the Issuer
which are payable solely out of amounts received by or on behalf of
the Issuer in respect of the Collateral. Payments on the Notes both
prior to and following enforcement of the security over the
Collateral are subordinated to the prior payment of certain fees
and expenses of the Issuer. The net proceeds of the realisation of
the security over the Collateral following an Event of Default may
be insufficient to pay all amounts due to the Noteholders after
making payments to other creditors of the Issuer ranking prior to,
or pari passu with, the holders of the relevant Notes. In the event of
a shortfall in such proceeds, the Issuer will not be obliged to pay,
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