MMCapS XVII Final Offering Circular - Irish Stock Exchange

OFFERING CIRCULAR 

U.S.$162,000,000 Class A-1 Floating Rate Notes Due 2035 


U.S.$33,000,000 Class B Floating Rate Notes Due 2035 

U.S.$35,475,000 Class C-1 Floating Rate Deferrable Interest Notes Due 2035 

U.S.$35,475,000 Class C-2 Fixed Rate Deferrable Interest Notes Due 2035 

U.S.$27,000,000 Subordinate Income Notes Due 2035 

MMCAPS FUNDING XVII, LTD. 

MMCAPS FUNDING XVII, CORP. 

The Notes listed above are being issued by MMCapS Funding XVII, Ltd. (the “Issuer”), a newly formed exempted company with limited liability 

established under the laws of the Cayman Islands, on a non-recourse basis as described herein. The Notes, other than the Income Notes, will be co-issued on a 

non-recourse basis by MMCapS Funding XVII, Corp., a newly formed Delaware corporation (the “Co-Issuer” and, together with the Issuer, the “Co-Issuers”). 

Interest on the Class A Notes, Class B Notes and Class C Notes and payments on the Income Notes are payable on March 1, June 1, September 1 and December 

1 of each year, beginning in December 2005. The Notes will mature on December 1, 2035, however, the Notes will be redeemed, subject to satisfaction of 

certain conditions described herein, on the Payment Date in December 2015 in connection with a Mandatory Auction Call. The Notes will receive payments of 

principal and are subject to optional redemption as described herein. The proceeds of the offering of the Notes and the upfront payment under a Hedge 

Agreement will be applied by the Issuer to purchase (a) capital securities issued by trust subsidiaries of bank holding companies, thrift holding companies or 

holding companies of other depository institutions (the “Bank Capital Securities”), (b) subordinated notes issued by banks, thrifts or other depository institutions 

(the “Bank Subordinated Notes”), (c) capital securities issued by trust subsidiaries of an insurance holding company and an insurance related company (the 

“Insurance Capital Securities” and, together with the Bank Capital Securities, the “Capital Securities”) and (d) a surplus note issued by an insurance company 

(the “Insurance Surplus Note” and, together with the Capital Securities and Bank Subordinated Notes, the “Collateral Debt Securities”) issued by 54 different 

issuers representing 47 different Affiliated Depository Institutions, two Bank Subordinated Note Issuers, two Affiliated Insurance Institutions and one Insurance 

Surplus Note Issuer (each as defined herein) and in an aggregate principal amount of U.S.$300,000,000 and to pay organizational expenses and the expenses of 

the issuance of the Notes. The portfolio of Collateral Debt Securities will be pledged to secure the Notes and will be required to satisfy certain criteria described 

herein as of the Closing Date. Sandler O’Neill Advisors, L.P. (“Sandler O’Neill Advisors” or the “Collateral Manager”), an Affiliate of Sandler O’Neill & 

Partners, L.P., will serve as collateral manager to the Issuer. 

It is a condition of issuance of the Notes that the Class A-1 Notes and the Class A-2 Notes be rated “Aaa” by Moody’s Investors Service, Inc. 

(“Moody’s”), “AAA” by Fitch, Inc. (“Fitch”) and “AAA” by Standard & Poor’s, a division of The McGraw-Hill Companies, Inc. (“S&P”), that the Class B 

Notes be rated at least “Aa2” by Moody’s, at least “AA” by Fitch and at least “AA” by S&P and that the Class C-1 Notes and the Class C-2 Notes be rated at 

least “A2” by Moody’s and at least “A” by Fitch. The Income Notes will not be rated. 

Application has been made to the Irish Financial Services Regulatory Authority, as competent authority under Directive 2003/71/EC (the “Prospectus 

Directive”), for the Prospectus (as defined herein) to be approved. Application has been made to the Irish Stock Exchange (the “ISE”) for the Notes to be 

admitted to the Official List and trading on its regulated market, but there can be no assurance that such listing will be granted. The issuance, sale and settlement 

of the Notes on the Closing Date is not conditioned on the listing of the Notes on the ISE. This Offering Circular constitutes a Prospectus (the “Prospectus”) for 

the purposes of the Prospectus Directive. 

Investing in the Notes involves risks. See “Risk Factors” beginning on page 19 and “Notice to Purchasers.” 

THE ASSETS OF THE ISSUER ARE THE SOLE SOURCE OF PAYMENTS ON THE NOTES. THE NOTES DO NOT REPRESENT AN 

INTEREST IN OR OBLIGATIONS OF, AND ARE NOT INSURED OR GUARANTEED BY, THE TRUSTEE, SANDLER O’NEILL & PARTNERS, L.P., 

GREENWICH CAPITAL MARKETS, INC., SANDLER O’NEILL ADVISORS, L.P. OR ANY OF THEIR RESPECTIVE AFFILIATES. 

THE NOTES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS 

AMENDED (THE “SECURITIES ACT”), OR UNDER THE SECURITIES LAWS OR INSURANCE SECURITIES LAWS OF ANY OTHER 

JURISDICTION, AND NONE OF THE ISSUER, THE CO-ISSUER OR THE TRUST ESTATE HAS BEEN OR WILL BE REGISTERED UNDER THE 

UNITED STATES INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE “INVESTMENT COMPANY ACT”). THE CLASS A NOTES, CLASS 

B NOTES AND CLASS C NOTES MAY NOT BE OFFERED, SOLD OR TRANSFERRED IN THE UNITED STATES OR TO “U.S. PERSONS” (AS 

DEFINED IN REGULATION S UNDER THE SECURITIES ACT AND WITHIN THE INTERPRETATIONS UNDER THE INVESTMENT COMPANY 

ACT) (“U.S. PERSONS”), EXCEPT TO “QUALIFIED PURCHASERS” (AS DEFINED IN SECTION 2(a)(51)(A) OF THE INVESTMENT COMPANY ACT 

AND THE RULES AND REGULATIONS THEREUNDER) (“QUALIFIED PURCHASERS”) THAT ARE ALSO EITHER (1) “QUALIFIED 

INSTITUTIONAL BUYERS” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (“QUALIFIED INSTITUTIONAL BUYERS”) OR (2) (IN 

THE CASE OF CERTIFICATED NOTES ONLY) INSTITUTIONAL “ACCREDITED INVESTORS” (AS DEFINED IN CLAUSE (1), (2), (3) OR (7) OF 

RULE 501(a) OF REGULATION D UNDER THE SECURITIES ACT), IN EACH CASE IN TRANSACTIONS EXEMPT FROM THE REGISTRATION 

REQUIREMENTS OF THE SECURITIES ACT. THE INCOME NOTES MAY NOT BE OFFERED, SOLD OR TRANSFERRED IN THE UNITED STATES 

OR TO U.S. PERSONS, EXCEPT TO QUALIFIED PURCHASERS THAT ARE ALSO EITHER QUALIFIED INSTITUTIONAL BUYERS PURCHASING 

IN RELIANCE ON RULE 144A (OR, IN THE CASE OF THE INITIAL SALE OF THE INCOME NOTES, IN ACCORDANCE WITH SECTION 4(2) OF 

THE SECURITIES ACT) OR TO “ACCREDITED INVESTORS” (AS DEFINED IN RULE 501(a) OF REGULATION D UNDER THE SECURITIES ACT), 

IN ACCORDANCE WITH SECTION 4(2) OF THE SECURITIES ACT. THE NOTES MAY BE SOLD TO NON-U.S. PERSONS IN TRANSACTIONS 

OUTSIDE THE UNITED STATES IN RELIANCE ON REGULATION S. FOR CERTAIN RESTRICTIONS ON RESALE, SEE “TRANSFER 

RESTRICTIONS.” 

The Class A-1 Notes, the Class A-2 Notes, the Class B Notes, the Class C-1 Notes and the Class C-2 Notes are offered by Sandler O’Neill & 

Partners, L.P. and Greenwich Capital Markets, Inc. (in such capacity, the “Initial Purchasers”), and the Income Notes are offered by the Issuer through Sandler 

O’Neill & Partners, L.P. and Greenwich Capital Markets, Inc. (in such capacity, the “Placement Agents”), to prospective purchasers from time to time in 

negotiated transactions at varying prices to be determined in each case at the time of sale. It is expected that delivery of the Notes will be made on or about 

September 8, 2005 (the “Closing Date”), against payment in immediately available funds. 

RBS Greenwich Capital 

September 8, 2005 

Sandler O’Neill & Partners, L.P.

You should rely only on the information contained in this Offering Circular. The Co-Issuers have 

not authorized anyone to provide you with different information. None of the Co-Issuers, the Initial 

Purchasers or the Placement Agents are making an offer of the Notes in any jurisdiction where the offer is 

not permitted. You should not assume that the information contained in this Offering Circular is accurate as 

of any date other than the date on the front of this Offering Circular. 

TABLE OF CONTENTS 

SUMMARY ..........................................................................................................................................................................1 

RISK FACTORS.................................................................................................................................................................19 

THE ISSUER AND THE CO-ISSUER.............................................................................................................................37 

DESCRIPTION OF THE NOTES.....................................................................................................................................39 

SECURITY FOR THE NOTES.........................................................................................................................................55 

LEGAL STRUCTURE.......................................................................................................................................................89 

DESCRIPTION OF THE HEDGE AGREEMENTS .......................................................................................................98 

THE COLLATERAL MANAGER .................................................................................................................................100 

THE COLLATERAL MANAGEMENT AGREEMENT..............................................................................................102 

THE COLLATERAL ADMINISTRATION AGREEMENT........................................................................................107 

MATURITY, PREPAYMENT AND YIELD CONSIDERATIONS ...........................................................................107 

TRANSFER RESTRICTIONS ........................................................................................................................................109 

INCOME TAX CONSIDERATIONS.............................................................................................................................121 

CERTAIN ERISA CONSIDERATIONS........................................................................................................................130 

CERTAIN LEGAL INVESTMENT CONSIDERATIONS ..........................................................................................132 

RATINGS..........................................................................................................................................................................133 

USE OF PROCEEDS .......................................................................................................................................................133 

PLAN OF DISTRIBUTION.............................................................................................................................................133 

LISTING AND GENERAL INFORMATION...............................................................................................................137 

CERTAIN LEGAL MATTERS.......................................................................................................................................138 

ANNEX A GLOSSARY OF CERTAIN DEFINED TERMS......................................................................................A-1 

ANNEX B INDEX OF CERTAIN DEFINED TERMS ...............................................................................................B-1 

Page 

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_____________________ 

This Offering Circular has been prepared by the Co-Issuers solely for use in connection with the 

proposed offering of the Notes described herein. This Offering Circular is personal to each offeree and does 

not constitute an offer to any other person or to the public generally to subscribe for or otherwise acquire the 

Notes. Distribution of this Offering Circular to any other person other than the offeree and any person 

retained to advise such offeree with respect to its purchase is unauthorized, and any disclosure of any of its 

contents, without the prior written consent of the Co-Issuers, is prohibited. Each prospective investor, by 

accepting delivery of this Offering Circular, agrees to the foregoing and to make no photocopies of this 

Offering Circular or any documents referred to herein. 

Notwithstanding any other express or implied agreement to the contrary, the Issuer, the Collateral 

Manager, the Initial Purchasers, the Placement Agents and each recipient hereof agree that each of them and 

each of their employees, representatives, and other agents may disclose to any and all persons, without 

limitation of any kind, the tax treatment and tax structure of the Issuer and the issuance of the Notes and all 

materials of any kind that are provided to the prospective investor relating to such tax treatment and tax 

structure (as such terms are defined in Treasury Regulation section 1.6011-4), including opinions or tax 

analyses. This authorization of tax disclosure is retroactively effective to the commencement of discussions 

with the investors regarding the transactions contemplated herein. 

The Initial Purchasers, the Placement Agents and, except with respect to the Section herein titled 

“The Collateral Manager,” the Collateral Manager make no representation or warranty, express or implied, 

as to the accuracy or completeness of the information contained in this Offering Circular. Nothing contained 

in this Offering Circular is, or shall be relied upon as, a promise or representation by the Initial Purchasers, 

the Placement Agents or the Collateral Manager as to the past or future. The Initial Purchasers, the 

Placement Agents and, except with respect to the Section herein titled “The Collateral Manager,” the 

Collateral Manager have not independently verified any of the information contained herein (financial, legal 

or otherwise), and they assume no responsibility for the accuracy or completeness of any such information. 

The information appearing in the section herein titled “The Collateral Manager” has been prepared 

by the Collateral Manager and has not been independently verified by the Initial Purchasers, the Placement 

Agents or the Co-Issuers. None of the Initial Purchasers, the Placement Agents or the Co-Issuers assume any 

responsibility for the accuracy, completeness or applicability of such information, but the Co-Issuers assume 

responsibility for accurately reproducing such information in this Offering Circular. 

None of the Securities and Exchange Commission, any state securities or insurance commission or 

any other U.S. regulatory authority has approved or disapproved the Notes nor have any of the foregoing 

authorities passed upon or endorsed the merits of this offering or the accuracy or adequacy of this Offering 

Circular. Any representation to the contrary is a criminal offense. 

In making an investment decision, prospective investors must rely on their own examination of the 

Co-Issuers and the terms of the offering, including the merits and risks involved. Prospective investors 

should not construe anything in this Offering Circular as legal, business, regulatory, accounting or tax advice. 

Each prospective investor should consult its own advisors as needed to make its investment decision and to 

determine whether it is legally permitted to purchase the Notes under applicable legal investment or similar 

laws or regulations. Investors should be aware that they may be required to bear the financial risks of an 

investment in the Notes for an indefinite period of time. 

This Offering Circular contains summaries believed to be accurate with respect to certain 

documents, but reference is made to the actual documents for complete information. All such summaries are 

qualified in their entirety by such reference. Copies of documents referred to herein will be made available to 

prospective investors upon request to the Co-Issuers, the Initial Purchasers or the Placement Agents. 

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NOTICE TO PURCHASERS 

THE NOTES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES 

ACT, THE INVESTMENT COMPANY ACT, THE SECURITIES LAWS OR INSURANCE SECURITIES LAWS 

OF ANY STATE OF THE UNITED STATES OR THE SECURITIES LAWS OF ANY OTHER JURISDICTION 

AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS AN EXEMPTION FROM 

REGISTRATION UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS IS 

AVAILABLE. THE NOTES ARE ALSO SUBJECT TO CERTAIN OTHER RESTRICTIONS ON TRANSFER 

DESCRIBED HEREIN. PROSPECTIVE PURCHASERS OF THE NOTES SHOULD PROCEED ON THE 

ASSUMPTION THAT THEY MUST HOLD THEIR INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. 

THE NOTES DO NOT REPRESENT AN INTEREST IN OR OBLIGATION OF, AND ARE NOT 

INSURED OR GUARANTEED BY, THE INITIAL PURCHASERS, THE PLACEMENT AGENTS, THE 

COLLATERAL MANAGER, THE TRUSTEE, THE SHARE TRUSTEE, THE ADMINISTRATOR, ANY 

COLLATERAL DEBT SECURITIES ISSUER, AFFILIATED DEPOSITORY INSTITUTION OR AFFILIATED 

INSURANCE INSTITUTION OR THEIR RESPECTIVE DIRECTORS, OFFICERS, PARTNERS OR 

OFFICIALS OR ANY OF THEIR RESPECTIVE AFFILIATES OR ANY AFFILIATES OF THE CO-ISSUERS. 

THE CLASS A NOTES, CLASS B NOTES AND CLASS C NOTES ARE NON-RECOURSE 

OBLIGATIONS OF THE CO-ISSUERS AND THE INCOME NOTES ARE NON-RECOURSE OBLIGATIONS 

OF THE ISSUER ONLY. PRINCIPAL OF, INTEREST ON AND OTHER AMOUNTS PAYABLE IN RESPECT 

OF THE NOTES WILL BE PAID SOLELY FROM AND TO THE EXTENT OF THE AVAILABLE PROCEEDS 

FROM THE COLLECTIONS ON THE COLLATERAL DEBT SECURITIES PLEDGED TO SECURE THE 

NOTES AND PAYMENTS RECEIVED UNDER ANY HEDGE AGREEMENTS, WHICH ARE THE ONLY 

SOURCES OF PAYMENT OF AMOUNTS PAYABLE IN RESPECT OF THE NOTES. 

FOR THESE REASONS, AMONG OTHERS, AN INVESTMENT IN THE NOTES IS NOT SUITABLE 

FOR ALL INVESTORS AND IS APPROPRIATE ONLY FOR AN INVESTOR CAPABLE OF (A) ANALYZING 

AND ASSESSING THE RISKS ASSOCIATED WITH DEFAULTS, LOSSES AND RECOVERIES ON, AND 

OTHER CHARACTERISTICS OF, INSTRUMENTS SUCH AS THE COLLATERAL DEBT SECURITIES, AND 

(B) BEARING SUCH RISKS AND THE FINANCIAL CONSEQUENCES THEREOF AS THEY RELATE TO 

AN INVESTMENT IN THE NOTES. 

NEW HAMPSHIRE RESIDENTS ONLY: NEITHER THE FACT THAT A REGISTRATION 

STATEMENT OR AN APPLICATION FOR A LICENSE HAS BEEN FILED UNDER CHAPTER 421-B 

OF THE NEW HAMPSHIRE REVISED STATUTES WITH THE STATE OF NEW HAMPSHIRE NOR 

THE FACT THAT A SECURITY IS EFFECTIVELY REGISTERED OR A PERSON IS LICENSED IN 

THE STATE OF NEW HAMPSHIRE CONSTITUTES A FINDING BY THE SECRETARY OF STATE 

THAT ANY DOCUMENT FILED UNDER RSA 421-B IS TRUE, COMPLETE AND NOT MISLEADING. 

NEITHER ANY SUCH FACT NOR THE FACT THAT AN EXEMPTION OR EXCEPTION IS 

AVAILABLE FOR A SECURITY OR A TRANSACTION MEANS THAT THE SECRETARY OF STATE 

HAS PASSED IN ANY WAY UPON THE MERITS OR QUALIFICATIONS OF OR RECOMMENDED OR 

GIVEN APPROVAL TO, ANY PERSON, SECURITY OR TRANSACTION. IT IS UNLAWFUL TO 

MAKE, OR CAUSE TO BE MADE, TO ANY PROSPECTIVE PURCHASER, CUSTOMER, OR CLIENT 

ANY REPRESENTATION INCONSISTENT WITH THE PROVISIONS OF THIS PARAGRAPH. 

EXCEPT AS SET FORTH IN THIS OFFERING CIRCULAR, NO PERSON IS AUTHORIZED TO GIVE 

ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS OFFERING 

CIRCULAR AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE 

RELIED UPON. THIS OFFERING CIRCULAR DOES NOT CONSTITUTE AN OFFER TO SELL OR THE 

SOLICITATION OF AN OFFER TO BUY ANY OF THE NOTES OFFERED HEREBY IN ANY JURISDICTION 

TO ANY PERSON TO WHICH IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION OR TO 

ANY PERSON WHO HAS NOT RECEIVED A COPY OF EACH CURRENT AMENDMENT OR 

SUPPLEMENT HERETO, IF ANY. 

iv

THE CO-ISSUERS HAVE TAKEN REASONABLE CARE TO ENSURE THAT FACTS STATED IN 

THIS OFFERING CIRCULAR ARE TRUE AND ACCURATE IN ALL MATERIAL RESPECTS AND THAT 

THERE HAVE NOT BEEN OMITTED MATERIAL FACTS THE OMISSION OF WHICH WOULD MAKE 

MISLEADING ANY STATEMENTS OF FACT OR OPINION HEREIN. THE CO-ISSUERS ACCEPT 

RESPONSIBILITY FOR THE INFORMATION CONTAINED IN THIS OFFERING CIRCULAR, EXCEPT FOR 

THE INFORMATION APPEARING IN THE SECTION TITLED “THE COLLATERAL MANAGER,” WHICH 

HAS BEEN PREPARED BY THE COLLATERAL MANAGER AND AS TO WHICH INFORMATION THE CO- 

ISSUERS ASSUME NO RESPONSIBILITY OTHER THAN FOR ACCURATELY REPRODUCING SUCH 

INFORMATION IN THIS OFFERING CIRCULAR. TO THE BEST KNOWLEDGE AND BELIEF OF THE CO- 

ISSUERS THE INFORMATION CONTAINED IN THIS OFFERING CIRCULAR IS IN ACCORDANCE WITH 

THE FACTS AND DOES NOT OMIT ANYTHING LIKELY TO AFFECT THE IMPORT OF SUCH 

INFORMATION. 

NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, IS MADE BY THE INITIAL 

PURCHASERS, THE PLACEMENT AGENTS OR ANY OF THEIR RESPECTIVE REPRESENTATIVES OR 

AFFILIATES AS TO THE ACCURACY OR COMPLETENESS OF THE INFORMATION IN THIS OFFERING 

CIRCULAR 

THE DELIVERY OF THIS OFFERING CIRCULAR AT ANY TIME DOES NOT IMPLY THAT THE 

INFORMATION HEREIN IS CORRECT AT ANY TIME SUBSEQUENT TO ITS DATE. 

THIS OFFERING CIRCULAR IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT 

INTENDED TO BE RELIED UPON ALONE AS THE BASIS FOR AN INVESTMENT DECISION. IN 

MAKING AN INVESTMENT DECISION, PROSPECTIVE INVESTORS MUST RELY ON THEIR OWN 

EXAMINATION OF THE CO-ISSUERS AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS 

AND RISKS INVOLVED AND MUST NOT RELY UPON INFORMATION PROVIDED BY OR 

STATEMENTS MADE BY THE INITIAL PURCHASERS, THE PLACEMENT AGENTS, THE COLLATERAL 

MANAGER OR ANY OF THEIR RESPECTIVE AFFILIATES. INVESTORS SHOULD BE AWARE THAT 

THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF AN INVESTMENT IN THE NOTES FOR 

AN INDEFINITE PERIOD OF TIME. REPRESENTATIVES OF THE INITIAL PURCHASERS AND THE 

PLACEMENT AGENTS WILL BE AVAILABLE TO ANSWER QUESTIONS CONCERNING THE CO- 

ISSUERS, THE NOTES AND THE COLLATERAL DEBT SECURITIES AND WILL, UPON REQUEST, MAKE 

AVAILABLE SUCH OTHER INFORMATION AS INVESTORS MAY REASONABLY REQUEST. 

THIS OFFERING CIRCULAR IS NOT INTENDED TO FURNISH LEGAL, REGULATORY, TAX, 

ACCOUNTING, INVESTMENT OR OTHER ADVICE TO ANY PROSPECTIVE PURCHASER OF THE 

NOTES. THIS OFFERING CIRCULAR SHOULD BE REVIEWED BY EACH PROSPECTIVE PURCHASER 

AND ITS LEGAL, REGULATORY, TAX, ACCOUNTING, INVESTMENT AND OTHER ADVISORS. 

EACH INITIAL INVESTOR IN THE NOTES WILL BE REQUIRED TO FURNISH, OR DEEMED TO 

MAKE, CERTAIN PURCHASER REPRESENTATIONS IN THE FORM REQUIRED BY THE INITIAL 

PURCHASERS AND THE PLACEMENT AGENTS. IN ADDITION, THE NOTES WILL BEAR RESTRICTIVE 

LEGENDS AND WILL BE SUBJECT TO RESTRICTIONS ON TRANSFER AS DESCRIBED HEREIN, 

INCLUDING THE REQUIREMENT THAT EACH SUBSEQUENT TRANSFEREE OF CERTIFICATED NOTES 

FURNISH A REPRESENTATION LETTER IN THE FORM PRESCRIBED BY THE INDENTURE. 

BENEFICIAL INTERESTS IN THE RULE 144A GLOBAL NOTES, TEMPORARY REGULATION S GLOBAL 

NOTES AND REGULATION S GLOBAL NOTES WILL ALSO BE SUBJECT TO RESTRICTIONS ON 

TRANSFER AS DESCRIBED HEREIN. ANY RESALE OR OTHER TRANSFER, OR ATTEMPTED RESALE 

OR OTHER ATTEMPTED TRANSFER, OF NOTES THAT IS NOT MADE IN COMPLIANCE WITH THE 

APPLICABLE TRANSFER RESTRICTIONS WILL BE VOID, AND THE ISSUER SHALL HAVE THE RIGHT 

TO REQUIRE A U.S. PERSON THAT WAS NOT BOTH A QUALIFIED INSTITUTIONAL BUYER AND A 

QUALIFIED PURCHASER (A “QIB/QP”), AT THE TIME OF ITS ACQUISITION OF AN INTEREST IN A 

GLOBAL NOTE, TO CAUSE ITS INTEREST IN SUCH NOTE TO BE SOLD TO A PERSON THAT IS A 

QIB/QP. SEE “TRANSFER RESTRICTIONS.” 

v

INVESTORS WHOSE INVESTMENT AUTHORITY IS SUBJECT TO LEGAL RESTRICTIONS 

SHOULD CONSULT THEIR LEGAL ADVISORS TO DETERMINE WHETHER AND TO WHAT EXTENT 

THE NOTES CONSTITUTE LEGAL INVESTMENTS FOR THEM. 

BY ITS PURCHASE OF GLOBAL CLASS A NOTES, GLOBAL CLASS B NOTES OR GLOBAL 

CLASS C NOTES, EACH PURCHASER THEREOF WILL BE DEEMED TO HAVE REPRESENTED AND 

WARRANTED, AND EACH PURCHASER OF CERTIFICATED CLASS A NOTES, CERTIFICATED CLASS B 

NOTES, CERTIFICATED CLASS C NOTES OR INCOME NOTES WILL BE REQUIRED TO REPRESENT 

AND WARRANT, ON EACH DAY FROM THE DATE ON WHICH IT ACQUIRES ITS INTEREST IN SUCH 

NOTE THROUGH AND INCLUDING THE DATE ON WHICH IT DISPOSES OF ITS INTEREST IN SUCH 

NOTE, EITHER THAT (A) IT IS NOT AN ERISA PLAN OR OTHER PLAN OR ARRANGEMENT SUBJECT 

TO SECTION 4975 OF THE CODE, AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE THE ASSETS 

OF ANY SUCH ERISA PLAN OR OTHER PLAN BY REASON OF DEPARTMENT OF LABOR 

REGULATION SECTION 2510.3-101 OR OTHERWISE, OR A GOVERNMENTAL OR OTHER PLAN WHICH 

IS SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW (“SIMILAR LAW”) THAT IS SUBSTANTIALLY 

SIMILAR TO THE PROVISIONS OF SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE OR (B) ITS 

PURCHASE, HOLDING AND DISPOSITION (1) OF A CLASS A NOTE, CLASS B NOTE OR CLASS C NOTE 

WILL SATISFY THE REQUIREMENTS FOR RELIEF UNDER PROHIBITED TRANSACTION CLASS 

EXEMPTION 84-14, 90-1, 91-38, 95-60, 96-23 OR A SIMILAR EXEMPTION OR, IN THE CASE OF A PLAN 

SUBJECT TO SIMILAR LAW, WILL NOT RESULT IN A NONEXEMPT VIOLATION OF SUCH SIMILAR 

LAW, OR (2) OF AN INCOME NOTE WILL NOT RESULT IN A PROHIBITED TRANSACTION UNDER 

SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE (OR, IN THE CASE OF A PLAN SUBJECT TO 

SIMILAR LAW, UNDER SUCH SIMILAR LAW) FOR WHICH AN EXEMPTION IS NOT AVAILABLE, ALL 

THE CONDITIONS OF WHICH ARE SATISFIED. 

EXCEPT TO THE LIMITED EXTENT AND UPON THE SATISFACTION OF THE CONDITIONS 

DESCRIBED UNDER “CERTAIN ERISA CONSIDERATIONS”, THE INCOME NOTES MAY NOT BE 

OFFERED, SOLD, PLEDGED, OR OTHERWISE TRANSFERRED TO ANY PERSON THAT IS EITHER AN 

EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF SECTION 3(3) OF ERISA (WHETHER OR NOT 

SUBJECT TO ERISA, AND INCLUDING, WITHOUT LIMITATION, FOREIGN OR GOVERNMENTAL 

PLANS), A “PLAN” DESCRIBED IN SECTION 4975(e)(1) OF THE CODE, OR AN ENTITY WHOSE 

UNDERLYING ASSETS INCLUDE PLAN ASSETS OF ANY OF THE FOREGOING BY REASON OF A 

PLAN’S INVESTMENT IN SUCH ENTITY OR OTHERWISE UNDER ERISA (ANY SUCH PERSON, A 

“BENEFIT PLAN INVESTOR”). SATISFACTION OF THESE CONDITIONS MAY LIMIT TRANSFERS OF 

INCOME NOTES TO A PERSON, OTHER THAN A BENEFIT PLAN INVESTOR, WHO HAS 

DISCRETIONARY AUTHORITY OR CONTROL WITH RESPECT TO THE ASSETS OF THE ISSUER, OR 

PROVIDES INVESTMENT ADVICE TO THE ISSUER FOR A FEE (DIRECT OR INDIRECT) WITH RESPECT 

TO THE ASSETS OF THE ISSUER, OR AN AFFILIATE OF ANY SUCH PERSON WITHIN THE MEANING 

OF 29 C.F.R. § 2510.3-101(f)(3). 

THIS OFFERING CIRCULAR IS ONLY BEING DISTRIBUTED TO AND IS ONLY DIRECTED (i) AT 

PERSONS WHO ARE OUTSIDE THE UNITED KINGDOM, OR (ii) TO INVESTMENT PROFESSIONALS 

FALLING WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 

(FINANCIAL PROMOTION) ORDER 2005 (THE “ORDER”), OR (iii) TO HIGH NET WORTH ENTITIES, OR 

OTHER PERSONS TO WHOM IT MAY LAWFULLY BE COMMUNICATED, FALLING WITHIN ARTICLE 

49(2) OF THE ORDER (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS “RELEVANT 

PERSONS”). THE NOTES ARE ONLY AVAILABLE TO, AND ANY INVITATION, OFFER OR 

AGREEMENT TO SUBSCRIBE, PURCHASE OR OTHERWISE ACQUIRE SUCH NOTES WILL BE 

ENGAGED IN ONLY WITH, RELEVANT PERSONS. ANY PERSON WHO IS NOT A RELEVANT PERSON 

SHOULD NOT ACT OR RELY ON THIS OFFERING CIRCULAR OR ANY OF ITS CONTENTS. 

NOTICE TO RESIDENTS OF AUSTRALIA 

NO PROSPECTUS, DISCLOSURE DOCUMENT, OFFERING MATERIAL OR ADVERTISEMENT IN 

RELATION TO THE NOTES HAS BEEN LODGED WITH THE AUSTRALIAN SECURITIES AND 

INVESTMENTS COMMISSION OR THE AUSTRALIAN STOCK EXCHANGE LIMITED. ACCORDINGLY, A 

vi

PERSON MAY NOT (A) MAKE, OFFER OR INVITE APPLICATIONS FOR THE ISSUE, SALE OR 

PURCHASE OF THE NOTES WITHIN, TO OR FROM AUSTRALIA (INCLUDING AN OFFER OR 

INVITATION WHICH IS RECEIVED BY A PERSON IN AUSTRALIA) OR (B) DISTRIBUTE OR PUBLISH 

THIS OFFERING CIRCULAR OR ANY OTHER PROSPECTUS, DISCLOSURE DOCUMENT, OFFERING 

MATERIAL OR ADVERTISEMENT RELATING TO THE NOTES IN AUSTRALIA, UNLESS (I) THE 

MINIMUM AGGREGATE CONSIDERATION PAYABLE BY EACH OFFEREE IS THE U.S. DOLLAR 

EQUIVALENT OF AT LEAST A$500,000 (DISREGARDING MONEYS LENT BY THE OFFEROR OR ITS 

ASSOCIATES) OR THE OFFER OTHERWISE DOES NOT REQUIRE DISCLOSURE TO INVESTORS IN 

ACCORDANCE WITH PART 6D.2 OF THE CORPORATIONS ACT 2001 (CWLTH) OF AUSTRALIA, AND 

(II) SUCH ACTION COMPLIES WITH ALL APPLICABLE LAWS AND REGULATIONS. 

SANDLER O’NEILL & PARTNERS, L.P. IS NOT LICENSED OR AUTHORIZED TO PROVIDE 

INVESTMENT SERVICES (INCLUDING BUT NOT LIMITED TO PROVIDING INVESTMENT ADVICE), IN 

OR FROM AUSTRALIA IN CONNECTION WITH THIS OFFER. SANDLER O’NEILL & PARTNERS, L.P. IS 

UNABLE TO ADVISE AUSTRALIAN INVESTORS ON ANY ASPECT OF THIS OFFER. 

NOTICE TO RESIDENTS OF AUSTRIA 

THE NOTES WILL BE OFFERED, SOLICITED, SOLD, DISTRIBUTED OR ADVERTISED IN 

AUSTRIA ONLY TO A LIMITED NUMBER OF NOT MORE THAN 250 INVESTORS, EACH OF WHICH 

HAS BEEN IDENTIFIED BY ITS NAME PRIOR TO DISPATCHING THE OFFER, SOLICITATION FOR THE 

OFFER, SALE, DISTRIBUTION OR ADVERTISEMENT, AND IN ALL CASES ONLY IN CIRCUMSTANCES 

WHERE NO PUBLIC OFFERING OF THE NOTES IS CONSTITUTED IN AUSTRIA WITHIN THE 

DEFINITION OF THE AUSTRIAN CAPITAL MARKET ACT (THE “ACMA”), AS AMENDED, OR ANY 

OTHER LAW AND REGULATION IN AUSTRIA APPLICABLE TO THE OFFER AND THE SALE OF THE 

NOTES IN AUSTRIA, OR WHERE AN EXEMPTION FROM THE DUTY TO PUBLISH A PROSPECTUS 

UNDER THE ACMA IS APPLICABLE. NEITHER THIS OFFERING CIRCULAR NOR ANY OTHER 

OFFERING MATERIAL OR INFORMATION RELATING TO THE NOTES IS A PROSPECTUS WITHIN THE 

MEANING OF THE ACMA NOR A PUBLIC OFFERING OR A PUBLIC SOLICITATION TO SUBSCRIBE 

FOR OR PURCHASE THE NOTES OR A PUBLIC INVITATION TO MAKE AN OFFER FOR THE NOTES OR 

ANY ADVERTISEMENT OR MARKETING WHICH MAY BE CONSIDERED EQUIVALENT TO A PUBLIC 

OFFER OR SOLICITATION IN AUSTRIA PURSUANT TO THE ACMA. NO PROSPECTUS HAS BEEN OR 

WILL BE PUBLISHED PURSUANT TO THE ACMA. THE NOTES HAVE NOT BEEN AND WILL NOT BE 

REGISTERED OR OTHERWISE AUTHORISED FOR PUBLIC OFFER IN AUSTRIA UNDER THE ACMA OR 

OTHERWISE. 



OR FROM AUSTRIA IN CONNECTION WITH THIS OFFER. SANDLER O’NEILL & PARTNERS, L.P. IS 

UNABLE TO ADVISE AUSTRIAN INVESTORS ON ANY ASPECT OF THIS OFFER. 

NOTICE TO RESIDENTS OF BAHRAIN 

NO PUBLIC OFFER OF THE NOTES WILL BE MADE IN BAHRAIN AND NO APPROVALS HAVE 

BEEN SOUGHT FROM ANY GOVERNMENTAL AUTHORITY OF OR IN BAHRAIN. NONE OF THE CO- 

ISSUERS, THE INITIAL PURCHASERS OR THE PLACEMENT AGENTS IS PERMITTED TO MAKE ANY 

INVITATION TO THE PUBLIC IN THE STATE OF BAHRAIN TO SUBSCRIBE FOR THE NOTES AND THIS 

OFFERING CIRCULAR MAY NOT BE ISSUED, PASSED TO, OR MADE AVAILABLE TO MEMBERS OF 

THE PUBLIC IN BAHRAIN GENERALLY. 



OR FROM BAHRAIN IN CONNECTION WITH THIS OFFER. SANDLER O’NEILL & PARTNERS, L.P. IS 

UNABLE TO ADVISE BAHRAINI INVESTORS ON ANY ASPECT OF THIS OFFER. 

vii

NOTICE TO RESIDENTS OF BELGIUM 

THE OFFERING IS EXCLUSIVELY CONDUCTED UNDER APPLICABLE PRIVATE PLACEMENT 

EXEMPTIONS AND THEREFORE IT HAS NOT BEEN AND WILL NOT BE NOTIFIED TO, AND THIS 

OFFERING CIRCULAR OR ANY OTHER OFFERING MATERIAL RELATING TO THE NOTES HAS NOT 

BEEN AND WILL NOT BE APPROVED BY, THE BELGIAN BANKING, FINANCE AND INSURANCE 

COMMISSION (“COMMISSION BANCAIRE, FINANCIÈRE ET DES ASSURANCES/COMMISSIE VOOR 

HET BANK-, FINANCIE- EN ASSURANTIEWEZEN”). ANY REPRESENTATION TO THE CONTRARY IS 

UNLAWFUL. NO NOTES WILL BE OFFERED, SOLD, RESOLD, TRANSFERRED OR DELIVERED, 

DIRECTLY OR INDIRECTLY, AND THIS OFFERING CIRCULAR OR ANY OTHER MATERIAL RELATING 

TO THE NOTES WILL NOT BE DISTRIBUTED OR PUBLISHED, TO ANY INDIVIDUAL OR LEGAL 

ENTITY IN BELGIUM OTHER THAN: (I) INVESTORS REQUIRED TO INVEST A MINIMUM OF EURO 

250,000 (PER INVESTOR AND PER TRANSACTION); AND (II) INSTITUTIONAL INVESTORS AS 

DEFINED IN ARTICLE 3, 2°, OF THE BELGIAN ROYAL DECREE OF 7 JULY 1999 ON THE PUBLIC 

CHARACTER OF FINANCIAL TRANSACTIONS, ACTING FOR THEIR OWN ACCOUNT. THIS OFFERING 

CIRCULAR HAS BEEN ISSUED ONLY FOR THE PERSONAL USE OF THE ABOVE QUALIFIED 

INVESTORS AND EXCLUSIVELY FOR THE PURPOSE OF THE OFFERING OF THE NOTES. 

ACCORDINGLY, THE INFORMATION CONTAINED THEREIN MAY NOT BE REPRODUCED OR USED 

FOR ANY OTHER PURPOSE NOR DISCLOSED TO ANY OTHER PERSON IN BELGIUM. ANY ACTION 

CONTRARY TO THESE RESTRICTIONS WILL CAUSE THE RECIPIENT AND THE ISSUER TO BE IN 

VIOLATION OF THE BELGIAN SECURITIES LAWS. 



OR FROM BELGIUM IN CONNECTION WITH THIS OFFER. SANDLER O’NEILL & PARTNERS, L.P. IS 

UNABLE TO ADVISE BELGIAN INVESTORS ON ANY ASPECT OF THIS OFFER. 

NOTICE TO MEMBERS OF THE PUBLIC IN THE CAYMAN ISLANDS 

THE NOTES MAY NOT BE OFFERED TO MEMBERS OF THE PUBLIC IN THE CAYMAN 

ISLANDS PURSUANT TO S. 194 OF THE COMPANIES LAW (2004 REVISION) OF THE CAYMAN 

ISLANDS. 

NOTICE TO RESIDENTS OF DENMARK 

THE OFFERING OF THE NOTES WILL BE MADE PURSUANT TO SECTION 11 SUBSECTION 1 

NUMBER 1 AND 3 OF THE DANISH EXECUTIVE ORDER NO. 306 OF 28 APRIL 2005 (THE “EXECUTIVE 

ORDER”) AND WILL NOT BE REGISTERED WITH AND HAVE NOT BEEN APPROVED BY OR 

OTHERWISE PUBLISHED BY THE DANISH FINANCIAL SUPERVISORY AUTHORITY, THE DANISH 

SECURITIES COUNCIL OR THE DANISH COMMERCE AND COMPANIES AGENCY UNDER THE 

RELEVANT DANISH ACTS AND REGULATIONS. THIS OFFERING CIRCULAR WILL ONLY BE 

DIRECTED TO PERSONS IN DENMARK WHO ARE REGARDED QUALIFIED INVESTORS AS SET FORTH 

IN SECTION 2 OF THE EXECUTIVE ORDER AND/OR TO INVESTORS WHO ACQUIRE SECURITIES FOR 

A TOTAL CONSIDERATION OF AT LEAST EURO 50,000 PER INVESTOR, FOR EACH SEPARATE OFFER. 

THE NOTES MAY NOT BE MADE AVAILABLE TO ANY OTHER PERSON IN DENMARK NOR MAY THE 

NOTES OTHERWISE BE MARKETED OR OFFERED FOR SALE IN DENMARK. 



OR FROM DENMARK IN CONNECTION WITH THIS OFFER. SANDLER O’NEILL & PARTNERS, L.P. IS 

UNABLE TO ADVISE DANISH INVESTORS ON ANY ASPECT OF THIS OFFER. 

viii

NOTICE TO RESIDENTS OF FINLAND 

THE NOTES MAY NOT BE OFFERED OR SOLD, AND THIS OFFERING CIRCULAR MAY NOT BE 

DISTRIBUTED, DIRECTLY OR INDIRECTLY, TO ANY RESIDENT OF THE REPUBLIC OF FINLAND OR 

IN THE REPUBLIC OF FINLAND, EXCEPT PURSUANT TO APPLICABLE FINNISH LAWS AND 

REGULATIONS. SPECIFICALLY, THE NOTES MAY ONLY BE ACQUIRED FOR DENOMINATIONS OF 

NOT LESS THAN EURO 50,000, AND THE NOTES MAY NOT BE OFFERED OR SOLD, AND THIS 

OFFERING CIRCULAR MAY NOT BE DISTRIBUTED, DIRECTLY OR INDIRECTLY, TO THE PUBLIC IN 

THE REPUBLIC OF FINLAND AS DEFINED UNDER THE FINNISH SECURITIES MARKET ACT OF 1989. 



OR FROM FINLAND IN CONNECTION WITH THIS OFFER. SANDLER O’NEILL & PARTNERS, L.P. IS 

UNABLE TO ADVISE FINNISH INVESTORS ON ANY ASPECT OF THIS OFFER. 

NOTICE TO RESIDENTS OF FRANCE 

THE NOTES HAVE NOT BEEN AND WILL NOT BE OFFERED, MARKETED, DISTRIBUTED, 

SOLD, RESOLD OR OTHERWISE TRANSFERRED, DIRECTLY OR INDIRECTLY IN THE REPUBLIC OF 

FRANCE OR TO THE PUBLIC IN THE REPUBLIC OF FRANCE OTHER THAN TO QUALIFIED 

INVESTORS (“INVESTISSEURS QUALIFIES”) ACTING FOR THEIR OWN ACCOUNT AND/OR A 

LIMITED CIRCLE OF INVESTORS (“CERCLE RESTREINT D’INVESTISSEURS”), ALL AS DEFINED IN 

AND IN ACCORDANCE WITH ARTICLE L. 411-2 OF THE FRENCH CODE MONÉTAIRE ET FINANCIER 

AND DÉCRET NO. 98-880 DATED 1 OCTOBER 1998. 

THE NOTES WILL NOT BE SUBJECT TO ANY APPROVAL BY OR REGISTRATION (VISA) WITH 

THE FRENCH AUTORITÉ DES MARCHÉS FINANCIERS. 

THE DIRECT OR INDIRECT OFFER, MARKETING, DISTRIBUTION, SALE, RE-SALE OR OTHER 

TRANSFER OF THE NOTES TO THE PUBLIC IN THE REPUBLIC OF FRANCE MUST COMPLY WITH 

ARTICLES L. 411-1, L.411-2, L.412-1 AND L.621-8 OF THE FRENCH CODE MONÉTAIRE ET FINANCIER. 

IN RESPECT OF NOTES OFFERED, MARKETED, DISTRIBUTED SOLD, RESOLD OR 

OTHERWISE TRANSFERRED TO A CERCLE RESTREINT D’INVESTISSEURS OF MORE THAN 100 

INVESTORS IN THE REPUBLIC OF FRANCE, EACH INVESTOR IN SUCH CERCLE RESTREINT 

D’INVESTISSEURS MUST CERTIFY HIS/HER PERSONAL, PROFESSIONAL OR FAMILY RELATIONSHIP 

WITH ONE OF THE DIRECTORS. 



OR FROM FRANCE IN CONNECTION WITH THIS OFFER. SANDLER O’NEILL & PARTNERS, L.P. IS 

UNABLE TO ADVISE FRENCH INVESTORS ON ANY ASPECT OF THIS OFFER. 

NOTICE TO RESIDENTS OF GERMANY 

THE NOTES WILL NOT BE OFFERED OR SOLD IN THE FEDERAL REPUBLIC OF GERMANY 

OTHER THAN IN ACCORDANCE WITH THE GERMAN SECURITIES SALES PROSPECTUS ACT OF 

DECEMBER 13, 1990 OF THE FEDERAL REPUBLIC OF GERMANY, AS AMENDED 

(“WERTPAPIERVERKAUFSPROSPEKTGESETZ”), THE GERMAN INVESTMENT ACT OF DECEMBER 15, 

2003 OF THE FEDERAL REPUBLIC OF GERMANY, AS AMENDED (“INVESTMENTGESETZ”) AND ANY 

OTHER LEGAL OR REGULATORY REQUIREMENTS APPLICABLE IN THE FEDERAL REPUBLIC OF 

GERMANY GOVERNING THE ISSUE, OFFER AND SALE OF SECURITIES. NOTWITHSTANDING ANY 

REQUEST OF A GERMAN INVESTOR THEREFOR, THE ISSUER WILL NOT BE IN A POSITION TO, AND 

WILL NOT, COMPLY WITH ANY CALCULATION AND INFORMATION REQUIREMENTS SET FORTH IN 

§ 5 OF THE INVESTMENTSTEUERGESETZ (THE “GERMAN INVESTMENT TAX ACT” OR “InvStG” OR 

ix

“ITA”) FOR GERMAN TAX PURPOSES. IN THIS REGARD, PROSPECTIVE INVESTORS MUST REVIEW 

“RISK FACTORS— CERTAIN MATTERS WITH RESPECT TO GERMAN INVESTORS.” ALL 

PROSPECTIVE GERMAN INVESTORS ARE URGED TO SEEK INDEPENDENT TAX ADVICE. NONE OF 

THE INITIAL PURCHASERS, THE PLACEMENT AGENTS OR THE COLLATERAL MANAGER GIVE TAX 

ADVICE. 



OR FROM GERMANY IN CONNECTION WITH THIS OFFER. SANDLER O’NEILL & PARTNERS, L.P. IS 

UNABLE TO ADVISE GERMAN INVESTORS ON ANY ASPECT OF THIS OFFER. 

NOTICE TO RESIDENTS OF 

THE SPECIAL ADMINISTRATIVE REGION OF HONG KONG 

NO PERSON MAY OFFER OR SELL ANY NOTES IN HONG KONG BY MEANS OF THIS 

OFFERING CIRCULAR OR ANY OTHER DOCUMENT OTHERWISE THAN TO PERSONS WHOSE 

ORDINARY BUSINESS IT IS TO BUY OR SELL SECURITIES (WHETHER AS PRINCIPAL OR AGENT) OR 

IN CIRCUMSTANCES WHICH DO NOT CONSTITUTE AN OFFER TO THE PUBLIC WITHIN THE 

MEANING OF THE COMPANIES ORDINANCE (CHAPTER 32 OF THE LAWS OF HONG KONG). UNLESS 

IT IS A PERSON WHO IS PERMITTED TO DO SO UNDER THE SECURITIES LAWS OF HONG KONG, NO 

PERSON MAY ISSUE, OR HAVE IN ITS POSSESSION FOR THE PURPOSES OF ISSUE, WHETHER IN 

HONG KONG OR ELSEWHERE, THIS OFFERING CIRCULAR OR ANY OTHER ADVERTISEMENT, 

INVITATION OR DOCUMENT WHICH CONTAINS AN INVITATION TO THE PUBLIC TO ENTER INTO 

OR OFFER TO ENTER INTO AN AGREEMENT TO ACQUIRE, DISPOSE OF, SUBSCRIBE FOR OR 

UNDERWRITE THE NOTES OTHER THAN IN RESPECT OF NOTES WHICH ARE OR ARE INTENDED TO 

BE DISPOSED OF ONLY TO PERSONS OUTSIDE HONG KONG OR ONLY TO PERSONS WHO ARE 

“PROFESSIONAL INVESTORS” WITHIN THE MEANING OF THE SECURITIES AND FUTURES 

ORDINANCE (CHAPTER 571 OF THE LAWS OF HONG KONG) AND ANY RULES MADE THEREUNDER. 



OR FROM HONG KONG IN CONNECTION WITH THIS OFFER. SANDLER O’NEILL & PARTNERS, L.P. IS 

UNABLE TO ADVISE HONG KONG INVESTORS ON ANY ASPECT OF THIS OFFER. 

NOTICE TO RESIDENTS OF ITALY 

THIS OFFERING CIRCULAR MAY NOT BE DISTRIBUTED TO MEMBERS OF THE PUBLIC IN 

ITALY. THE ITALIAN COMMISSIONE NAZIONALE PER LA SOCIETA E LA BORSA HAS NOT 

AUTHORIZED ANY OFFERING OF THE SUBSCRIPTION OF THE NOTES. ACCORDINGLY, THE NOTES 

MAY NOT BE OFFERED OR SOLD IN ITALY OR TO RESIDENTS THEREOF EXCEPT AS PERMITTED BY 

ITALIAN LAW. 



OR FROM ITALY IN CONNECTION WITH THIS OFFER. SANDLER O’NEILL & PARTNERS, L.P. IS 

UNABLE TO ADVISE ITALIAN INVESTORS ON ANY ASPECT OF THIS OFFER. 

NOTICE TO RESIDENTS OF JAPAN 

THE NOTES HAVE NOT BEEN, AND WILL NOT BE, REGISTERED UNDER THE SECURITIES 

AND EXCHANGE LAW OF JAPAN. NEITHER THE NOTES NOR ANY INTEREST THEREIN MAY BE 

OFFERED, SOLD, RESOLD OR OTHERWISE TRANSFERRED, DIRECTLY OR INDIRECTLY, IN JAPAN 

OR TO OR FOR THE ACCOUNT OF ANY RESIDENT OF JAPAN (WHICH TERM AS USED HEREIN 

MEANS ANY PERSON RESIDENT IN JAPAN, INCLUDING ANY CORPORATION OR OTHER ENTITY 

ORGANIZED UNDER THE LAWS OF JAPAN), OR TO OTHERS FOR RE-OFFERING OR SALE, DIRECTLY 

x

OR INDIRECTLY, IN JAPAN OR TO A RESIDENT OF JAPAN EXCEPT PURSUANT TO AN EXEMPTION 

FROM THE REGISTRATION REQUIREMENTS OF, AND OTHERWISE IN COMPLIANCE WITH, THE 

SECURITIES AND EXCHANGE LAW AND ANY OTHER APPLICABLE LAW, REGULATIONS AND 

MINISTERIAL GUIDELINES OF JAPAN. 



OR FROM JAPAN IN CONNECTION WITH THIS OFFER. SANDLER O’NEILL & PARTNERS, L.P. IS 

UNABLE TO ADVISE JAPANESE INVESTORS ON ANY ASPECT OF THIS OFFER. 

NOTICE TO RESIDENTS OF KOREA 

NONE OF THE ISSUER, THE CO-ISSUER, THE INITIAL PURCHASERS, THE PLACEMENT 

AGENTS OR THE COLLATERAL MANAGER ARE MAKING ANY REPRESENTATION, EXPRESS OR 

IMPLIED, WITH RESPECT TO THE QUALIFICATION OF THE RECIPIENTS OF THIS OFFERING 

CIRCULAR FOR THE PURPOSE OF INVESTING IN THE NOTES UNDER THE LAWS OF KOREA, 

INCLUDING AND WITHOUT LIMITATION THE FOREIGN EXCHANGE MANAGEMENT LAW AND 

REGULATIONS THEREUNDER. THE NOTES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES 

AND EXCHANGE LAW OF KOREA AND NONE OF THE NOTES MAY BE OFFERED OR SOLD OR 

DELIVERED, DIRECTLY OR INDIRECTLY, IN KOREA OR TO ANY RESIDENT OF KOREA EXCEPT 

PURSUANT TO APPLICABLE LAWS AND REGULATIONS OF KOREA. 



OR FROM KOREA IN CONNECTION WITH THIS OFFER. SANDLER O’NEILL & PARTNERS, L.P. IS 

UNABLE TO ADVISE KOREAN INVESTORS ON ANY ASPECT OF THIS OFFER. 

NOTICE TO RESIDENTS OF THE NETHERLANDS 

THE NOTES MAY NOT BE OFFERED, SOLD, TRANSFERRED OR DELIVERED, WHETHER 

DIRECTLY OR INDIRECTLY, TO ANY INDIVIDUAL OR LEGAL ENTITY IN THE NETHERLANDS 

OTHER THAN TO INDIVIDUALS WHO, OR LEGAL ENTITIES WHICH, IN THE COURSE OF THEIR 

OCCUPATION OR BUSINESS, DEAL OR INVEST IN SECURITIES (AS SET OUT IN SECTION 1 OF THE 

REGULATION OF 9 OCTOBER 1990 IN IMPLEMENTATION OF SECTION 14 OF THE ACT ON THE 

SUPERVISION OF INVESTMENT INSTITUTIONS). 



OR FROM NETHERLANDS IN CONNECTION WITH THIS OFFER. SANDLER O’NEILL & PARTNERS, 

L.P. IS UNABLE TO ADVISE NETHERLANDS INVESTORS ON ANY ASPECT OF THIS OFFER. 

NOTICE TO RESIDENTS OF SINGAPORE 

THIS OFFERING CIRCULAR WILL, PRIOR TO ANY SALE OF SECURITIES PURSUANT TO THE 

PROVISIONS OF SECTION 106D OF THE COMPANIES ACT (CAP. 50), BE LODGED, PURSUANT TO 

SAID SECTION 106D, WITH THE REGISTRAR OF COMPANIES IN SINGAPORE, WHICH TAKES NO 

RESPONSIBILITY FOR ITS CONTENTS, BUT HAS NOT BEEN AND WILL NOT BE REGISTERED AS A 

PROSPECTUS WITH THE REGISTRAR OF COMPANIES IN SINGAPORE. ACCORDINGLY, THE NOTES 

MAY NOT BE OFFERED, AND NEITHER THIS OFFERING CIRCULAR NOR ANY OTHER OFFERING 

DOCUMENT OR MATERIAL RELATING TO THE NOTES MAY BE CIRCULATED OR DISTRIBUTED, 

DIRECTLY OR INDIRECTLY, TO THE PUBLIC OR ANY MEMBER OF THE PUBLIC IN SINGAPORE 

OTHER THAN TO INSTITUTIONAL INVESTORS OR OTHER PERSONS OF THE KIND SPECIFIED IN 

SECTION 106C AND SECTION 106D OF THE COMPANIES ACT OR ANY OTHER APPLICABLE 

EXEMPTION INVOKED UNDER DIVISION 5A OF PART IV OF THE COMPANIES ACT. THE FIRST SALE 

xi

OF SECURITIES ACQUIRED UNDER A SECTION 106C OR SECTION 106D EXEMPTION IS SUBJECT TO 

THE PROVISIONS OF SECTION 106E OF THE COMPANIES ACT. 



OR FROM SINGAPORE IN CONNECTION WITH THIS OFFER. SANDLER O’NEILL & PARTNERS, L.P. IS 

UNABLE TO ADVISE SINGAPOREAN INVESTORS ON ANY ASPECT OF THIS OFFER. 

NOTICE TO RESIDENTS OF SPAIN 

THIS OFFERING CIRCULAR HAS NOT BEEN AND WILL NOT BE REGISTERED WITH THE 

COMISION NACIONAL DEL MERCADO DE VALORES OF SPAIN AND MAY NOT BE DISTRIBUTED IN 

SPAIN IN CONNECTION WITH THE OFFERING AND SALE OF THE NOTES WITHOUT COMPLYING 

WITH ALL LEGAL AND REGULATORY REQUIREMENTS IN RELATION THERETO. 



OR FROM SPAIN IN CONNECTION WITH THIS OFFER. SANDLER O’NEILL & PARTNERS, L.P. IS 

UNABLE TO ADVISE SPANISH INVESTORS ON ANY ASPECT OF THIS OFFER. 

NOTICE TO RESIDENTS OF SWEDEN 

THIS OFFERING CIRCULAR IS FOR THE RECIPIENT ONLY AND MAY NOT IN ANY WAY BE 

FORWARDED TO ANY OTHER PERSON OR TO THE PUBLIC IN SWEDEN. THE OFFERING OF THE 

NOTES IS INTENDED TO BE A PRIVATE PLACEMENT, AND A MINIMUM INVESTMENT OF SEK300,000 

IN THE NOTES IS REQUIRED. 



OR FROM SWEDEN IN CONNECTION WITH THIS OFFER. SANDLER O’NEILL & PARTNERS, L.P. IS 

UNABLE TO ADVISE SWEDISH INVESTORS ON ANY ASPECT OF THIS OFFER. 

NOTICE TO RESIDENTS OF SWITZERLAND 

THE CO-ISSUERS HAVE NOT BEEN AUTHORIZED BY THE SWISS FEDERAL BANKING 

COMMISSION AS A FOREIGN INVESTMENT FUND UNDER ARTICLE 45 OF THE SWISS FEDERAL LAW 

ON INVESTMENT FUNDS OF 18 MARCH 1994. ACCORDINGLY, THE NOTES MAY NOT BE OFFERED 

OR DISTRIBUTED ON A PROFESSIONAL BASIS IN OR FROM SWITZERLAND, AND NEITHER THIS 

OFFERING CIRCULAR NOR ANY OTHER OFFERING MATERIALS RELATING TO THE NOTES MAY BE 

DISTRIBUTED IN CONNECTION WITH ANY SUCH OFFERING OR DISTRIBUTION. THE NOTES MAY, 

HOWEVER, BE OFFERED AND THIS OFFERING CIRCULAR MAY BE DISTRIBUTED IN SWITZERLAND 

ON A PROFESSIONAL BASIS TO A LIMITED NUMBER OF PROFESSIONAL INVESTORS IN 

CIRCUMSTANCES SUCH THAT THERE IS NO PUBLIC OFFER. 



OR FROM SWITZERLAND IN CONNECTION WITH THIS OFFER. SANDLER O’NEILL & PARTNERS, L.P. 

IS UNABLE TO ADVISE SWISS INVESTORS ON ANY ASPECT OF THIS OFFER. 

NOTICE TO RESIDENTS OF TAIWAN AND CHINA 

THE OFFER OF THE NOTES HAS NOT BEEN AND WILL NOT BE REGISTERED WITH THE 

SECURITIES AND FUTURES COMMISSION OF TAIWAN OR WITH THE RELEVANT REGULATORY 

AUTHORITIES IN THE REPUBLIC OF CHINA PURSUANT TO RELEVANT SECURITIES LAWS AND 

REGULATIONS AND MAY NOT BE OFFERED OR SOLD WITHIN TAIWAN OR THE REPUBLIC OF 

xii

CHINA THROUGH A PUBLIC OFFERING OR IN CIRCUMSTANCES WHICH CONSTITUTE AN OFFER 

WITHIN THE MEANING OF THE SECURITIES AND EXCHANGE LAW OF TAIWAN OR WITHIN THE 

MEANING OF RELEVANT SECURITIES LAWS AND REGULATIONS IN THE REPUBLIC OF CHINA 

THAT REQUIRE A REGISTRATION OR APPROVAL OF THE SECURITIES AND FUTURES COMMISSION 

OF TAIWAN OR THE RELEVANT SECURITIES REGULATORY AUTHORITIES IN CHINA. 



OR FROM TAIWAN AND CHINA IN CONNECTION WITH THIS OFFER. SANDLER O’NEILL & 

PARTNERS, L.P. IS UNABLE TO ADVISE TAIWANESE AND CHINESE INVESTORS ON ANY ASPECT OF 

THIS OFFER. 

NOTICE TO RESIDENTS OF THE UNITED KINGDOM 

THE NOTES MAY NOT BE OFFERED OR SOLD AND, PRIOR TO THE EXPIRY OF THE PERIOD 

OF SIX MONTHS FROM THE CLOSING DATE, WILL NOT BE OFFERED OR SOLD TO PERSONS IN THE 

UNITED KINGDOM EXCEPT TO PERSONS WHOSE ORDINARY ACTIVITIES INVOLVE THEM IN 

ACQUIRING, HOLDING, MANAGING OR DISPOSING OF INVESTMENTS (AS PRINCIPAL OR AGENT) 

FOR THE PURPOSE OF THEIR BUSINESS OR OTHERWISE IN CIRCUMSTANCES THAT HAVE NOT 

RESULTED AND WILL NOT RESULT IN AN OFFER TO THE PUBLIC IN THE UNITED KINGDOM 

WITHIN THE MEANING OF THE PROSPECTUS REGULATIONS 2005. THIS OFFERING CIRCULAR AND 

ANY OTHER DOCUMENT IN CONNECTION WITH THE OFFERING AND ISSUANCE OF THE NOTES 

MAY ONLY BE ISSUED OR PASSED ON TO A PERSON OF A KIND DESCRIBED IN ARTICLE 49(2) OF 

THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 OR IS A 

PERSON TO WHOM THIS OFFERING CIRCULAR OR ANY OTHER SUCH DOCUMENT MAY 

OTHERWISE LAWFULLY BE ISSUED OR PASSED ON (ALL SUCH PERSONS TOGETHER BEING 

REFERRED TO AS “RELEVANT PERSONS”). ANY INVESTMENT OR INVESTMENT ACTIVITY TO 

WHICH THIS DOCUMENT RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE 

ENGAGED IN ONLY WITH RELEVANT PERSONS. 



OR FROM UNITED KINGDOM IN CONNECTION WITH THIS OFFER. SANDLER O’NEILL & PARTNERS, 

L.P. IS UNABLE TO ADVISE UNITED KINGDOM INVESTORS ON ANY ASPECT OF THIS OFFER. 

AVAILABLE INFORMATION 

To permit compliance with Rule 144A under the Securities Act for resales of the Notes, the Co-Issuers will 

make available upon request to Holders and prospective purchasers designated by any Holder the information 

required to be delivered under Rule 144A(d)(4) under the Securities Act if, at the time of the request, the Co-Issuers 

are not reporting companies under Section 13 or Section 15(d) of the U.S. Securities Exchange Act of 1934, as 

amended (the “Exchange Act”), or exempt from reporting requirements pursuant to Rule 12g3-2(b) under the 

Exchange Act. 

CERTAIN CONSIDERATIONS RELATING TO THE CAYMAN ISLANDS 

The Issuer is an exempted company with limited liability incorporated under the laws of the Cayman 

Islands. As a result, it may not be possible for investors to effect service of process upon the Issuer within the 

United States or to enforce against the Issuer in United States courts judgments predicated upon the civil liability 

provisions of the securities laws of the United States. The Issuer has been informed by Maples and Calder, its legal 

advisor in the Cayman Islands, that the United States and the Cayman Islands do not currently have a treaty 

providing for reciprocal recognition and enforcement of judgments in civil and commercial matters and that a final 

judgment for the payment of money rendered by any federal or state court in the United States based on civil 

liability, whether or not predicated solely upon United States securities laws, would, therefore, not be automatically 

enforceable in the Cayman Islands and there is doubt as to the enforceability in the Cayman Islands, in original 

actions or in actions for the enforcement of judgments of the United States courts, of liabilities predicated solely 

xiii

upon United States securities laws. The Issuer will appoint CT Corporation System, 111 Eighth Avenue, New York, 

New York 10011 as its agent for service of process. 

xiv

SUMMARY 

The following summary is qualified in its entirety by reference to the more detailed information 

appearing elsewhere in this Offering Circular and the documents referred to herein. A glossary of certain defined 

terms used herein (the “Glossary”) appears as Annex A to this Offering Circular, and an index of defined terms 

used herein appears as Annex B hereto. 

The Issuer 

MMCapS Funding XVII, Ltd., a newly formed exempted company with 

limited liability incorporated under the laws of the Cayman Islands (the 

“Issuer”). The Issuer has no prior operating history. The Issuer has been 

established to acquire a portfolio of Bank Capital Securities, Bank 

Subordinated Notes, Insurance Capital Securities and the Insurance Surplus 

Note (collectively, the “Collateral Debt Securities”) issued by various issuers 

that satisfy certain criteria described herein. 

The activities of the Issuer will be limited to (i) issuance of the Ordinary 

Shares, (ii) issuance of the Notes, which will be secured by the Collateral Debt 

Securities, (iii) investing in and disposing of Collateral Debt Securities and 

Eligible Investments as permitted by the Indenture, (iv) entering into and 

performing its obligations under the Indenture, the Collateral Management 

Agreement, the Collateral Administration Agreement and the Hedge 

Agreements, and (v) other activities incidental to the foregoing and permitted 

by the Indenture. Cash flow derived from the Collateral Debt Securities 

securing the Notes and amounts received under the Hedge Agreements will be 

the only source of funds available to make payments on the Notes. 

The Issuer has an authorized capital of U.S.$250 consisting of 250 voting 

ordinary shares, U.S.$1.00 par value per share (the “Ordinary Shares”). By the 

Closing Date, all of the Ordinary Shares will be issued and outstanding and 

will be held by Maples Finance Limited on the terms of a declaration of trust. 

The Co-Issuer 

Securities Offered 

MMCapS Funding XVII, Corp., a newly formed Delaware corporation (the 

“Co-Issuer” and, together with the Issuer, the “Co-Issuers”). The Co-Issuer 

will be capitalized only to the extent of its common equity of U.S.$100, will 

have no assets other than its equity capital and will have no debt other than as 

Co-Issuer of the Class A Notes, Class B Notes and Class C Notes. The Income 

Notes will not be obligations of the Co-Issuer. 

(i) U.S.$162,000,000 in Aggregate Principal Amount of Class A-1 Floating 

Rate Notes Due 2035 (the “Class A-1 Notes”), (ii) U.S.$19,500,000 in 

Aggregate Principal Amount of Class A-2 Floating Rate Notes Due 2035 (the 

“Class A-2 Notes” and, together with the Class A-1 Notes, the “Class A 

Notes”), (iii) U.S.$33,000,000 in Aggregate Principal Amount of Class B 

Floating Rate Notes Due 2035 (the “Class B Notes”), (iv) U.S.$35,475,000 in 

Aggregate Principal Amount of Class C-1 Floating Rate Deferrable Interest 

Notes Due 2035 (the “Class C-1 Notes”), (v) U.S.$35,475,000 in Aggregate 

Principal Amount of Class C-2 Fixed Rate Deferrable Interest Notes Due 2035 

(the “Class C-2 Notes” and, together with the Class C-1 Notes, the “Class C 

Notes”) and (vi) U.S.$27,000,000 in Aggregate Principal Amount of 

Subordinate Income Notes Due 2035 (the “Income Notes” and, together with 

the Class A Notes, Class B Notes and Class C Notes, the “Notes”). 

The Notes will be issued pursuant to an indenture (the “Indenture”), dated as of 

the Closing Date, among the Issuer, the Co-Issuer and JPMorgan Chase Bank, 

National Association, as trustee (the “Trustee”). The Class A Notes, Class B 

Notes and Class C Notes will be non-recourse obligations of the Co-Issuers 

and the Income Notes will be non-recourse obligations of the Issuer only, and 

1

and the Income Notes will be non-recourse obligations of the Issuer only, and 

all amounts payable in respect of the Notes will be paid solely from and to the 

extent of the available proceeds from the Trust Estate. 

Collateral Manager 

Use of Proceeds 

Denominations 

Form, Registration and 

Transfer of the Notes 

Sandler O’Neill Advisors, L.P., a Delaware limited partnership (the “Collateral 

Manager”), which is an Affiliate of Sandler O’Neill & Partners, L.P., one of 

the Initial Purchasers and Placement Agents, will serve as the collateral 

manager under a Collateral Management Agreement (the “Collateral 

Management Agreement”), dated as of the Closing Date, between the Issuer 

and the Collateral Manager. Pursuant to the Collateral Management 

Agreement and consistent with the terms of the Indenture, the Collateral 

Manager will advise the Issuer with respect to the selection and acquisition of 

(i) the Collateral Debt Securities to be acquired by the Issuer on the Closing 

Date and (ii) the Eligible Investments to be acquired by the Issuer from time to 

time, in each case, based on the restrictions set forth in the Indenture (including 

the portfolio limitations described in “Security for the Notes— Portfolio 

Limitations” herein). The Collateral Manager will also advise the Issuer with 

respect to the disposition of the Collateral Debt Securities and Eligible 

Investments (including exercising rights and remedies associated with the 

Collateral Debt Securities and Eligible Investments). The Collateral Manager 

will also advise the Issuer with respect to entering into, assigning, transferring, 

terminating and reducing the notional amount of Hedge Agreements. For a 

summary of the provisions of the Collateral Management Agreement and 

certain other information concerning the Collateral Manager, see “The 

Collateral Manager” and “The Collateral Management Agreement.” 

A portion of the gross proceeds received from the issuance and sale of the 

Notes and the upfront payment from the initial Hedge Counterparty to the 

Issuer under the related Hedge Agreement (the “Upfront Payment”) will be 

applied by the Issuer to pay the organizational expenses of the Co-Issuers 

(including, without limitation, the legal fees and expenses of counsel to the Co- 

Issuers, the Initial Purchasers, the Placement Agents and the Collateral 

Manager), to pay expenses relating to the acquisition of the Collateral Debt 

Securities and any other Administrative Expenses incurred by the Issuer on or 

prior to, or in connection with, the Closing Date, and to pay the expenses of 

offering the Notes (including placement agency fees payable in connection 

with the placement of the Income Notes). The net proceeds received from the 

issuance and sale of the Notes and the Upfront Payment, after payment of the 

foregoing expenses, will be used by the Issuer to purchase a portfolio of 

Collateral Debt Securities with an aggregate Principal Balance of 

U.S.$300,000,000 as of the Closing Date. 

The Class A Notes, Class B Notes and Class C Notes will be issued in 

minimum denominations of U.S.$250,000 and integral multiples of U.S.$1,000 

in excess thereof. The Income Notes will be issued in minimum 

denominations of U.S.$100,000 and integral multiples of U.S.$1,000 in excess 

thereof. No Notes will be issued in bearer form. The Notes are subject to 

certain restrictions on transfer as described herein. See “Transfer 

Restrictions.” 

The Class A Notes, Class B Notes and Class C Notes initially sold in the 

United States or to U.S. Persons in reliance on Rule 144A under the Securities 

Act (“Rule 144A”) will be represented by one or more permanent global notes 

in definitive, fully registered form without interest coupons (each, a “Rule 

144A Global Note”) deposited with the Trustee as custodian for, and registered 

in the name of, a nominee of The Depository Trust Company (“DTC”). Rule 

144A Global Notes may be sold only to purchasers that are “qualified 

institutional buyers” (as defined in Rule 144A) (“Qualified Institutional 

2

institutional buyers” (as defined in Rule 144A) (“Qualified Institutional 

Buyers”) and are also “qualified purchasers” (as defined in Section 2(a)(51)(A) 

of the Investment Company Act and the rules and regulations thereunder) 

(“Qualified Purchasers”). The Class A Notes, Class B Notes and Class C 

Notes sold to non-U.S. Persons in Offshore Transactions in reliance on 

Regulation S under the Securities Act (“Regulation S”) will be initially issued 

as Temporary Regulation S Global Notes through Euroclear and Clearstream. 

The Temporary Regulation S Global Notes will be exchangeable for 

permanent Regulation S Global Notes on or after the Exchange Date upon 

certification that the beneficial interests in such Notes are owned by non-U.S. 

Persons. Certificated Notes will not be issued in exchange for interests in the 

Global Notes except in the limited circumstances described in “Description of 

the Notes— Form, Denomination and Registration.” The Class A Notes, Class 

B Notes and Class C Notes sold to Qualified Purchasers that are institutional 

“accredited investors” (as defined in clause (1), (2), (3) or (7) of Rule 501(a) of 

Regulation D under the Securities Act) will be issued in the form of 

Certificated Notes. 

The Income Notes will be issued in the form of Certificated Notes. The 

Income Notes may be sold either (i) in the United States or to U.S. Persons in 

transactions in which the purchasers are Qualified Purchasers that are also 

either “accredited investors” (as defined in Rule 501(a) of Regulation D under 

the Securities Act) or Qualified Institutional Buyers that purchase such Notes 

for their own account or for the accounts of Qualified Institutional Buyers that 

are also Qualified Purchasers or (ii) to any non-U.S. Person in Offshore 

Transactions in reliance on Regulation S. 

Class A-1 Notes 

The Co-Issuers expect to issue U.S.$162,000,000 in Aggregate Principal 

Amount of Class A-1 Notes to be secured by the Trust Estate pursuant to the 

Indenture. Payments of principal of and interest on the Class A-1 Notes will 

be subordinate to certain expenses of the Issuer (including certain amounts 

owed to each Hedge Counterparty). Payments of principal of the Class A-1 

Notes will be subordinate to payments of interest on the Class A-2 Notes and 

the Class B Notes. 

The Class A-1 Notes will bear interest at a per annum rate (the “Applicable 

Periodic Rate” for the Class A-1 Notes) equal to LIBOR, reset quarterly, plus 

0.35%. The Class A-1 Notes will provide for the payment of periodic interest 

(“Periodic Interest” with respect to the Class A-1 Notes) on each March 1, 

June 1, September 1 and December 1 of each year or, if any such day is not a 

Business Day, then on the next succeeding Business Day (each such date, a 

“Payment Date”) beginning in December 2005 and continuing through the 

Payment Date occurring in December 2035 (the “Stated Maturity Date”) or 

such earlier date on which the Aggregate Principal Amount of the Class A-1 

Notes is paid in full in accordance with the Priority of Payments, including 

such payment in full in connection with (i) a Coverage Prepayment as 

described herein under “Description of the Notes— Coverage Tests and 

Prepayments,” (ii) an additional principal payment made on or after the Turbo 

Date as described below, (iii) any other payment of principal of the Class A-1 

Notes as described herein under “Description of the Notes— Priority of 

Payments” (including a Redemption Prepayment as described herein under 

“Description of the Notes— Redemption Prepayments”), (iv) an Optional Notes 

Redemption as described herein under “Description of the Notes— Optional 

Notes Redemption” or (v) a Mandatory Auction Call as described herein 

under “Description of the Notes— Mandatory Auction Call” (such date, the 

“Class A-1 Final Maturity Date”). Interest on the Class A-1 Notes will accrue 

from and including the Closing Date and will be payable quarterly in arrears on 

each Payment Date to the Holders of the Class A-1 Notes as of the related 

3

each Payment Date to the Holders of the Class A-1 Notes as of the related 

Record Date. Interest on the Class A-1 Notes will be computed on the basis of 

a 360-day year and the actual number of days in the applicable Periodic 

Interest Accrual Period. Interest payments on the Class A-1 Notes will be 

made in accordance with the Priority of Payments. See “Description of the 

Notes— Priority of Payments.” 

“Periodic Interest Accrual Period” means (i) with respect to the initial Payment 

Date, the period from and including the Closing Date to, but excluding, such 

Payment Date, and (ii) thereafter, with respect to each Payment Date, the 

period from and including the first day following the end of the preceding 

Periodic Interest Accrual Period and ending on (and including) the day before 

such Payment Date; provided, however, that with respect to the Class C-2 

Notes only, the Periodic Interest Accrual Period for each Payment Date shall 

end on the day before March 1, June 1, September 1 and December 1 

regardless of whether such day is a Business Day. 

Beginning on the Payment Date occurring in December 2015 (the “Turbo 

Date”), the Class A-1 Notes will receive additional principal payments equal to 

60% of the amount of Interest Collections (if any) that would otherwise be 

available for payments on the Income Notes. See “Description of the Notes— 

Priority of Payments.” 



Amount of Class A-2 Notes to be secured by the Trust Estate pursuant to the 

Indenture. Payments of principal of and interest on the Class A-2 Notes will 

be subordinate to certain expenses of the Issuer (including certain amounts 

owed to each Hedge Counterparty). Payments of interest of the Class A-2 

Notes will be subordinate to payments of interest on the Class A-1 Notes. 

Payments of principal of the Class A-2 Notes will be subordinate to payments 

of interest and principal on the Class A-1 Notes and to payments of interest on 

the Class B Notes. 

The Class A-2 Notes will bear interest at a per annum rate (the “Applicable 

Periodic Rate” for the Class A-2 Notes) equal to LIBOR, reset quarterly, plus 

0.45%. The Class A-2 Notes will provide for the payment of periodic interest 

(“Periodic Interest” with respect to the Class A-2 Notes) on each Payment Date 

beginning in December 2005 and continuing through the Stated Maturity Date 

or such earlier date on which the Aggregate Principal Amount of the Class A-2 





Date as described below, (iii) any other payment of principal of the Class A-2 





Notes Redemption” or (v) a Mandatory Auction Call as described herein under 

“Description of the Notes— Mandatory Auction Call” (such date, the “Class 

A-2 Final Maturity Date”). Interest on the Class A-2 Notes will accrue from 

and including the Closing Date and will be payable quarterly in arrears on each 

Payment Date to the Holders of the Class A-2 Notes as of the related Record 

Date. Interest on the Class A-2 Notes will be computed on the basis of a 360- 

day year and the actual number of days in the applicable Periodic Interest 

Accrual Period. Interest payments on the Class A-2 Notes will be made in 

accordance with the Priority of Payments. See “Description of the Notes— 

4

accordance with the Priority of Payments. See “Description of the Notes— 

Priority of Payments.” 

Beginning on the Turbo Date and after the Aggregate Principal Amount of the 

Class A-1 Notes has been reduced to zero, the Class A-2 Notes will receive 

additional principal payments equal to 60% of the amount of Interest 

Collections (if any) that would otherwise be available for payments on the 

Income Notes. See “Description of the Notes— Priority of Payments.” 

Class B Notes 


Amount of Class B Notes to be secured by the Trust Estate pursuant to the 

Indenture. Payments of principal and interest on the Class B Notes will be 

subordinate to certain expenses of the Issuer (including certain amounts owed 

to each Hedge Counterparty). Payments of interest of the Class B Notes will 

be subordinate to payments of interest on the Class A Notes. Payments of 

principal of the Class B Notes will be subordinate to payments of interest and 

principal on the Class A Notes. 

The Class B Notes will bear interest at a per annum rate (the “Applicable 

Periodic Rate” for the Class B Notes) equal to LIBOR, reset quarterly, plus 

0.60%. The Class B Notes will provide for the payment of periodic interest 

(“Periodic Interest” with respect to the Class B Notes) on each Payment Date 


or such earlier date on which the Aggregate Principal Amount of the Class B 





Date as described below, (iii) any other payment of principal of the Class B 






“Description of the Notes— Mandatory Auction Call” (such date, the “Class B 

Final Maturity Date”). Interest on the Class B Notes will accrue from and 

including the Closing Date and will be payable quarterly in arrears on each 

Payment Date to the Holders of the Class B Notes as of the related Record 

Date. Interest on the Class B Notes will be computed on the basis of a 360-day 

year and the actual number of days in the applicable Periodic Interest Accrual 

Period. Interest payments on the Class B Notes will be made in accordance 

with the Priority of Payments described herein. 

Beginning on the Turbo Date and after the Aggregate Principal Amounts of the 

Class A-1 Notes and Class A-2 Notes have been reduced to zero, the Class B 

Notes will receive additional principal payments equal to 60% of the amount 

of Interest Collections (if any) that would otherwise be available for payments 

on the Income Notes. See “Description of the Notes— Priority of Payments.” 

Class C-1 Notes 


Amount of Class C-1 Notes to be secured by the Trust Estate pursuant to the 

Indenture. Payments of principal and interest on the Class C-1 Notes will be 


to each Hedge Counterparty). Payments of interest of the Class C-1 Notes will 

be made pro rata with payments of interest on the Class C-2 Notes based on the 

respective amounts of Periodic Interest due thereon, and will be subordinate to 

payments of interest on the Class A Notes and the Class B Notes. Payments of 

principal of the Class C-1 Notes will be made pro rata with principal payments 

5


on the Class C-2 Notes (based on the respective Aggregate Principal Amounts 

thereof), and will be subordinate to payments of interest and principal on the 

Class A Notes and the Class B Notes. 

The Class C-1 Notes will bear interest at a per annum rate (the “Applicable 

Periodic Rate” for the Class C-1 Notes) equal to LIBOR, reset quarterly, plus 

1.20%. The Class C-1 Notes will provide for the payment of periodic interest 

(“Periodic Interest” with respect to the Class C-1 Notes) on each Payment Date 


or such earlier date on which the Aggregate Principal Amount of the Class C-1 





Date as described below, (iii) any other payment of principal of the Class C-1 







C-1 Final Maturity Date”). Interest on the Class C-1 Notes will accrue from 


Payment Date to the Holders of the Class C-1 Notes as of the related Record 

Date. Interest on the Class C-1 Notes will be computed on the basis of a 360- 

day year and the actual number of days in the applicable Periodic Interest 

Accrual Period. Interest payments on the Class C-1 Notes will be made in 

accordance with the Priority of Payments described herein. 

For so long as any of the Class A Notes or Class B Notes are Outstanding, to 

the extent that funds are not available in accordance with the Priority of 

Payments on any Payment Date to pay Periodic Interest otherwise due on the 

Class C-1 Notes for such Payment Date, such interest (the “Class C-1 Note 

Deferred Interest”) will not be due and payable on such date, but will be added 

to the Aggregate Principal Amount of the Class C-1 Notes and thereafter will 

bear interest at the Applicable Periodic Rate, to the extent permitted by law. 

Consequently, the failure to pay any Periodic Interest due on the Class C-1 

Notes will not be an Event of Default so long as any of the Class A Notes or 

Class B Notes are Outstanding. 


Class A-1 Notes, Class A-2 Notes and Class B Notes have been reduced to 

zero, Class C-1 Notes and the Class C-2 Notes will receive, on a pro rata basis, 






Amount of Class C-2 Notes to be secured by the Trust Estate pursuant to the 

Indenture. Payments of principal and interest on the Class C-2 Notes will be 


to each Hedge Counterparty). Payments of interest of the Class C-2 Notes will 

be made pro rata with payments of interest on the Class C-1 Notes based on the 

respective amounts of Periodic Interest due thereon, and will be subordinate to 

payments of interest on the Class A Notes and the Class B Notes. Payments of 


on the Class C-1 Notes (based on the Aggregate Principal Amounts thereof), 

6

on the Class C-1 Notes (based on the Aggregate Principal Amounts thereof), 

and will be subordinate to payments of interest and principal on the Class A 

Notes and the Class B Notes. 

The Class C-2 Notes will bear interest at a per annum rate (the “Applicable 

Periodic Rate” for the Class C-2 Notes) equal to 6.0825% per annum. The 

Class C-2 Notes will provide for the payment of periodic interest (“Periodic 

Interest” with respect to the Class C-2 Notes) on each Payment Date beginning 

in December 2005 and continuing through the Stated Maturity Date or such 

earlier date on which the Aggregate Principal Amount of the Class C-2 Notes 

is paid in full in accordance with the Priority of Payments, including such 

payment in full in connection with (i) a Coverage Prepayment as described 

herein under “Description of the Notes— Coverage Tests and Prepayments,” 

(ii) an additional principal payment made on or after the Turbo Date as 

described below, (iii) any other payment of principal of the Class C-2 Notes as 

described herein under “Description of the Notes— Priority of Payments” 

(including a Redemption Prepayment as described herein under “Description 

of the Notes— Redemption Prepayments”), (iv) an Optional Notes Redemption 

as described herein under “Description of the Notes— Optional Notes 

Redemption” or (v) a Mandatory Auction Call as described herein under 


C-2 Final Maturity Date”). Interest on the Class C-2 Notes will accrue from 


Payment Date to the Holders of the Class C-2 Notes as of the related Record 

Date. Interest on the Class C-2 Notes will be computed on the basis of a 360- 

day year consisting of twelve 30-day months. Interest payments on the Class 

C-2 Notes will be made in accordance with the Priority of Payments described 

herein. 

For so long as any of the Class A Notes or Class B Notes are Outstanding, to 

the extent that funds are not available in accordance with the Priority of 

Payments on any Payment Date to pay Periodic Interest otherwise due on the 

Class C-2 Notes for such Payment Date, such interest (the 

“Class C-2 Note Deferred Interest”) will not be due and payable on such date, 

but will be added to the Aggregate Principal Amount of the Class C-2 Notes 

and thereafter will bear interest at the Applicable Periodic Rate, to the extent 

permitted by law. Consequently, the failure to pay any Periodic Interest due on 

the Class C-2 Notes will not be an Event of Default so long as any of the Class 

A Notes or Class B Notes are Outstanding. 


Class A-1 Notes, Class A-2 Notes and Class B Notes have been reduced to 

zero, Class C-1 Notes and the Class C-2 Notes will receive, on a pro rata basis, 




Principal Payments 

Subject to the availability of funds and in accordance with the Priority of 

Payments, principal payments on the Class A Notes, Class B Notes and Class 

C Notes will be made (a) prior to the Stated Maturity Date only (i) when 

Principal Collections are available for such application, in accordance with the 

Priority of Payments, (ii) if the Coverage Tests are not met, (iii) on and after 

the Turbo Date as provided in the Priority of Payments, (iv) upon an Optional 

Notes Redemption or (v) upon a Mandatory Auction Call or (b) on the Stated 

Maturity Date from the proceeds of the payments received at maturity of the 

Collateral Debt Securities. The Collateral Debt Securities may not be prepaid 

before their respective initial optional redemption dates except in connection 

with the occurrence of a Special Event. See “Security for the Notes— Portfolio 

7

with the occurrence of a Special Event. See “Security for the Notes— Portfolio 

Statistics”, “Security for the Notes— Description of the Bank Capital 

Securities— Terms of the Bank Capital Securities— Redemption and 

Prepayments,” “Security for the Notes— Description of the Bank Subordinated 

Notes— Redemption and Prepayments,” “Security of the Notes— Description 

of the Insurance Capital Securities— Terms of the Insurance Capital 

Securities— —Redemption and Prepayments” and “Security for the Notes— 

Description of the Insurance Surplus Note— Maturity; Redemption.” 

Redemptions of Collateral Debt Securities will result in payments of principal 

of the Notes in accordance with the Priority of Payments. 

Income Notes 

The Issuer expects to issue U.S.$27,000,000 in Aggregate Principal Amount of 

Income Notes to be secured by the Trust Estate pursuant to the Indenture. The 

Income Notes will be subordinate to the Class A Notes, Class B Notes and 

Class C Notes in respect of payments of principal and interest thereon and to 

all other expenses of the Issuer as described herein. 

The Holders of the Income Notes will not be entitled to payments of interest at 

a stated rate, but will receive all excess funds available for distribution on each 

Payment Date in accordance with the Priority of Payments. See “Description 

of the Notes— Priority of Payments.” 

Payments Allocated Between 

the Class A Notes, Class B 

Notes and Class C Notes and 

Income Notes 

Optional Notes Redemption 

Beginning on the Turbo Date and continuing for so long as the Class A Notes, 

Class B Notes and Class C Notes are Outstanding, the allocation of payments 

between such Notes and the Income Notes will change. Pursuant to clause 

(a)(xiii) of the Priority of Payments, on each Payment Date occurring on or 

after the Turbo Date, the Holders of the Class A Notes, Class B Notes or Class 

C Notes then Outstanding may receive, in the sequential order and priority set 

forth in such clause (a)(xiii), additional principal payments from 60% of the 

amount of Interest Collections (if any) that would otherwise have been 

available for payments on the Income Notes. Consequently, on and after the 

Turbo Date and for so long as the Class A Notes, Class B Notes and Class C 

Notes remain Outstanding, payments on the Income Notes on each Payment 

Date will be reduced. See “Description of the Notes— Priority of Payments.” 

The Class A Notes, Class B Notes and Class C Notes will be redeemed by the 

Co-Issuers, and the Income Notes will be redeemed by the Issuer, on any 

Payment Date on or after the Payment Date occurring in December 2009, in 

whole but not in part, if the Holders of 66-2/3% in Aggregate Principal 

Amount of the Income Notes direct the Trustee to sell all of the Collateral Debt 

Securities and if, subject to certain restrictions and limitations, the sale of 

Collateral Debt Securities may be made at a price that would enable all of the 

Class A Notes, Class B Notes and Class C Notes to be simultaneously 

redeemed at the respective Optional Note Redemption Prices thereof. An 

Optional Notes Redemption will be subject to further conditions described in 

greater detail herein. See “Description of the Notes— Optional Notes 

Redemption.” 

The Optional Note Redemption Price of the Class A Notes, Class B Notes and 

Class C Notes in connection with an Optional Notes Redemption will be their 

then-outstanding principal amount (including in the case of the Class C-1 

Notes and the Class C-2 Notes, any unpaid Class C-1 Note Deferred Interest 

and Class C-2 Note Deferred Interest, respectively), and any accrued and 

unpaid interest to (but excluding) the date of redemption, plus in the case of the 

Class C-2 Notes only, the excess, if any, of (x) the present value of the 

scheduled payments of interest and principal which are remaining with respect 

to the Class C-2 Notes as of the Payment Date on which such Optional Notes 

Redemption will be made, based on the assumption that no principal is paid on 

8

Redemption will be made, based on the assumption that no principal is paid on 

the Class C-2 Notes until the Class C-2 Notes are paid in full on the Payment 

Date in December 2015, and using a discount factor equal to the USD-ISDA- 

Swap Rate with a maturity as close to but not exceeding the period of time 

between the Payment Date of the redemption and the Payment Date occurring 

in December 2015 (calculated as of the 45th day preceding the Payment Date 

of the redemption), plus 1.45% over (y) 100% of the Aggregate Principal 

Amount of the Class C-2 Notes. The Optional Note Redemption Price of any 

Income Note in connection with an Optional Notes Redemption will be its pro 

rata share (equal to a fraction, the numerator of which is the Aggregate 

Principal Amount of such Income Note and the denominator of which is the 

Aggregate Principal Amount of all Income Notes) of the funds available for 

such redemption after payment of the Optional Note Redemption Price of the 

Class A Notes, Class B Notes and Class C Notes to be redeemed and all other 

amounts payable under the Indenture in connection with such Optional Notes 

Redemption (including any termination payments due in respect of the Hedge 

Agreements). An Optional Notes Redemption will be subject to further 

conditions described in greater detail herein. See “Description of the Notes— 

Optional Notes Redemption.” 

Mandatory Auction Call 

If the Class A Notes, Class B Notes and Class C Notes have not been 

redeemed in full prior to the Payment Date occurring in December 2015, then 

an auction (an “Auction”) of the Collateral Debt Securities will be conducted 

by the Collateral Manager on behalf of the Issuer and, provided that certain 

conditions are satisfied, the Collateral Debt Securities will be sold and the 

Notes will be redeemed on such Payment Date (any such redemption, a 

“Mandatory Auction Call”). If such conditions are not satisfied and the 

Auction is not successfully conducted prior to such Payment Date, the 

Collateral Manager will conduct Auctions on a semi-annual basis until a 

successful Auction has been conducted or the Stated Maturity Date occurs. 

See “Description of the Notes— Mandatory Auction Call.” Under the Auction, 

the Collateral Debt Securities will only be sold if the sale of Collateral Debt 

Securities may be made at a price that would enable all of the Notes to be 

simultaneously redeemed at the Mandatory Auction Call Amount and enable 

the Issuer to pay all amounts payable under the Indenture in connection with 

such Mandatory Auction Call (including any termination payments due in 

respect of the Hedge Agreements). A Mandatory Auction Call will be subject 

to further conditions described in greater detail herein. See “Description of the 

Notes— Mandatory Auction Call.” 

The “Mandatory Auction Call Amount” will be equal to the sum of (a) the 

then-outstanding principal amount of the Class A Notes, Class B Notes and 

Class C Notes (including in the case of the Class C-1 Notes and the Class C-2 

Notes, any unpaid Class C-1 Note Deferred Interest and Class C-2 Note 

Deferred Interest, respectively), and any accrued and unpaid interest to (but 

excluding) the date of redemption, plus (b) an amount equal to the greater of 

(i)(A) the initial face amount of the Income Notes outstanding at such time 

minus (B) the aggregate amount of all cash payments made in respect of the 

Income Notes on or prior to the relevant Auction Date and (ii) zero; provided 

that (x) Holders of 100% of the aggregate outstanding principal amount of any 

class of the Class A-1 Notes, the Class A-2 Notes, the Class B Notes or the 

Class C Notes (with the Class C Notes voting as a single class for this purpose) 

may elect to receive less than 100% of the amount payable to such class in 

accordance with clause (a) and (y) Holders of 100% of the Income Notes may 

elect to receive less than 100% of the amount payable to the Income Notes in 

accordance with clause (b) and in either such case, the Mandatory Auction Call 

9

accordance with clause (b) and in either such case, the Mandatory Auction Call 

Amount shall be reduced accordingly for purposes of this definition. 

Application of Funds 

Clean Up Call 

Prepayment of Notes from 

Optional Redemptions of 

Collateral Debt Securities 

Prepayment of Notes from 

Special Redemptions of 

Collateral Debt Securities 

Class A/B Coverage Test and 

Coverage Prepayments 

On each Payment Date, including any Final Maturity Date, collections received 

in respect of the Trust Estate, to the extent of Available Funds and, in certain 

circumstances, amounts on deposit in the Class A/B Reserve Account and the 

Expense Reserve Account, will be applied by the Trustee in the manner and 

order of priority set forth under “Description of the Notes— Priority of 

Payments.” 

After the Class A Notes, Class B Notes and Class C Notes have been paid in 

full, the Income Notes may be redeemed in whole (a “Clean Up Call”) on any 

Payment Date at the direction of the Holders of 66-2/3% (by Aggregate 

Principal Amount) of the Income Notes from Sale Proceeds received from the 

disposition of Collateral Debt Securities and other assets in the Trust Estate. 

Upon a Clean Up Call, the Trustee will pay to the Holders of Income Notes 

any Sale Proceeds and other amounts remaining after payment of all other 

amounts payable prior to the Income Notes in accordance with the Priority of 

Payments. See “Description of the Notes— Clean Up Call.” 

If an optional redemption is made with respect to any of the Collateral Debt 

Securities during any Due Period (other than as a result of a Special Event), 

then that portion of the redemption proceeds equal in the aggregate to the 

Principal Balance of Collateral Debt Securities prepaid will be deposited into 

the Principal Collection Account and will be applied in accordance with clause 

(b) of the Priority of Payments on the Payment Date following the Due Period 

in which such redemption occurs. Any resulting payment of principal of the 

Notes pursuant to clause (b) of the Priority of Payments will be at par without 

payment of any redemption premium or make-whole amount. Any accrued 

interest received in connection with such redemptions will be deposited in the 

Interest Collection Account and any premiums received in connection with 

such redemptions will be deposited in the Class A/B Reserve Account (or after 

the Class A/B Reserve Account is closed, the Interest Collection Account). 

If a redemption is made with respect to any of the Collateral Debt Securities 

during any Due Period as a result of a Special Event, then that portion of the 

redemption proceeds equal in the aggregate to the Principal Balance of 

Collateral Debt Securities prepaid will be deposited into the Principal 

Collection Account and will be applied in accordance with clause (b) of the 

Priority of Payments on the Payment Date following the Due Period in which 

such redemption occurs. Any resulting payment of principal of the Notes 

pursuant to clause (b) of the Priority of Payments will be at par without 

payment of any redemption premium or make-whole amount. Any accrued 

interest received in connection with such redemptions will be deposited in the 

Interest Collection Account and any premiums received in connection with 

such redemptions will be deposited in the Class A/B Reserve Account (or after 

the Class A/B Reserve Account is closed, the Interest Collection Account). 

At any time that any of the Class A Notes or Class B Notes are Outstanding, if 

either Class A/B Coverage Test described below is not satisfied as of the 

Calculation Date relating to any Payment Date, certain of the amounts that 

would otherwise be used on such Payment Date for payments on the Class C 

Notes or Income Notes and certain expenses of the Co-Issuers if the Class A/B 

Coverage Tests were satisfied will instead be applied on such Payment Date, in 

accordance with the Priority of Payments, in each case, to the extent necessary 

to satisfy the Class A/B Coverage Tests, to principal payments on the Class A- 

1 Notes then Outstanding until the Aggregate Principal Amount of the Class 

A-1 Notes is reduced to zero, then to principal payments on the Class A-2 

10

A-1 Notes is reduced to zero, then to principal payments on the Class A-2 

Notes then Outstanding until the Aggregate Principal Balance of the Class A-2 

Notes is reduced to zero, and then to principal payments on the Class B Notes 

then Outstanding until the Aggregate Principal Balance of the Class B Notes is 

reduced to zero (“Class A/B Coverage Prepayments”), in each case, without 

payment of any make-whole amount or redemption premium. See 

“Description of the Notes— Coverage Tests and Prepayments.” 

Class A/B Interest Coverage 

Test 

On any Calculation Date, a test that is satisfied if the ratio of (x) to (y) equals 

or exceeds 125%, where (x) is an amount (the “Interest Coverage Amount”) 

equal to the sum of (a) the aggregate amount of Interest Collections received 

during the related Due Period, plus (b) the amount on deposit in the Class A/B 

Reserve Account as of such Calculation Date, plus (c) any amounts received or 

due to be received from each Hedge Counterparty after the prior Payment Date 

(or Closing Date in the case of the first Payment Date) and on or before the 

related Payment Date, minus (d) any amounts paid or due to be paid to each 

Hedge Counterparty after the prior Payment Date (or Closing Date in the case 

of the first Payment Date) and on or before the related Payment Date, minus 

(e) the amount expected to be payable as Aggregate Fees and Expenses on the 

Payment Date immediately following such Calculation Date, and (y) is an 

amount equal to the sum of the Periodic Interest Amounts for the Class A 

Notes and Class B Notes for the related Payment Date. 

For purposes of calculating the Interest Coverage Amount, Interest Collections 

will not include any Deferred Interest on any Collateral Debt Securities. 

Class A/B Principal Coverage 

Test 

Class C Coverage Tests and 

Coverage Prepayments 


or exceeds 125%, where (x) is an amount (the “Principal Coverage Amount”) 

equal to the sum of (i) the amount of Principal Collections in the Principal 

Collection Account on such date, (ii) the Aggregate Principal Amount of (a) 

the Collateral Debt Securities (other than Defaulted Securities) and (b) Eligible 

Investments (other than Defaulted Securities) that represent Principal 

Collections, in each case in the Trust Estate on such Calculation Date and (iii) 

5% of the aggregate Principal Balance of all Defaulted Securities in the Trust 

Estate on such Calculation Date and (y) is the sum of the Aggregate Principal 

Amounts of the Class A Notes and Class B Notes then Outstanding as of such 

date. 

At any time that any of the Class C Notes are Outstanding, if either Class C 

Coverage Test described below is not satisfied as of the Calculation Date 

relating to any Payment Date (after giving effect to all prior payments to be 

made, in accordance with the Priority of Payments, to satisfy the Class A/B 

Coverage Tests), certain of the amounts that would otherwise be used on such 

Payment Date for payments on the Income Notes and certain expenses of the 

Co-Issuers if the Class C Coverage Tests were satisfied will instead be applied 

on such Payment Date in accordance with the Priority of Payments to principal 

payments on the Class A-1 Notes then Outstanding until such Class C 

Coverage Tests are satisfied or the Class A-1 Notes are paid in full, then to 

principal payments on the Class A-2 Notes then Outstanding until such Class C 

Coverage Tests are satisfied or the Class A-2 Notes are paid in full, then to 

principal payments on the Class B Notes then Outstanding until such Class C 

Coverage Tests are satisfied or the Class B Notes are paid in full, and when the 

Class A Notes and Class B Notes have been paid in full, to the extent 

necessary to satisfy the Class C Coverage Tests, to principal payments on the 

Class C-1 Notes and Class C-2 Notes then Outstanding, pro rata (based on the 

respective Aggregate Principal Amounts thereof), until such Class C Coverage 

Tests are satisfied or the Class C Notes are paid in full (“Class C Coverage 

Prepayments” and, together with the Class A/B Coverage Prepayments, 

11

Prepayments” and, together with the Class A/B Coverage Prepayments, 

“Coverage Prepayments”), in each case, without payment of any make-whole 

amount or redemption premium. See “Description of the Notes— Coverage 

Tests and Prepayments.” 

Class C Interest Coverage Test 

Class C Principal Coverage 

Test 

Security for the Notes 


or exceeds 105%, where (x) is the Interest Coverage Amount and (y) is an 

amount equal to the sum of (a) the Periodic Interest Amount for the Class A 

Notes for the related Payment Date, (b) the Periodic Interest Amount for the 

Class B Notes for the related Payment Date and (c) the Periodic Interest 

Amount for the Class C Notes for the related Payment Date. 

On any Calculation Date, a test which is satisfied if the ratio of (x) to (y) 

equals or exceeds 102.1%, where (x) is the Principal Coverage Amount and (y) 

is the sum of (a) the Aggregate Principal Amount of the Class A Notes then 

Outstanding (after giving effect to any Coverage Prepayments to be made on 

the Class A Notes on the related Payment Date as a result of the application of 

the Class A/B Coverage Tests), (b) the Aggregate Principal Amount of the 

Class B Notes then Outstanding (after giving effect to any Coverage 

Prepayments to be made on the Class B Notes on the related Payment Date as a 

result of the application of the Class A/B Coverage Tests) and (c) the 

Aggregate Principal Amount of the Class C Notes then Outstanding. 

The Notes will be secured by the Trust Estate. The Trust Estate will generally 

consist of all money, instruments and other property and rights subject to the 

lien of the Indenture and all proceeds thereof, including the Collateral Debt 

Securities, the Guarantees, the Eligible Investments, the Class A/B Reserve 

Account, the Expense Reserve Account, the Interest Collection Account, the 

Principal Collection Account, the Semiannual Receipts Account, each Hedge 

Counterparty Collateral Account and the Issuer’s rights under each Hedge 

Agreement and the Collateral Management Agreement. Payments received by 

the Issuer in respect of the Collateral Debt Securities and the Hedge 

Agreements will be the only source of payments on the Notes. 

“Collateral Debt Securities” consist of (i) capital securities (the “Bank Capital 

Securities”) issued by wholly owned trust subsidiaries (each, a “Bank Capital 

Securities Issuer”) of bank holding companies, thrift holding companies or 

holding companies of other depository institutions (each, an “Affiliated 

Depository Institution”), (ii) subordinated notes (the “Bank Subordinated 

Notes”) issued by banks, thrifts or other depository institutions or holding 

companies of banks, thrifts or other depository institutions (each, a “Bank 

Subordinated Note Issuer”), (iii) capital securities (the “Insurance Capital 

Securities” and, together with the Bank Capital Securities, the “Capital 

Securities”) issued by wholly owned trust subsidiaries (each, an “Insurance 

Capital Securities Issuer” and, together with the Bank Capital Securities 

Issuers, the “Capital Securities Issuers”) of an insurance holding company and 

an insurance related company (each, an “Affiliated Insurance Institution”) and 

(iv) a surplus note (the “Insurance Surplus Note”) issued by an insurance 

company (the “Insurance Surplus Note Issuer”). See “Security for the Notes.” 

The Collateral Debt Securities will each have different coupon rates, accrual 

periods, call dates and prices, events permitting redemption, maturity dates and 

other terms. 

On the Closing Date, the Issuer will purchase Collateral Debt Securities with a 

Principal Balance of U.S.$300,000,000 from Greenwich Capital Financial 

Products, Inc., an Affiliate of Greenwich Capital Markets, Inc. (in such 

capacity, the “Warehouse Provider”), one of the Initial Purchasers and 

Placement Agents. In each case, the Warehouse Provider will have purchased 

12

Placement Agents. In each case, the Warehouse Provider will have purchased 

the Collateral Debt Securities in transactions in which Sandler O’Neill & 

Partners, L.P. was acting as placement agent in primary market transactions or 

as broker or dealer in secondary market transactions, and may have earned a 

fee or commission in connection with such transactions. See “Risk Factors— 

Potential Conflicts of Interest— Conflicts of Interest Involving the Initial 

Purchasers and Placement Agents” and “—Purchase of Collateral Debt 

Securities; Warehouse Arrangements.” No Collateral Debt Securities will be 

acquired by the Issuer after the Closing Date. The proceeds from any sales of 

Collateral Debt Securities (and other Collections received with respect to the 

Collateral Debt Securities) will be reinvested in Eligible Investments maturing 

on or prior to the Payment Date following receipt thereof and are required to 

be distributed on such following Payment Date in accordance with the Priority 

of Payments. 

The Capital Securities 

The Capital Securities will have the characteristics and will meet the criteria 

described under the heading “Security for the Notes— Portfolio Limitations.” 

Each Capital Securities Issuer has used or will use the proceeds of the sale of 

its Capital Securities to purchase junior subordinated debt securities (in each 

case, the “Corresponding Debentures”) issued by its Affiliated Depository 

Institution or Affiliated Insurance Institution, as the case may be. Each Capital 

Securities Issuer’s only source of cash to make payments on the Capital 

Securities will be payments it receives from the Corresponding Debentures it 

holds. Payments on each Capital Securities Issuer’s Capital Securities are 

guaranteed by its Affiliated Depository Institution or Affiliated Insurance 

Institution, as the case may be, to the extent described herein. See “Security 

for the Notes— Description of the Bank Capital Securities— Terms of the 

Guarantees” and “Security for the Notes— Description of the Insurance Capital 

Securities— Terms of the Guarantees.” 

Distributions on the Capital Securities are payable quarterly or semiannually in 

arrears on their respective payment dates in each year. Upon the occurrence of 

certain events, distributions on the Capital Securities may be deferred for up to 

five consecutive annual periods or equivalent semiannual or quarterly periods, 

after which all distributions become due and payable. See “Security for the 

Notes— Description of the Bank Capital Securities— Terms of the Bank 

Capital Securities— Distributions” and “Security for the Notes— Description of 

the Insurance Capital Securities— Terms of the Insurance Capital Securities— 

Distributions.” 

The Capital Securities issued by each Capital Securities Issuer will be 

redeemed when the Corresponding Debentures issued by its Affiliated 

Depository Institution or Affiliated Insurance Institution, as the case may be, 

are paid on their respective maturity dates or upon earlier dates of redemption 

of such Corresponding Debentures. Generally, the Corresponding Debentures 

may be redeemed, at the option of the applicable Affiliated Depository 

Institution or Affiliated Insurance Institution, as the case may be, (a) in whole 

or in part at the Optional Redemption Price on or after their respective initial 

optional redemption dates or (b) in whole within 90 days following the 

occurrence of a Bank Capital Securities Special Event or an Insurance Capital 

Securities Special Event, as applicable, at the Special Redemption Price, plus, 

in the case of both clause (a) and clause (b), accrued and unpaid interest to the 

redemption date. The right of an Affiliated Depository Institution to redeem its 

Corresponding Debentures is subject to receipt of prior approval from the 

Applicable Regulator, if then required under applicable regulatory capital 

guidelines or policies of the Applicable Regulator. See “Security for the 

Notes— Description of the Bank Capital Securities— Terms of the Bank 

Capital Securities— Redemption and Prepayments” and “Security for the 

13

Capital Securities— Redemption and Prepayments” and “Security for the 

Notes— Description of the Insurance Capital Securities— Terms of the 

Insurance Capital Securities— Redemption and Prepayments.” 

Each Affiliated Depository Institution or Affiliated Insurance Institution, as the 

case may be, has the right at any time to dissolve its subsidiary Capital 

Securities Issuer (including without limitation upon the occurrence of a Bank 

Capital Securities Special Event or an Insurance Capital Securities Special 

Event, as applicable), subject, among other things, to the receipt, in the case of 

Affiliated Depository Institutions, of prior approval from the Applicable 

Regulator, if then required under applicable regulatory capital guidelines or 

policies of the Applicable Regulator, and after satisfaction of such Capital 

Securities Issuer’s liabilities to its creditors, and to cause the Corresponding 

Debentures held by such Capital Securities Issuer to be distributed to the 

holder of the Capital Securities (which will be the Issuer). In such event, such 

Corresponding Debentures will become “Collateral Debt Securities” and will 

be treated as if they were the related Capital Securities. 

Bank Subordinated Notes 

The Bank Subordinated Notes will have the characteristics and will meet the 

criteria described under the heading “Security of the Notes— Portfolio 

Limitations.” 

Distributions are payable on the Bank Subordinated Notes quarterly or 

semiannually in arrears on their respective payment dates in each year. See 

“Security for the Notes— Description of the Bank Subordinated Notes— 

Interest.” 

Bank Subordinated Notes will be repaid at their maturity and one of the Bank 

Subordinated Notes may be redeemed, at the option of the related Bank 

Subordinated Note Issuer, (i) in whole at any time within 90 days following the 

occurrence of a Bank Subordinated Note Special Event at the Special 

Redemption Price and (ii) in whole or in part at the Optional Redemption Price 

on or after their respective initial optional redemption dates plus, in each case, 

accrued and unpaid interest to the redemption date. The right of the Bank 

Subordinated Note Issuer to redeem its Bank Subordinated Notes is subject to 

receipt of prior approval from the Applicable Regulator, if then required under 

applicable regulatory capital guidelines or policies of the Applicable 

Regulator. See “Security for the Notes— Description of the Bank Subordinated 

Notes— Redemption and Prepayments.” 

Insurance Surplus Note 

The Insurance Surplus Note will have the characteristics and will meet the 

criteria described under the heading “Security of the Notes— Portfolio 

Limitations.” 

Distributions are payable on the Insurance Surplus Note quarterly in arrears on 

its payment dates in each year. See “Security for the Notes— Description of 

the Insurance Surplus Note— Interest.” 

The Insurance Surplus Note will be repaid at its maturity and may be 

redeemed, at the option of the Insurance Surplus Note Issuer, in whole at any 

time within 90 days following the occurrence of an Insurance Surplus Note 

Special Event at the Special Redemption Price or in whole or in part at the 

Optional Redemption Price on or after its initial optional redemption date plus, 

in each case, accrued and unpaid interest to the redemption date. In each case, 

the right of the Insurance Surplus Note Issuer to redeem its Insurance Surplus 

Note is subject to the satisfaction of any applicable Payment Restrictions. See 

14

“Security for the Notes— Description of the Insurance Surplus Note— Interest” 

and “—Maturity; Redemption.” 

The payment of interest, premium, if any, and principal under the Insurance 

Surplus Note is at all times subject to the Insurance Surplus Note Issuer’s 

satisfaction of all applicable Payment Restrictions. See “Security for the 

Notes Description of the Insurance Surplus Note— Interest.” 

Collection Accounts 

All Interest Collections (except for prepayment premiums, if any, received in 

connection with an optional redemption or a Special Event redemption of the 

Collateral Debt Securities and amounts deposited in the Semiannual Receipts 

Account) will be remitted to the Trustee and deposited into a separate trust 

account (the “Interest Collection Account”) and will be available, to the extent 

described herein, for application in the manner and for the purposes described 

herein. All Principal Collections will be remitted to the Trustee and deposited 

into a separate trust account (the “Principal Collection Account”) and will be 

available, to the extent described herein, for application in the manner and for 

the purposes described herein. The Interest Collection Account and the 

Principal Collection Account are referred to herein collectively as the 

“Collection Accounts.” Funds held in the Collection Accounts will be invested 

as promptly as practicable in Eligible Investments maturing prior to the next 

Payment Date, and will be distributed on such Payment Date in accordance 

with the Priority of Payments. 

“Interest Collections,” as of any date of determination, will equal the sum of (i) 

all payments of interest with respect to any Collateral Debt Securities 

(excluding all amounts received on Defaulted Securities) in the Trust Estate 

(including all receipts of accrued interest, as well as all payments (other than 

principal or premiums) received pursuant to a consent or similar solicitation), 

and other amounts specified in the Indenture to be Interest Collections, that in 

each case were received during the related Due Period, but excluding any such 

payments of interest deposited into the Semiannual Receipts Account during 

such Due Period pursuant to the Indenture, (ii) all amounts transferred from the 

Semiannual Receipts Account to the Interest Collection Account on the first 

Business Day of such Due Period pursuant to the Indenture, (iii) the 

reinvestment income, if any, in the Collection Accounts which is received 

during such Due Period, (iv) all amendment and waiver fees, all late payment 

fees, all commitment fees and all other fees and commissions received during 

such Due Period (other than fees and commissions received in connection with 

the purchase of Collateral Debt Securities), (v) all amounts received in 

connection with the Hedge Agreements other than amounts applied or to be 

applied to enter into replacement Hedge Agreements, (vi) the Shortfall Amount 

transferred from the Class A/B Reserve Account to the Interest Collection 

Account for such Payment Date, (vii) on the first Payment Date after the 

Aggregate Principal Amounts of the Class A Notes and the Class B Notes have 

been reduced to zero, all amounts on deposit in the Class A/B Reserve 

Account, (viii) on the first Payment Date after the reduction of the Principal 

Balance of the Collateral Debt Securities to zero, all amounts on deposit in the 

Expense Reserve Account and (ix) after the Class A/B Reserve Account is 

closed, any prepayment premiums received in connection with a redemption of 

Collateral Debt Securities. 

“Principal Collections,” with respect to any date of determination, will equal 

the sum, without duplication, of (i) all payments representing all or a portion of 

the Principal Balance of any Collateral Debt Securities in the Trust Estate 

which are received during the related Due Period (including principal 

recoveries with respect to defaulted Collateral Debt Securities), (ii) the 

aggregate Principal Balance of any Collateral Debt Securities received in 

15

aggregate Principal Balance of any Collateral Debt Securities received in 

connection with an optional redemption or a Special Event redemption, as 

applicable, of such Collateral Debt Securities, (iii) any other receipts on 

Collateral Debt Securities which are not included in Interest Collections, but 

excluding any prepayment premiums received in connection with a redemption 

of the Collateral Debt Securities deposited or to be deposited into the Class 

A/B Reserve Account and any payments of interest deposited into the 

Semiannual Receipts Account, (iv) all Sale Proceeds (exclusive of accrued 

interest) and (v) all amounts received on Defaulted Securities. 

Class A/B Reserve Account 

The Trustee will establish a separate trust account designated as the Class A/B 

Reserve Account (the “Class A/B Reserve Account”). Amounts on deposit in 

the Class A/B Reserve Account will be invested in Eligible Investments and 

applied in accordance with the Priority of Payments. All reinvestment income, 

if any, received in respect of funds in, and investments credited to, the Class 

A/B Reserve Account will remain credited to the Class A/B Reserve Account 

subject to the terms hereof. 

In accordance with clause (a)(xii) of the Priority of Payments, (i) on each 

Payment Date on and prior to the Payment Date in September 2008 and on 

which any Class A Notes or Class B Notes remain Outstanding, remaining 

Interest Collections in an amount up to U.S.$41,667, (which funds would 

otherwise potentially be available for distributions in respect to the Income 

Notes), will instead be deposited into the Class A/B Reserve Account, and (ii) 

on each Payment Date after such Payment Date in September 2008 on which 

any Class A Notes or Class B Notes remain Outstanding and the balance in the 

Class A/B Reserve Account is less than U.S.$500,000 (including all 

reinvestment income credited thereto), 5% of all remaining Interest Collections 

that would otherwise be available for distributions on the Income Notes will 

instead be deposited into the Class A/B Reserve Account, in each case, until 

the amount on deposit therein equals U.S.$500,000 (including all reinvestment 

income credited thereto). 

Until such time as the Class A/B Reserve Account is closed, all Collections 

constituting prepayment premiums received in connection with a redemption 

of the Collateral Debt Securities will be remitted to the Trustee and will be 

deposited into the Class A/B Reserve Account. 

On each Payment Date on which any Class A Notes or Class B Notes are 

Outstanding, funds on deposit in the Class A/B Reserve Account in an amount 

equal to the Shortfall Amount will be transferred to the Interest Collection 

Account for application as Interest Collections in accordance with the Priority 

of Payments. Accordingly, amounts in the Class A/B Reserve Account will be 

available on any Payment Date to pay certain expenses of the Co-Issuers, and 

then to pay Periodic Interest on the Class A-1 Notes, and then to pay Periodic 

Interest on the Class A-2 Notes, and then to pay Periodic Interest on the Class 

B Notes, in each case to the extent Interest Collections are insufficient therefor 

on such Payment Date. After the Aggregate Principal Amounts of the Class A 

Notes and Class B Notes have been reduced to zero, amounts in the Class A/B 

Reserve Account will be distributed as Interest Collections in accordance with 

the Priority of Payments and the Class A/B Reserve Account will be closed. 

See “Description of the Notes— Priority of Payments.” 

16

Expense Reserve Account 

The Trustee will establish a separate trust account designated as the Expense 

Reserve Account (the “Expense Reserve Account”), which will be funded on 

the Closing Date using amounts received from the issuance and sale of the 

Notes and the Upfront Payment. 

In accordance with clauses (a)(i) and (b)(i) of the Priority of Payments, on each 

Payment Date on which the amount on deposit in the Expense Reserve 

Account (including all reinvestment income credited thereto) is not at least 

U.S.$50,000, Available Funds that would otherwise be available for 

distributions on the Notes will instead be deposited into the Expense Reserve 

Account until the amount on deposit therein (including all reinvestment 

income credited thereto) equals U.S.$50,000. The Trustee will, from time to 

time, apply the amounts in the Expense Reserve Account to pay 

Administrative Expenses of the Co-Issuers which become due on any date 

other than a Payment Date. 

Semiannual Receipts Account 

The Trustee 

Hedge Agreements 

Independent Accountants 

The Administrator 

Listing and General 

Information 

The Trustee will establish a separate trust account designated as the 

semiannual receipts account (the “Semiannual Receipts Account”). Fifty 

percent (50%) of all interest payments received during each Due Period with 

respect to any Collateral Debt Securities under which distributions are payable 

semiannually (including all related receipts of accrued interest, as well as all 

payments (other than principal or premiums) received pursuant to consents or 

similar solicitations) will be deposited into the Semiannual Receipts Account 

rather than the Collection Account. All amounts credited to the Semiannual 

Receipts Account in a given Due Period will be withdrawn therefrom, and 

deposited into the Interest Collection Account, on the first Business Day of the 

immediately following Due Period. 

JPMorgan Chase Bank, National Association will be the Trustee under the 

Indenture. 

On the Closing Date, the Issuer will enter into two interest rate hedge 

agreements (such agreements, and any replacements therefor entered into in 

accordance with the Indenture, the “Hedge Agreements”) with Coöperatieve 

Centrale Raiffeisen-Boerenleenbank B.A. (the initial “Hedge Counterparty”) 

consisting of an interest rate swap and an interest rate cap. The Hedge 

Agreements are intended to (i) reduce the impact of an interest rate mismatch 

between (x) the floating rate at which interest accrues on the Class A Notes, 

Class B Notes and Class C-1 Notes and the fixed rate at which interest accrues 

on the Class C-2 Notes on the one hand and (y) the fixed and floating rates at 

which interest accrues on the Collateral Debt Securities on the other, and (ii) 

mitigate exposure to changes in interest rates. See “Description of the Hedge 

Agreements.” 

Deloitte & Touche LLP will periodically perform certain procedures relating to 

the Collateral Debt Securities in the Trust Estate as required by the Indenture. 

Maples Finance Limited will act as administrator (in such capacity, the 

“Administrator”) and will perform certain administrative services for the 

Issuer. 

Application has been made to the Irish Financial Services Regulatory 

Authority, as competent authority under Directive 2003/71/EC (the 

“Prospectus Directive”), for the Prospectus to be approved. Application has 

been made to the Irish Stock Exchange (the “ISE”) for the Notes to be 

admitted to the Official List and trading on its regulated market, but there can 

be no assurance that such listing will be granted. The issuance, sale and 

17

settlement of the Notes on the Closing Date is not conditioned on the listing of 

the Notes on the ISE. See “Listing and General Information.” 

Certain Tax Consequences 

Certain ERISA Considerations 

Legal Investment 

For a discussion of certain income tax consequences to purchasers of the 

Notes, see “Income Tax Considerations” herein. 

For a discussion of certain ERISA consequences to purchasers of the Notes, 

see “Certain ERISA Considerations” herein. 

Institutions whose investment activities are subject to legal investment laws 

and regulations or to review by certain regulatory authorities may be subject to 

restrictions on investment in the Notes. See “Certain Legal Investment 

Considerations.” 

Ratings It is a condition to the issuance of the Notes that the Class A-1 and Class A-2 

Notes each be rated “Aaa” by Moody’s, “AAA” by Fitch and “AAA” by S&P, 

that the Class B Notes each be rated at least “Aa2” by Moody’s, at least “AA” 

by S&P and at least “AA” by Fitch and that the Class C-1 Notes and the Class 

C-2 Notes each be rated at least “A2” by Moody’s and at least “A” by Fitch. 

The ratings of the Class A Notes, Class B Notes and Class C Notes address 

timely payment of interest and ultimate payment of principal (in the case of the 

Class C-1 Notes and Class C-2 Notes, the addition of Class C-1 Note Deferred 

Interest and Class C-2 Note Deferred Interest to the principal balance of the 

Class C-1 Notes and the Class C-2 Notes, respectively, as described herein 

rather than the payment of interest in cash is not a failure to timely pay interest 

on the Class C-1 Notes or the Class C-2 Notes). 

The Income Notes will not be rated by any rating agency. 

A security rating is not a recommendation to buy, sell or hold securities and 

may be subject to revision or withdrawal at any time by the assigning rating 

agency. In the event that a rating initially assigned to the Class A Notes, Class 

B Notes or Class C Notes is subsequently lowered or withdrawn for any 

reason, no person or entity is obligated to provide any additional support or 

credit enhancement with respect to the Notes. 

18

RISK FACTORS 

Prospective Noteholders should consider, among other things, the following factors in connection with the 

purchase of the Notes. 

1. Non-recourse Obligations. The Class A Notes, Class B Notes and Class C Notes will be non-recourse 

obligations of the Co-Issuers, and the Income Notes will be non-recourse obligations of the Issuer, in each case 

payable solely from the Trust Estate (including the Collateral Debt Securities pledged to secure the Notes). The 

Issuer, as a special purpose company, will have no significant assets other than the Collateral Debt Securities, the 

Class A/B Reserve Account, the Expense Reserve Account, the Interest Collection Account, the Principal Collection 

Account, the Semiannual Receipts Account, any Hedge Counterparty Collateral Account and its interest in the 

Hedge Agreements and the Collateral Management Agreement. The Co-Issuer will have no significant assets. 

Except for the Co-Issuers, no person or entity will be obligated to make any payments on the Notes. The Notes are 

not deposits or other obligations of any bank or other depository institution or any insurance company and are not 

insured by the Federal Deposit Insurance Corporation (the “FDIC”), any insurance guaranty fund, any insurance 

regulatory authority or any governmental agency or instrumentality thereof. Consequently, Noteholders must rely 

solely upon collections on the Collateral Debt Securities for the payment of amounts payable in respect of the Notes. 

If collections on the Collateral Debt Securities are insufficient to make payments on the Notes, no other assets of the 

Issuer or any other person or entity will be available for the payment of the deficiency and, following liquidation of 

all of the Collateral Debt Securities, the obligations of the Co-Issuers to pay such deficiency will be extinguished. 

2. Risks Related to Banks, Thrifts, Insurance Companies and the Banking and Insurance Industries. 

Payments under the Collateral Debt Securities, and in turn under the Notes, are highly dependent upon payments 

received from (i) the Affiliated Depository Institutions and the Affiliated Insurance Institutions and their respective 

subsidiaries, (ii) the Bank Subordinated Note Issuers and (iii) the Insurance Surplus Note Issuer. As such, the ability 

of the Issuer and Co-Issuer to make payments under the Notes, as well as the credit ratings of the Notes, may be 

adversely affected by the performance and earnings of and defaults and deferrals by such entities. Furthermore, 

adverse developments with respect to the banking and thrift industry or the insurance industry, as the case may be, in 

general may adversely affect the ability of the Issuer and the Co-Issuer to make payments under the Notes and may 

also adversely affect the rating, market value and/or liquidity of the Notes. 

3. Nature of the Bank Capital Securities and Corresponding Debentures. Each Bank Capital Securities 

Issuer’s only source of cash to make payments on its Bank Capital Securities will be payments it receives from its 

parent Affiliated Depository Institution on its Corresponding Debentures. The obligations of each Affiliated 

Depository Institution under its Guarantee and its Corresponding Debentures are unsecured and subordinate and 

junior in right of payment to all present and future Senior Indebtedness of such Affiliated Depository Institution. No 

payment of principal of or premium, if any, or interest on any Corresponding Debenture may be made if (i) any 

Senior Indebtedness of the issuing Affiliated Depository Institution is not paid when due and any applicable grace 

period with respect to such default has ended with such default not having been cured or waived or ceasing to exist 

or (ii) the maturity of any Senior Indebtedness of the issuing Affiliated Depository Institution has been accelerated 

because of a default and such acceleration has not been rescinded or cancelled. In the event of the bankruptcy, 

liquidation or dissolution of an Affiliated Depository Institution, its assets would be available to pay obligations 

under the Corresponding Debentures only after all payments have been made on its Senior Indebtedness. Any 

Affiliated Depository Institution or any subsidiary of any Affiliated Depository Institution may incur additional 

indebtedness, liabilities and obligations (including Senior Indebtedness), which may consist of other debt securities 

issued by such Affiliated Depository Institution related to preferred securities of other subsidiaries of such Affiliated 

Depository Institution, and other indebtedness ranking senior to the related Corresponding Debentures to the extent 

of any collateral securing such other indebtedness. In addition, Affiliated Depository Institutions may be parties to 

agreements with holders of Senior Indebtedness that have the practical effect of further subordinating the rights of 

holders of the related Corresponding Debentures to such holders of Senior Indebtedness under certain 

circumstances. See “Security for the Notes— Description of the Bank Capital Securities— Terms of the Guarantees” 

and “—Terms of the Corresponding Debentures— Subordination.” 

The holders of the Bank Capital Securities will not be able to enforce directly any remedies available to 

holders of the Corresponding Debentures other than in respect of a default that is attributable to a payment default 

19

y the applicable Affiliated Depository Institution under its Corresponding Debentures. See “Security for the 

Notes— Description of the Bank Capital Securities— Effect of Obligations Under the Bank Capital Securities, the 

Corresponding Debentures and the Guarantees.” Upon the bankruptcy, liquidation or dissolution of an Affiliated 

Depository Institution, and subject to the applicable subordination provisions, generally payment of the principal of 

and unpaid interest on the Corresponding Debentures of such Affiliated Depository Institution may be accelerated 

by the holders of not less than 25% in aggregate principal amount of such Corresponding Debentures and, in certain 

cases, such acceleration is automatic. However, in the case of U.S.$112,330,000 aggregate Principal Balance of 

Bank Capital Securities relating to Corresponding Debentures, holders of Corresponding Debentures will not have 

any right to accelerate payment on account of a payment default thereon or breach in the performance of any other 

covenant contained in such Corresponding Debentures or the related Affiliated Depository Institution Indenture 

other than on account of a default in the payment of interest following nonpayment of interest for five consecutive 

annual periods or equivalent semiannual or quarterly periods, while, in the case of U.S.$146,670,000 aggregate 

Principal Balance of Bank Capital Securities, holders will have the right to accelerate payment on account of a 

payment default or certain covenant breaches. Furthermore, the Issuer may own less than 100% of the Principal 

Balance of the Bank Capital Securities of any individual Bank Capital Securities Issuer and therefore may not be 

able to control any matters as to which holders thereof are entitled to vote, give their consent or take action. 

None of the Corresponding Debentures or the Bank Capital Securities are deposits or other obligations of 

any bank, thrift or other depository institution or are insured by the FDIC or any governmental agency or 

instrumentality thereof. Since each Affiliated Depository Institution is a holding company, its ability to make 

payments on its Corresponding Debentures and satisfy its other obligations will be highly dependent upon the 

earnings of, and the receipt of, dividends, fees, loans and distributions from, its subsidiaries. The subsidiaries of 

each Affiliated Depository Institution are separate and distinct legal entities and have no obligation, contingent or 

otherwise, to pay amounts due on the related Corresponding Debentures or Guarantee or to make funds available 

therefor. There are also various statutory, contractual and regulatory limitations and business considerations on the 

extent, if any, to which the subsidiaries of an Affiliated Depository Institution may extend credit, pay dividends or 

otherwise supply funds to such Affiliated Depository Institution or Affiliates thereof. In addition, the right of each 

Affiliated Depository Institution to participate in any distribution of assets of any subsidiary upon liquidation, 

reorganization or otherwise will be subject to the prior claims of the creditors (including any depositors) and 

preferred equity holders of such subsidiary, except to the extent that such Affiliated Depository Institution is 

recognized as a creditor of such subsidiary. Accordingly, each Affiliated Depository Institution’s Corresponding 

Debentures and Guarantee will effectively be subordinated to all existing and future liabilities and preferred equity 

of such Affiliated Depository Institution’s subsidiaries. 

As long as (i) in the case of U.S.$146,670,000 aggregate Principal Balance of Bank Capital Securities, no 

event of default has occurred and is continuing or (ii) in the case of U.S.$112,330,000 aggregate Principal Balance 

of Bank Capital Securities, certain events of default have not occurred and are continuing, including bankruptcy, 

insolvency or similar proceedings with respect to the related Affiliated Depository Institution, such Affiliated 

Depository Institution may generally defer interest payments on its Corresponding Debentures for up to five 

consecutive annual periods or equivalent semiannual or quarterly periods, in which event distributions on the Bank 

Capital Securities would be similarly deferred. Any Bank Capital Securities with respect to which interest payments 

are being deferred will be deemed to be a “Defaulted Security” under the Indenture even though such deferral is 

permitted by the terms of such Bank Capital Securities and the Corresponding Debentures. 

Prospective purchasers of the Notes should consider and assess for themselves the likely level of defaults, 

the likely level and timing of recoveries on the Bank Capital Securities in the Trust Estate, and the likely levels of 

interest rates during the term of the Notes. 

Certain criteria relating to the Affiliated Depository Institutions sponsoring the Bank Capital Securities will 

be required to be met as of the Closing Date (or the date of the acquisition by the Issuer, as the case may be). 

However, such Affiliated Depository Institutions are under no obligation to maintain such criteria after such date 

and none of the Affiliated Depository Institutions, the Initial Purchasers, the Placement Agents or the Collateral 

Manager makes any representations to the contrary. Prospective purchasers of the Notes should consider and assess 

for themselves the nature, financial condition, results of operations, cash flows, business and prospects of each of the 

Affiliated Depository Institutions and their respective operating subsidiaries (which may include all permissible 

activities for such subsidiaries) prior to making an investment in the Notes. 

20

4. Nature of the Bank Subordinated Notes. The obligations of each Bank Subordinated Note Issuer under its 

Bank Subordinated Notes are unsecured and subordinate and junior in right of payment to all present and future 

Senior Indebtedness of such Bank Subordinated Note Issuer. No payment of principal of or premium, if any, or 

interest on any Bank Subordinated Note, and no redemption, exchange, retirement, purchase or other acquisition of 

any Bank Subordinated Note, may be made if (i) any Senior Indebtedness of the issuing Bank Subordinated Note 

Issuer has not been paid when due and any applicable grace period with respect to such default has ended with such 

default not having been cured or waived or ceasing to exist or (ii) the maturity of any Senior Indebtedness of the 

issuing Bank Subordinated Note Issuer has been accelerated because of a default and such acceleration has not been 

rescinded or cancelled. In the event of the bankruptcy, liquidation or dissolution of a Bank Subordinated Note 

Issuer, its assets would be available to pay obligations under its Bank Subordinated Notes only after all payments 

have been made on its Senior Indebtedness. Any Bank Subordinated Note Issuer or any subsidiary of any Bank 

Subordinated Note Issuer may incur additional indebtedness, liabilities and obligations, including Senior 

Indebtedness and other indebtedness ranking senior to the related Bank Subordinated Notes to the extent of the 

collateral securing the same. In addition, Bank Subordinated Note Issuers may be parties to agreements with holders 

of Senior Indebtedness that have the practical effect of further subordinating the rights of holders of the related Bank 

Subordinated Notes to such holders of Senior Indebtedness under certain circumstances. See “Security for the 

Notes— Description of the Bank Subordinated Notes— Subordination.” 

Upon the bankruptcy, liquidation or dissolution of a Bank Subordinated Note Issuer, and subject to the 

applicable subordination provisions, generally the principal of and unpaid interest on the Bank Subordinated Notes 

of such Bank Subordinated Note Issuer may be accelerated by the holders of not less than 25% in aggregate 

principal amount of such Bank Subordinated Notes with the approval of the Applicable Regulator, if required. 

However, holders of Bank Subordinated Notes will not have any right to accelerate payment in the case of a default 

of principal thereof or premium or interest thereon or breach in the performance of any other covenant contained in 

such Bank Subordinated Notes or the related Bank Subordinated Note Indenture. Furthermore, the Issuer may own 

less than 100% of the Principal Balance of the Bank Subordinated Notes of any individual Bank Subordinated Note 

Issuer and therefore may not be able to control any matters as to which holders thereof are entitled to vote, give their 

consent or take action. 

None of the Bank Subordinated Notes are deposits or are insured by the FDIC or any governmental agency 

or instrumentality thereof. 


the likely level and timing of recoveries on the Bank Subordinated Notes in the Trust Estate, and the likely levels of 


Certain criteria relating to the Bank Subordinated Note Issuers issuing the Bank Subordinated Notes will be 

required to be met as of the Closing Date (or the date of the acquisition by the Issuer, as the case may be). However, 

such Bank Subordinated Note Issuers are under no obligation to maintain such criteria after such date and none of 

the Bank Subordinated Note Issuers, the Initial Purchasers, the Placement Agents or the Collateral Manager makes 

any representations to the contrary. 

Prospective purchasers of the Notes should consider and assess for themselves the nature, financial 

condition, results of operations, cash flows, business and prospects of each of the Bank Subordinated Note Issuers 

and their subsidiaries prior to making an investment in the Notes. 

5. Nature of Insurance Capital Securities and Corresponding Debentures. Each Insurance Capital Securities 

Issuer’s only source of cash to make payments on its Insurance Capital Securities will be payments it receives from 

its parent Affiliated Insurance Institution on its Corresponding Debentures or, if applicable, from an Affiliated 

Insurance Institution Parent under the Parent Guarantee. The obligations of an Affiliated Insurance Institution under 

its Corresponding Debentures and, if applicable, Guarantee are unsecured and subordinate and junior in right of 

payment to all present and future Senior Indebtedness of such Affiliated Insurance Institution. In one instance, an 

Affiliated Insurance Institution Parent executed the Parent Guarantee and the Guarantee and its obligations 

thereunder are unsecured and subordinate and junior in right of payment to all present and future Senior 

Indebtedness of such Affiliated Insurance Institution Parent. No payment of principal of or premium, if any, or 

interest on any Corresponding Debenture may be made if (i) any Senior Indebtedness of the issuing Affiliated 

21

Insurance Institution is not paid when due and any applicable grace period with respect to such default has ended 

with such default not having been cured or waived or ceasing to exist or (ii) the maturity of any Senior Indebtedness 

of the issuing Affiliated Insurance Institution has been accelerated because of a default and such acceleration has not 

been rescinded or cancelled. Similar limitations apply to the Affiliated Insurance Institution Parent in respect of the 

Parent Guarantee. In the event of the bankruptcy, liquidation or dissolution of an Affiliated Insurance Institution or 

an Affiliated Insurance Institution Parent, its assets would be available to pay obligations under the Corresponding 

Debentures or the Parent Guarantee, as applicable, only after all payments have been made on its Senior 

Indebtedness. The Affiliated Insurance Institution or any subsidiary of such Affiliated Insurance Institution may 

incur additional indebtedness, liabilities and obligations (including Senior Indebtedness), which may consist of other 

debt securities issued by such Affiliated Insurance Institution related to preferred securities of other subsidiaries of 

such Affiliated Insurance Institution and other indebtedness ranking senior to the Corresponding Debentures to the 

extent of any collateral securing such other indebtedness. In addition, the Affiliated Insurance Institution may be a 

party to agreements with holders of its Senior Indebtedness that have the practical effect of further subordinating the 

rights of holders of the Corresponding Debentures to such holders of Senior Indebtedness under certain 

circumstances. An Affiliated Insurance Institution Parent may also incur additional indebtedness, liabilities and 

obligations and be a party to such agreements. See “Security for the Notes— Description of the Insurance Capital 

Securities— Terms of the Corresponding Debentures— Subordination” and “—Description of the Insurance Capital 

Securities— Terms of the Guarantees.” 

The holders of the Insurance Capital Securities will not be able to enforce directly any remedies available 

to holders of the Corresponding Debentures other than in respect of a default that is attributable to a payment default 

by the applicable Affiliated Insurance Institution under its Corresponding Debentures. See “Security for the 

Notes— Description of the Insurance Capital Securities— Effect of Obligations Under the Insurance Capital 

Securities, the Corresponding Debentures and the Guarantees.” Upon the bankruptcy, liquidation or dissolution of 

an Affiliated Insurance Institution and in certain other circumstances, and subject to the applicable subordination 

provisions, generally payment of the principal of and unpaid interest on the Corresponding Debentures of such 

Affiliated Insurance Institution may be accelerated by the holders of not less than 25% in aggregate principal 

amount of such Corresponding Debentures and, in one case, such acceleration is automatic. Furthermore, the Issuer 

may own less than 100% of the Principal Balance of any individual Insurance Capital Securities of the Insurance 

Capital Securities Issuer and therefore may not be able to control any matters as to which holders thereof are entitled 

to vote, give their consent or take action. 

None of the Corresponding Debentures are insured or guaranteed by any insurance regulatory authority, 

any governmental agency or instrumentality or any insurance guaranty fund. The ability of Affiliated Insurance 

Institutions that are holding companies to make payments on its Corresponding Debentures and to satisfy its other 

obligations will be highly dependent upon the earnings of, and the receipt of dividends, fees, loans or distributions 

from, its subsidiaries, including its insurance company subsidiaries. The subsidiaries of each Affiliated Insurance 

Institution are separate and distinct legal entities and have no obligation, contingent or otherwise, to pay any 

amounts under the related Corresponding Debentures, Guarantee or, if applicable, Parent Guarantee or to make any 

funds available therefor, whether by dividends, loans or other payments. There are also various statutory, 

contractual and regulatory limitations and business considerations on the extent, if any, to which an Affiliated 

Insurance Institution’s insurance company subsidiaries may extend credit, pay dividends or otherwise supply funds 

to such Affiliated Insurance Institution or Affiliates thereof. In particular, payments of dividends or other 

distributions to an Affiliated Insurance Institution or its Affiliates by such Affiliated Insurance Institution’s U.S. 

domiciled insurance company subsidiaries are subject to the various insurance regulatory restrictions of the states 

having jurisdiction over such insurance company subsidiaries. Such laws typically vary from state to state. Certain 

states generally require that any statutory surplus following any dividend or distribution be reasonable in relation to 

such subsidiary’s outstanding liabilities and adequate to meet its financial needs and permit the payment of 

dividends only out of earned (unassigned), as opposed to contributed, statutory surplus. In addition, many states 

prohibit an insurance company, without prior notice to and approval of the Applicable Regulator, to declare or pay 

an extraordinary dividend, which is typically defined as any dividend or distribution of cash or other property whose 

fair market value, together with other dividends or distributions made within the preceding 12 months, exceeds the 

greater of such subsidiary’s statutory net gain from operations of the preceding calendar year or 10% of statutory 

surplus as of the preceding December 31. For insurance regulatory purposes, the surplus of an insurance company is 

generally determined on the basis of Statement of Statutory Accounting Principles (“SAP”) rather than generally 

accepted accounting principles (“GAAP”). SAP generally is a more conservative measure of an insurance 

22

company’s surplus. In addition, certain agreements, loans, exchanges of assets and other transactions between an 

insurance company subsidiary and its Affiliates, including its Affiliated Insurance Institution, may require prior 

notice to or approval of the Applicable Regulator. Such restrictions and requirements may affect the permissibility 

and timing of distributions to an Affiliated Insurance Institution or its Affiliates from its insurance company 

subsidiaries. 

In addition, the right of an Affiliated Insurance Institution or an Affiliated Insurance Institution Parent to 

participate in any distribution of assets of any of its subsidiaries upon liquidation, reorganization or otherwise will 

be subject to the claims of the creditors and preferred equity holders of the applicable subsidiary, except to the 

extent that such Affiliated Insurance Institution or Affiliated Insurance Institution Parent, as applicable, is 

recognized as a creditor of such subsidiary. Even if an Affiliated Insurance Institution or an Affiliated Insurance 

Institution Parent is recognized as a creditor of its insurance company subsidiary, its claims as such will likely be 

subordinated to those of policyholder creditors in the context of the liquidation of such insurance company 

subsidiary pursuant to the applicable state insolvency laws governing such liquidation. Accordingly, the Affiliated 

Insurance Institution’s Corresponding Debentures and, if applicable, Guarantee and an Affiliated Insurance 

Institution Parent’s Parent Guarantee and, if applicable, Guarantee will effectively be subordinated to all existing 

and future liabilities and preferred equity of their respective subsidiaries. 

As long as no event of default has occurred and is continuing, the related Affiliated Insurance Institution 

may generally defer interest payments on its Corresponding Debentures for up to five consecutive annual periods (or 

comparable interim periods), in which event distributions on the Insurance Capital Securities would be similarly 

deferred. Any Insurance Capital Securities with respect to which interest payments are being deferred will be 

deemed to be a Defaulted Security under the Indenture even though such deferral is permitted by the terms of such 

Insurance Capital Securities and the Corresponding Debentures. 


the likely level and timing of recoveries on the Insurance Capital Securities in the Trust Estate, and the likely levels 

of interest rates during the term of the Notes. 

Certain criteria relating to the Affiliated Insurance Institutions sponsoring the Insurance Capital Securities 

will be required to be met as of the Closing Date (or the date of the acquisition by the Issuer, as the case may be). 

However, such Affiliated Insurance Institutions are under no obligation to maintain such criteria after such date and 

none of the Affiliated Insurance Institutions, the Initial Purchasers, the Placement Agents or the Collateral Manager 

makes any representations to the contrary. Prospective purchasers of the Notes should consider and assess for 

themselves the nature, financial condition, results of operations, cash flows, business and prospects of each of the 

Affiliated Insurance Institutions and Affiliated Insurance Institution Parent and their respective operating 

subsidiaries (which may include all permissible activities for such subsidiaries) prior to making an investment in the 

Notes. 

6. Nature of the Insurance Surplus Note. The Insurance Surplus Note is an unsecured obligation that is 

expressly subordinate in right of payment to all Senior Indebtedness and Senior Claims of the Insurance Surplus 

Note Issuer and will be subject to state laws that establish the priority of distribution in the event of the 

rehabilitation, liquidation, conservation or dissolution of the Insurance Surplus Note Issuer. In the event that the 

Insurance Surplus Note Issuer becomes subject to such a proceeding, holders of Senior Indebtedness and Senior 

Claims would be afforded a higher level of priority than the Trustee as the holder of the Insurance Surplus Note and, 

accordingly, would have the right to be paid in full before any payments of interest, premium, if any, or principal are 

made to the Trustee. No payment of principal (including redemption payments, if any), premium, if any, or interest 

on the Insurance Surplus Note may be made if (i) any payment due in respect of Senior Indebtedness of the 

Insurance Surplus Note Issuer is not paid when due and any applicable grace period with respect to such default has 

ended with such default not having been cured or waived or ceasing to exist or (ii) the maturity of any Senior 

Indebtedness of the Insurance Surplus Note Issuer has been accelerated because of a default and such acceleration 

has not been rescinded or cancelled. In addition, the Insurance Surplus Note Issuer may be party to agreements with 

holders of its Senior Indebtedness that have the practical effect of further subordinating the rights of holders of the 

Insurance Surplus Note to such holders of Senior Indebtedness under certain circumstances. 

23

There are no terms in the Insurance Surplus Note that limit the ability of the Insurance Surplus Note Issuer 

to incur additional indebtedness, secured or unsecured, including any Senior Indebtedness, or to be subject to Senior 

Claims. Additionally, no such terms limit the Insurance Surplus Note Issuer from issuing any future surplus notes or 

any other similar obligations. Unless expressly subordinated to the Insurance Surplus Note, any future surplus notes 

or other similar obligations issued by the Insurance Surplus Note Issuer would rank pari passu or senior in right of 

payment to the Insurance Surplus Note issued by the Insurance Surplus Note Issuer. See “Security for the Notes— 

Description of the Insurance Surplus Note— Subordination.” 

The regulation and authority for the issuance of the Insurance Surplus Note are governed by the laws of the 

state having jurisdiction over the Insurance Surplus Note Issuer, which authorize the issuance of surplus notes and 

address their accounting treatment and repayment terms. In addition, the Applicable Regulator will generally 

require that the terms of the Insurance Surplus Note are consistent with SAP accounting guidelines, which provide 

for accounting treatment of surplus notes. Consistent with SAP guidelines relating to surplus notes, the Insurance 

Surplus Note can only be issued pursuant to the approval of the Applicable Regulator. Further, each payment of 

principal of or premium, if any, and interest on the Insurance Surplus Note is subject to the approval of the 

Applicable Regulator, which approval may be subject to a determination by the Applicable Regulator that the 

financial condition of the Insurance Surplus Note Issuer warrants the making of such payments. The Applicable 

Regulator will have broad discretion in determining whether to allow payments to be made on the Insurance Surplus 

Note. Accordingly, because the ability of the Insurance Surplus Note Issuer to redeem or make scheduled or other 

payments on its Insurance Surplus Note is subject to the Applicable Regulator’s prior approval, there can be no 

assurance as to whether and when any such payments will be made, and if made, the amount of any such payments. 

The order of the Applicable Regulator approving the issuance of the Insurance Surplus Note also provides a 

cap on the rate or amount of interest that the Insurance Surplus Note Issuer may pay under its Insurance Surplus 

Note (“Regulatory Interest Rate Limitation”). Specifically, the Insurance Surplus Note Issuer, which represents 

2.7% of the aggregate Principal Balance of the Collateral Debt Securities, is subject to an interest rate cap equal to 

12.5% per annum. In addition, payments of principal of and premium, if any, and interest on the Insurance Surplus 

Note may only be made from the funds and other assets of the Insurance Surplus Note Issuer legally available to 

make payments with respect to the Insurance Surplus Note under Applicable Insurance Laws. Furthermore, the 

funds available to make payments on the Insurance Surplus Note on any given date, whether with respect to 

principal, premium, if any, or interest, will be determined by the Applicable Regulator and may be limited by 

various factors, such as requirements under a given state’s insurance laws affecting the relative level of surplus (e.g., 

minimum surplus requirements and risk based capital standards specifying minimum capital levels). For the 

purposes of determining compliance with such surplus adequacy requirements, the surplus of an insurance company 

is determined on the basis of SAP rather than GAAP, which is generally a more conservative measure of an 

insurance company’s surplus. 

The approval of the issuance of the Insurance Surplus Note by an Applicable Regulator does not constitute 

a guarantee or recommendation of the Insurance Surplus Note by the Applicable Regulator or approval of any 

payments to be made in respect of the Insurance Surplus Note. 

Any failure by the Insurance Surplus Note Issuer to (i) make a payment of principal of or premium, if any, 

or interest on its Insurance Surplus Note due to a disapproval of such payment by the Applicable Regulator or 

(ii) pay the portion of any interest payment that would exceed a Regulatory Interest Rate Limitation, as applicable, 

will not constitute a default under the Insurance Surplus Note. However, the Insurance Surplus Note will be deemed 

to be a Defaulted Security under the Indenture if any payment of principal or premium, if any, or interest by the 

Insurance Surplus Note Issuer is not made when scheduled as a result of any Payment Restrictions, even though the 

failure to make any such payment is permitted by the terms of the Insurance Surplus Note Indenture. 


the likely level and timing of recoveries on the Insurance Surplus Note in the Trust Estate, and the likely levels of 


Certain criteria relating to the Insurance Surplus Note Issuer were required to be met as of the date of the 

acquisition by the Issuer. However, the Insurance Surplus Note Issuer is under no obligation to maintain such 

criteria after such date and none of the Insurance Surplus Note Issuer, the Initial Purchasers, the Placement Agents 

24

or the Collateral Manager makes any representations to the contrary. Prospective purchasers of the Notes should 

consider and assess for themselves the nature, financial condition, results of operations, cash flows, business and 

prospects of the Insurance Surplus Note Issuer and its operating subsidiaries (which may include all permissible 

activities for such subsidiaries) prior to making an investment in the Notes. 

7. Secondary Market and Other Collateral Debt Securities May Have Different Terms. Approximately 15.1% 

of the aggregate Principal Balance of Collateral Debt Securities to be purchased by the Issuer were purchased by the 

Warehouse Provider in secondary market or similar transactions, while approximately 13.8% of the aggregate 

Principal Balance of Collateral Debt Securities to be purchased by the Issuer were purchased by the Warehouse 

Provider in connection with primary transactions in which neither the Initial Purchasers nor the Placement Agents 

acted as the lead distribution participant. The terms of such Collateral Debt Securities and governing documentation 

may differ from the terms thereof summarized in this Offering Circular, and such differences may be material. 

Differences are likely to include, without limitation, subordination provisions (including the definitions of Senior 

Indebtedness and Senior Claims), redemption provisions (including prices and events), the definition of events of 

default and acceleration events, the obligation to pay withholding amounts, and covenants of the related parties. 

8. Subordination. Payments of principal and interest on the Notes are subject to the Priority of Payments 

provisions described herein. Under such provisions, the Class A-1 Notes are subordinated to the payment of certain 

fees and expenses of the Co-Issuers, and payments of principal of the Class A-1 Notes are subordinated to payments 

of interest on the Class A-2 Notes and the Class B Notes; the Class A-2 Notes are subordinated to the payment of 

certain fees and expenses of the Co-Issuers, payments of interest on the Class A-2 Notes are subordinated to 

payments of interest on the Class A-1 Notes, and payments of principal of the Class A-2 Notes are subordinated to 

payments of interest and principal on the Class A-1 Notes and payments of interest on the Class B Notes; the Class 

B Notes are subordinated to the payment of certain fees and expenses of the Co-Issuers, payments of interest on the 

Class B Notes are subordinated to payments of interest on the Class A Notes, and payments of principal of the Class 

B Notes are subordinated to payments of interest and principal on the Class A Notes; the Class C-1 Notes and the 

Class C-2 Notes are subordinated to the Class A Notes and Class B Notes and to the payment of certain fees and 

expenses of the Co-Issuers; and the Income Notes are subordinated to the Class A Notes, Class B Notes and Class C 

Notes and to the payment of fees and expenses of the Co-Issuers. For so long as the Class A Notes and Class B 

Notes are Outstanding, to the extent that Interest Collections are not available on any Payment Date in accordance 

with the Priority of Payments to pay Periodic Interest otherwise due on the Class C-1 Notes or Class C-2 Notes for 

such Payment Date, such interest will not be due and payable on such date, but will be added to the Aggregate 

Principal Amounts of the Class C-1 Notes or the Class C-2 Notes, as applicable, and thereafter will bear interest at 

the Applicable Periodic Rate, to the extent permitted by law. Consequently, the failure to pay any Periodic Interest 

due on the Class C Notes will not be an Event of Default so long as the Class A Notes and Class B Notes are 

Outstanding. By contrast, the Class A Notes and Class B Notes do not provide for deferral of interest if the amounts 

available for payment of Periodic Interest on the Class A Notes and Class B Notes in accordance with the Priority of 

Payments are insufficient to pay such interest in full. Consequently, failure to pay the full amount of Periodic 

Interest due on the Class A Notes and Class B Notes on a Payment Date will result in an Event of Default under the 

Indenture. If a Default (as defined in the Indenture) or an Event of Default occurs, the Holders of Class A-1 Notes 

will generally be entitled to determine the remedies to be exercised under the Indenture for so long as Class A-1 

Notes are Outstanding, and thereafter Holders of Class A-2 Notes will generally be entitled to determine the 

remedies to be exercised under the Indenture for so long as Class A-2 Notes are Outstanding, and thereafter Holders 

of the Class B Notes will generally be entitled to determine the remedies to be exercised under the Indenture for so 

long as Class B Notes are Outstanding, and thereafter Holders of the Class C Notes will generally be entitled to 

determine the remedies to be exercised under the Indenture for so long as Class C Notes are Outstanding (treating 

the Class C-1 Notes and the Class C-2 Notes as a single class for this purpose). Remedies pursued by the Holders of 

the Class A-1 Notes could be adverse to the interests of the Holders of the Class A-2 Notes, Class B Notes, Class C 

Notes and the Income Notes, remedies pursued by the Holders of the Class A-2 Notes could be adverse to the 

interests of the Holders of the Class B Notes, Class C Notes and the Income Notes, remedies pursued by the Holders 

of the Class B Notes could be adverse to the interests of the Holders of the Class C Notes and the Income Notes, 

and remedies pursued by the Holders of the Class C Notes could be adverse to the interests of the Holders of the 

Income Notes. Once an Event of Default and acceleration of the Notes have occurred, the Class A-2 Notes are not 

entitled to receive any payments of principal until the Holders of the Class A-1 Notes have been paid in full, the 

Class B Notes are not entitled to receive any payments until the Holders of the Class A Notes have been paid in full, 

the Class C Notes are not entitled to receive any payments until the Holders of the Class A Notes and Class B Notes 

25

have been paid in full, and the Income Notes are not entitled to receive any payments until the Holders of the Class 

A Notes, Class B Notes and Class C Notes have been paid in full. 

9. Impact of Defaults, Deferrals and Payment Restrictions Relating to the Collateral Debt Securities. A 

default in the payment of principal of or premium, if any, or interest on any Collateral Debt Security or its 

Corresponding Debenture, if applicable, or a deferral of distributions on any Collateral Debt Security, or any failure 

to make a scheduled payment on an Insurance Surplus Note as a result of the application of Payment Restrictions 

will decrease the amount of cash available to the Issuer to make payments on the Notes (all recoveries are required 

to be distributed on the following Payment Date in accordance with the Priority of Payments), and therefore may 

result in a default in the amount due on the Class A Notes, Class B Notes or Class C Notes and will result in smaller 

or no distributions on the Income Notes. In such event, the Noteholders may incur a loss on their investment in the 

Notes. 

10. Limited Liquidity of Collateral Debt Securities. The Collateral Debt Securities securing the Notes will be 

privately issued securities created for purposes of this transaction or similar transactions and, to a lesser extent, 

Collateral Debt Securities purchased in the secondary market. Little or no publicly available information may be 

available with respect to Affiliated Depository Institutions, Affiliated Insurance Institutions, Bank Subordinated 

Note Issuers and the Insurance Surplus Note Issuer that are not reporting companies under the Exchange Act. As a 

result, the Collateral Debt Securities will be extremely illiquid investments. If any Collateral Debt Security becomes 

a Defaulted Security or Credit Risk Security, the Trustee may sell such Collateral Debt Security at the direction of 

the Collateral Manager. In addition, with respect to defaulted Collateral Debt Securities, the Collateral Manager 

may, with the consent of the Requisite Noteholders, and will, at the direction of the Requisite Noteholders, direct the 

Trustee to take such action as the Collateral Manager may deem advisable, including engaging in a restructuring, 

bringing enforcement proceedings and/or taking other measures, subject to the remedial provisions in the underlying 

documentation. Such actions will subject the Issuer and the Noteholders to greater uncertainties with respect to the 

timing and amount of any ultimate recovery than a sale of the defaulted Collateral Debt Securities. In the event that 

any such sale is made, the Issuer generally expects that the proceeds from such sale of such Collateral Debt Security 

will be less than the outstanding Principal Balance thereof (plus any unpaid accrued interest). In addition, because 

the Collateral Debt Securities are extremely illiquid investments there can be no assurance that any sale will be 

consummated in connection with an attempted Optional Notes Redemption at the direction of 66-2/3% Aggregate 

Principal Amount of the Income Noteholders or in connection with an attempted Auction in connection with a 

Mandatory Auction Call. 

11. Limited Liquidity of Notes; Restrictions on Transfer. There is no market for any of the Notes being offered 

hereby and, as a result, a purchaser must be prepared to hold the Notes for an indefinite period of time or until the 

maturity or earlier prepayment thereof. The Notes will be owned by a relatively small number of investors and it is 

highly unlikely that an active secondary market for the Notes will develop. Purchasers of the Notes may find it 

difficult or uneconomic to liquidate their investment at a particular time or at any time. The Notes have not been 

and will not be registered under the Securities Act or under any U.S. state securities or “Blue Sky” laws or insurance 

securities laws or the securities laws of any other jurisdiction and are being issued and sold in reliance upon 

exemptions from registration provided by such laws. The Issuer has not registered with the U.S. Securities and 

Exchange Commission (the “SEC”) as an investment company pursuant to the Investment Company Act in reliance 

upon the exclusion from the definition of “investment company” provided by Section 3(c)(7) of the Investment 

Company Act and the rules and regulations thereunder. 

No Note may be sold or transferred unless such sale or transfer (i) is exempt from the registration 

requirements of the Securities Act and applicable state securities laws and insurance securities laws, (ii) will not 

constitute or result in a non-exempt “prohibited transaction” under ERISA or Section 4975 of the Code (or any 

substantially similar federal, state or local law), (iii) does not cause either of the Co-Issuers to become subject to the 

registration requirements of the Investment Company Act, (iv) will not result in Benefit Plan Investors owning 25% 

or more of the Aggregate Principal Amount of the Income Notes and (v) is made to (a) a non-U.S. Person outside 

the United States or (b) a Qualified Purchaser that is also either (x) a Qualified Institutional Buyer or (y)(1) in the 

case of Class A Notes, Class B Notes or Class C Notes that are Certificated Notes, an institutional “accredited 

investor” (as defined in clause (1), (2), (3) or (7) of Rule 501(a) of Regulation D under the Securities Act) or (2) in 

the case of the Income Notes, an “accredited investor” (as defined in Rule 501(a) of Regulation D under the 

Securities Act). Prospective transferees of Certificated Notes will be required pursuant to the terms of the Indenture 

26

to deliver a certificate to the Trustee and the Co-Issuers relating to compliance with the Securities Act, applicable 

state securities laws, ERISA, the Code and the Investment Company Act, and transferees of beneficial interests in a 

Rule 144A Global Note, Temporary Regulation S Global Note or Regulation S Global Note will be deemed to have 

made certain representations set forth in the Indenture and described herein. The Co-Issuers will not provide 

registration rights to any purchaser of the Notes and none of the Co-Issuers, the Trustee, or any other person may 

register the Notes under the Securities Act or any state securities or “Blue Sky” laws. In addition to the foregoing, 

the Issuer maintains the right to cause the resale, in accordance with and subject to the terms of the Indenture, of any 

interest in a Note previously transferred to a person that either (i) is a U.S. Person that becomes the beneficial owner 

of a Global Note and is determined not to have been both a Qualified Institutional Buyer and a Qualified Purchaser 

at the time of acquisition of its interest in such Global Note or (ii) is a person for which the representations made by 

such person in the ERISA section in any representation letter or certificate required to be delivered by such person 

are untrue. 

The Notes will constitute a new issuance of securities with no established trading market. Such a market 

may or may not develop, but neither the Initial Purchasers nor the Placement Agents are under any obligation to 

make such a market, and if they do make such a market they may discontinue any market-making activities with 

respect to the Notes at any time without notice. In addition, market-making activity will be subject to the limits 

imposed by the Securities Act and the Exchange Act. Accordingly, no assurances can be made as to the liquidity of 

or the trading market for the Notes. 

12. Stated Maturity Date, Average Life and Prepayment Considerations. The Stated Maturity Date of each 

class of Notes is the Payment Date occurring in December 2035, however, the Notes will be redeemed, if the related 

Auction is successful, on the Payment Date in December 2015 in connection with a Mandatory Auction Call. See 

“Description of the Notes— Mandatory Auction Call.” In addition, the average life of each class of Notes is expected 

to be shorter than the number of years until its respective Stated Maturity Date because of one or more of the 

following: (i) the Notes may be redeemed in whole in connection with an Optional Notes Redemption on or after the 

Payment Date in December 2009 at the direction of 66-2/3% in Aggregate Principal Amount of the Income 

Noteholders, (ii) all of the Collateral Debt Securities will mature before the Stated Maturity Date, (iii) all of the 

Collateral Debt Securities may prepay before the Stated Maturity Date under certain circumstances due to optional 

redemptions or Special Event redemptions of the Collateral Debt Securities and (iv) the Notes may receive principal 

payments in accordance with the Priority of Payments. Any amounts received in connection with Collateral Debt 

Securities that mature prior to the Stated Maturity Date will be applied in accordance with the Priority of Payments. 

In addition, on any Payment Date occurring after the Class A Notes, Class B Notes and Class C Notes have been 

paid in full, the Income Notes may be redeemed in whole following an auction of the Collateral Debt Securities in 

connection with a Clean Up Call. See “Description of the Notes— Clean Up Call.” Any Clean Up Call will result in 

the Income Notes being redeemed before the Stated Maturity Date. 

Beginning on the Turbo Date, the Class A Notes, Class B Notes or Class C Notes will receive additional 

principal payments (in the order and priority set forth in clause (a)(xiii) of the Priority of Payments) from 60% of the 

amount of Interest Collections (if any) that would otherwise be available for payments on the Income Notes. Such 

additional principal payments (if any) would cause the actual maturity of the Class A Notes, Class B Notes or Class 

C Notes to occur earlier than it would in the absence of such additional payments. 

Payments of principal will be made on the Class A Notes, Class B Notes and Class C Notes in accordance 

with the Priority of Payments to the extent the Collateral Debt Securities are redeemed and the related redemption 

prepayments are not applied either to pay Periodic Interest on the Class A Notes, Class B Notes and Class C Notes 

and certain expenses of the Issuer. Prepayments on the Capital Securities will depend directly on redemptions under 

the Corresponding Debentures. Prepayments on the Collateral Debt Securities will be influenced by, among other 

things, the prevailing levels of interest rates (which will affect the incentive to voluntarily prepay the Collateral Debt 

Securities), the business, prospects, financial condition, results of operations and cash flows of the Collateral Debt 

Securities Issuers or their parent Affiliated Depository Institutions or Affiliated Insurance Institutions, as applicable, 

and the availability of alternative financing in the form of equity, debt or hybrid instruments such as capital 

securities (which will affect the ability to refinance the Collateral Debt Securities), an election by the Insurance 

Surplus Note Issuer to reorganize from a mutual insurance company to a stock insurance company (to the extent that 

the plan of reorganization includes the retirement or redemption of its Insurance Surplus Note), the occurrence of 

changes or prospective changes involving tax law, the Investment Company Act or Applicable Regulator capital or 

27

surplus adequacy guidelines (which could permit the redemption of some or all of the Collateral Debt Securities or 

provide an incentive for the voluntary prepayment thereof), and whether permission of the Applicable Regulator is 

required, directly or indirectly, for prepayment of any Collateral Debt Securities and, if so, whether the Applicable 

Regulator grants such permission. 

Coverage Prepayments will be made on certain Notes if the Coverage Tests are not met as of any 

Calculation Date, which may occur, for example, if an Affiliated Depository Institution or Affiliated Insurance 

Institution exercises its right to defer interest payments on its Corresponding Debentures, if a default occurs with 

respect to the Collateral Debt Securities or Corresponding Debentures or if the Insurance Surplus Note Issuer fails to 

make a payment under its Insurance Surplus Note as a result of a Payment Restriction. 

The Holders of the Notes will have control over the timing or amount of any redemptions of the Collateral 

Debt Securities. Redemptions of Collateral Debt Securities may result in the remaining portfolio of Collateral Debt 

Securities having a greater concentration of risk due to the smaller number of issuers of Collateral Debt Securities 

represented in the portfolio causing a possible decrease in diversity or a lower overall credit quality, which could 

have a material adverse effect on the Notes. 

As of the Closing Date, the total principal amount of the Notes will be U.S.$312,450,000 and the total 

principal amount of the Collateral Debt Securities will be U.S.$300,000,000. The Income Notes will rely on 

distributions of excess Interest Collections on the Collateral Debt Securities for their ultimate return. If early 

prepayments are made as a result of an optional redemption or Special Event redemption of the Collateral Debt 

Securities or if the Income Notes are redeemed pursuant to an Optional Notes Redemption or a Clean Up Call, or if 

additional payments are made on the Class A Notes, Class B Notes or Class C Notes on or after the Turbo Date 

pursuant to clause (a)(xiii) of the Priority of Payments, Holders of the Income Notes could recover less than their 

initial investment. If the Income Notes are redeemed pursuant to a Mandatory Auction Call, Holders of the Income 

Notes will receive the amount of their initial investment but may receive no return on that investment. See “— 

Undercollateralization of the Income Notes; Variability of Cash Flows on the Income Notes.” 

13. Interest Rate Mismatch Risk; Dependence on each Hedge Counterparty. The Class A-1 Notes, Class A-2 

Notes, Class B Notes and Class C-1 Notes will bear interest at a floating rate based on LIBOR. Each Collateral 

Debt Security will bear interest at a fixed rate, a floating rate based on LIBOR or a combination of a fixed rate for a 

period of time followed by a floating rate based on LIBOR thereafter. Although the Issuer will enter into the Hedge 

Agreements, which will be used to exchange fixed rate payments received on certain Collateral Debt Securities for a 

LIBOR-based floating rate payment to provide a source of funding for the floating rate interest payments on the 

Class A Notes, Class B Notes and Class C-1 Notes, there will be an interest rate mismatch between (x) the floating 

rate at which interest accrues on the Class A Notes, Class B Notes and Class C-1 Notes and the fixed rate at which 

interest accrues on the Class C-2 Notes on the one hand and (y) the fixed and floating rates at which interest accrues 

on the Collateral Debt Securities on the other. In addition, neither the Swap Notional Amount nor the Cap Notional 

Amount will match the aggregate Principal Balance of the Collateral Debt Securities. Also, a mismatch between 

interest received by the Co-Issuers from the Collateral Debt Securities and the interest payable by the Issuer on the 

Notes may occur as a result of, among other things, differences in the determination of LIBOR, redemptions, 

defaults or deferrals in respect of Collateral Debt Securities, differences in the number of days in the accrual period 

for the Hedge Agreements, differences in the number of days in the related accrual periods for the Notes and 

differences in the timing of payments required to be made on the Collateral Debt Securities and the timing of 

payments required to be made on the Notes. Such mismatches and the decline in the value of the Fixed Rate 

Collateral Debt Securities as a result of a rising interest rate environment may adversely affect the Co-Issuers’ 

ability to pay amounts due in respect of the Notes. Although the Hedge Agreements will be entered into in order to 

provide a hedge against mismatches in interest rates and changing interest rates, no assurance can be provided as to 

whether the Hedge Agreements will in fact provide an adequate hedge under all circumstances. See “Description of 

the Hedge Agreements.” 

The ability of the Issuer to meet its obligation to pay interest on the Notes will be partially dependent on the 

performance by each Hedge Counterparty of its payment obligations under the related Hedge Agreement. If a 

Hedge Counterparty were to fail to pay its obligations under a Hedge Agreement or if, for any reason, a Hedge 

Agreement were to be terminated, shortfalls could occur and the Noteholders could suffer a loss. If a Hedge 

Agreement is terminated for any reason (including an event of default or termination event) prior to its contractual 

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termination date, the Issuer may be obligated to make a termination payment to the relevant Hedge Counterparty. 

Such termination payments could be substantial and will be payable in accordance with the Priority of Payments. 

The initial Hedge Counterparty will make the Upfront Payment to the Issuer on the Closing Date, which 

will be used by the Issuer, together with the proceeds of the offering, to purchase the Collateral Debt Securities and 

pay certain fees and expenses. See “Use of Proceeds.” As a result, the fixed rate payments made by the Issuer 

during the term of the interest rate swap agreement will be higher than they would have been if no Upfront Payment 

were made by the initial Hedge Counterparty. See “Description of the Hedge Agreements.” If the Hedge 

Agreements with the initial Hedge Counterparty are terminated early, a termination payment owed by the Issuer to 

the initial Hedge Counterparty will be higher than it would have been if the Upfront Payment had not been made, 

and such payment will be made to the initial Hedge Counterparty before any payments are made to Noteholders. 

14. Undercollateralization of the Income Notes; Variability of Cash Flows on the Income Notes. The initial 

Aggregate Principal Amount of the Notes (U.S.$312,450,000) will exceed the initial aggregate Principal Balance of 

the Collateral Debt Securities. As a result, the Income Notes will be undercollateralized and represent a highly 

leveraged subordinated investment. Consequently, Principal Collections will be insufficient to pay the entire 

Aggregate Principal Amount of the Income Notes. Over the term of their investment, therefore, Holders of Income 

Notes will rely on the distribution of excess Interest Collections for their ultimate return. Redemption of the 

Collateral Debt Securities prior to their maturity will decrease the amount of Interest Collections. Additionally, the 

deferral of distributions on the Collateral Debt Securities, the failure to make a scheduled payment on the Insurance 

Surplus Note as a result of a Payment Restriction or the failure otherwise to pay the principal of or any premium or 

interest on the Collateral Debt Securities in accordance with their terms will decrease the current amount of Interest 

Collections distributable on the Income Notes. The occurrence of a Mandatory Auction Call or Optional Notes 

Redemption will cause the Income Notes to be redeemed prior to the Stated Maturity Date resulting in a shorter term 

of investment during which the Income Notes will receive excess Interest Collections. Any sale of a Collateral Debt 

Security that is a Credit Risk Security or a Defaulted Security is likely to result in losses to the Issuer. 

Consequently, purchasers of the Income Notes bear a high risk of losing all or part of their investment. 

The amount of distributions, if any, to be received by Holders of the Income Notes may vary significantly 

from Payment Date to Payment Date for various reasons. Those reasons include, without limitation, defaults and/or 

deferrals on the Collateral Debt Securities, any failure to make a scheduled payment on the Insurance Surplus Note 

as a result of a Payment Restriction, or redemption of the Collateral Debt Securities as a result of an optional 

redemption or a Special Event, the effect of the Class A/B Coverage Tests and Class C Coverage Tests, the 

variability of expenses for any Due Period, the variability of the days in each Due Period, the fact that certain 

Collateral Debt Securities pay interest semiannually, variability on the amount and timing of payments under the 

Hedge Agreements, the effect of turbo payments on and after the Turbo Date and the effect of the interest rate 

mismatch risk set forth above under “—Interest Rate Mismatch Risk; Dependence on each Hedge Counterparty.” 

A Mandatory Auction Call will occur and the Income Notes will be redeemed in full on the Payment Date 

occurring in December 2015, provided that the related Auction of the Collateral Debt Securities would provide 

enough proceeds, after payment by the Issuer of all amounts senior to the Income Notes, to pay the Income 

Noteholders an amount equal to (x) their initial investment minus (y) all amounts previously paid by the Issuer to 

the Income Noteholders (whether representing Interest Collections or Principal Collections). If the Auction related 

to the Payment Date occurring in December 2015 is not successfully conducted, the Collateral Manager will 

continue to conduct Auctions on a semi-annual basis until a successful Auction has been conducted. A Mandatory 

Auction Call will result in the Income Noteholders receiving the amount of their initial investment but the Income 

Noteholders may receive no return on that investment, and, because the Issuer is required to conduct an Auction of 

all of the Collateral Debt Securities in connection with a Mandatory Auction Call, the return, if any, received by the 

Noteholders on their investment in the Income Notes will be affected by the credit quality of the Collateral Debt 

Securities and interest rate and other market conditions on the date the related Auction occurs. See “Description of 

the Notes— Mandatory Auction Call.” 

The Holders of 66-2/3% in Aggregate Principal Amount of the Income Notes may cause an Optional Notes 

Redemption to occur on any Payment Date on or after the Payment Date occurring in December 2009. In such event 

the Income Notes will be redeemed in full on such Payment Date and there is no requirement that the proceeds of 

the sale of the Collateral Debt Securities be sufficient to permit the Issuer to pay any amount to the Income 

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Noteholders. If an Optional Notes Redemption occurs, it may result in the Income Noteholders incurring a loss on 

their investment and, because the Issuer is required to sell all of the Collateral Debt Securities in connection with an 

Optional Notes Redemption, the return, if any, received by the Noteholders on their investment in the Income Notes 

will be affected by the credit quality of the Collateral Debt Securities and interest rate and other market conditions 

on the date the related sale of Collateral Debt Securities occurs. See “Description of the Notes— Optional Notes 

Redemption”. 

15. The Issuer. The Issuer is a recently formed entity and has no prior operating history or prior business 

experience. The Issuer will have no significant assets other than the Collateral Debt Securities, the Class A/B 

Reserve Account, the Expense Reserve Account, the Interest Collection Account, the Principal Collection Account, 

the Semiannual Receipts Account, any Hedge Counterparty Collateral Account and its interest in the Hedge 

Agreements and the Collateral Management Agreement, which in each case will be pledged to secure the Notes. 

The Issuer will not engage in any business activity other than the issuance of the Notes as described herein, the 

acquisition and sale of Collateral Debt Securities, certain activities conducted in connection with the payment of 

amounts in respect of the Notes and other activities incidental to the foregoing. The Issuer is an exempted company 

with limited liability incorporated under the laws of the Cayman Islands and all of its directors reside in the Cayman 

Islands. Because the Issuer is a Cayman Islands company, it may not be possible for investors to enforce against the 

Issuer in United States courts judgments predicated upon the civil liability provisions of the United States securities 

laws. 

16. The Co-Issuer. The Co-Issuer is a newly formed entity and has no prior operating history or prior business 

experience. The Co-Issuer does not have and will not have any significant assets. The Co-Issuer will not engage in 

any business activity other than the co-issuance of the Class A Notes, Class B Notes and Class C Notes, and will not 

be an obligor on the Income Notes. 

17. Withholding Taxes. The Issuer may acquire (a) a Capital Security issued by a trust that holds 

Corresponding Debentures of a U.S. entity or (b) a Bank Subordinated Note or Insurance Surplus Note of a U.S. 

issuer only if (i) the Issuer has received an opinion of counsel to the effect that such Collateral Debt Security (or the 

related Corresponding Debenture) will be treated as debt for U.S. federal income tax purposes, (ii) the offering 

document related to the original issuance of such Collateral Debt Security provides that an opinion of counsel was 

received by the issuer thereof (or the related Affiliated Depository Institution or Affiliated Insurance Institution, if 

applicable) to the effect that, or such U.S. issuer otherwise indicates that, such Collateral Debt Security (or related 

Corresponding Debenture) will be treated as debt for U.S. federal income tax purposes, or (iii) the Issuer reasonably 

believes that such Collateral Debt Security (or related Corresponding Debenture) will be treated as debt for U.S. 

federal income tax purposes. Accordingly, under current law, the Issuer does not expect that income derived by the 

Issuer in respect of such Collateral Debt Securities will be subject to U.S. withholding tax. In addition, it is not 

expected that the Hedge Agreements entered into by the Issuer will be subject to U.S. withholding tax. If a 

Corresponding Debenture, Bank Subordinated Note or Insurance Surplus Note were not treated as debt for U.S. 

federal income tax purposes, income derived by the Issuer in respect of the related Collateral Debt Security could be 

subject to U.S. withholding tax. Further, income derived by the Issuer in respect of the Collateral Debt Securities 

could become subject to withholding tax as a result of a change in applicable law, possibly with retroactive effect. 

In certain circumstances, the Issuer may be entitled to additional amounts in respect of withheld tax; however, if a 

withholding tax were imposed on income derived by the Issuer in respect of the Collateral Debt Securities and such 

withholding tax were not offset by any payment of additional amounts, such withholding tax could impair the 

Issuer’s ability to make payments on the Notes. 

The Issuer may acquire (a) a Capital Security issued by a trust that holds Corresponding Debentures of a 

non-U.S. entity, or (b) a Bank Subordinated Note or Insurance Surplus Note of a non-U.S. issuer only if (i) the issuer 

thereof has received an opinion of counsel to the effect that payments with respect to such Collateral Debt Security 

were not at the time of issuance thereof subject to withholding tax in the jurisdiction of such issuer, (ii) the offering 



applicable) to the effect that, or such issuer otherwise indicates that, payments with respect to such Collateral Debt 

Security were not then subject to withholding tax in the jurisdiction of such issuer, or (iii) the Issuer otherwise 

reasonably believes that payments with respect to such Collateral Debt Security were not at the time of issuance 

thereof subject to withholding tax in the jurisdiction of such issuer. However, it is possible that payments in respect 

30

of any such Collateral Debt Securities could become subject to withholding tax subsequent to the issuance thereof 

(for example, as a result of a change in law, possibly with retroactive effect). Collateral Debt Securities issued by 

non-U.S. issuers generally will not provide for the payment of additional amounts in respect of any withholding 

taxes imposed. If a withholding tax were imposed on income derived by the Issuer in respect of the Collateral Debt 

Securities and such withholding tax were not offset by any payment of additional amounts, such withholding tax 

could impair the Issuer’s ability to make payments on the Notes. See “Income Tax Considerations— Tax Treatment 

of the Issuer— Withholding Taxes.” 

Withholding tax is not currently imposed on payments on the Notes. There can be no assurance, however, 

that the law will not change. In the event that a withholding tax is imposed on payments in respect of the Notes, the 

holders of the Notes will not be entitled to receive additional amounts to compensate for such withholding tax. 

18. Limited Experience of the Collateral Manager. The Collateral Manager was formed in January 2005. The 

Collateral Manager does not currently have any employees but has entered into a services contract with Sandler 

O’Neill & Partners, L.P. pursuant to which Sandler O’Neill & Partners, L.P. will make available to the Collateral 

Manager the services of certain professionals that are employed by Sandler O’Neill & Partners, L.P. (the “Collateral 

Manager Personnel”). Initially, the Collateral Manager Personnel will perform the Collateral Manager’s obligations 

under the Collateral Management Agreement. In the future, the Collateral Manager may utilize any combination of 

its own employees and personnel and personnel obtained pursuant to such services contract to perform its 

obligations. Although the Collateral Manager Personnel have experience structuring transactions similar to those 

described herein, such personnel have limited investment management experience and, on the Closing Date, it is 

expected that the Issuer will be the Collateral Manager’s only client. 

19. Dependence on Key Personnel. The performance of the Collateral Debt Securities depends in part on the 

skills of the Collateral Manager in selecting and acquiring the Collateral Debt Securities as well as monitoring the 

Collateral Debt Securities. In addition, the Collateral Manager will direct the Trustee on behalf of the Issuer as to 

the disposition of any Defaulted Securities or Credit Risk Securities, including with respect to the pricing thereof, 

and make certain decisions with respect to the exercise of rights by the Issuer as holder of the Collateral Debt 

Securities. As a result, the Issuer will be dependent on the financial and managerial experience of the Collateral 

Manager and certain of the Collateral Manager Personnel to whom the task of managing the Collateral has been 

assigned. In the event that one or more of the Collateral Manager Personnel were no longer available to provide 

services to the Collateral Manager, the Collateral Manager would have to reassign responsibilities, contract for 

additional personnel and/or hire one or more employees and such a loss could have a material adverse effect on the 

performance of the Issuer. See “The Collateral Manager” and “The Collateral Management Agreement.” 

20. Potential Conflicts of Interest. 

Conflicts of Interest Involving the Collateral Manager. Various potential and actual conflicts of interest 

may arise from the overall, advisory, investment and other activities of the Collateral Manager and its Affiliates for 

their own accounts or for their respective client accounts. The Collateral Manager has no obligation, except in the 

limited circumstances set forth in the Collateral Management Agreement, to disclose these conflicts on an ongoing 

basis. Affiliates of the Collateral Manager and their respective clients may invest in securities that would be 

appropriate for the Issuer to acquire as Collateral Debt Securities, and they have no duty to make such investments 

in a way that is favorable to the Issuer or the holders of the Notes. Such investments may be different from those 

made on behalf of the Issuer. The Collateral Manager and/or its Affiliates may also have ongoing relationships 

with, render services to, engage in transactions with and, in the case of such Affiliates, invest in other issuers of 

collateralized debt obligations that invest in assets of a similar nature to those securing the Notes, and with 

companies whose securities are pledged to secure the Notes and/or the Affiliated Insurance Institutions or Affiliated 

Depository Institutions. Affiliates of the Collateral Manager may also own equity or debt securities issued by 

issuers of and other obligors on Collateral Debt Securities and/or the Affiliated Insurance Institutions or Affiliated 

Depository Institutions. As a result, officers or Affiliates of the Collateral Manager may possess information 

relating to issuers of Collateral Debt Securities and/or the Affiliated Insurance Institutions or Affiliated Depository 

Institutions that is not known to the individuals at the Collateral Manager responsible for monitoring the Collateral 

Debt Securities and/or the Affiliated Insurance Institutions or Affiliated Depository Institutions and performing the 

other obligations under the Collateral Management Agreement. The Collateral Manager will not be required to 

share such information with the Issuer or any Holder of any Note. The Collateral Manager will not have any 

31

liability to the Issuer or any Holder of any Note for failure to disclose such information or for taking, or failing to 

take, any action based upon such information. The Collateral Manager may in the future serve as collateral manager 

or advisor or sub-advisor for other collateralized debt obligation vehicles (or similar entities) on terms materially 

different from those applicable between the Collateral Manager and the Issuer and, accordingly, the Collateral 

Manager may have incentives to favor any one or more other collateralized debt obligation vehicles (or similar 

entities) over the Issuer. In addition, Affiliates and clients of the Collateral Manager may invest in securities that are 

senior to, or have interests different from or adverse to, the securities that are pledged to secure the Notes. The 

Collateral Manager and/or its Affiliates may at certain times be simultaneously seeking to purchase or dispose of 

investments for its respective account, the Issuer, any similar entity for which it serves as manager or advisor and for 

its other clients or Affiliates. 

Neither the Collateral Manager nor any of its Affiliates is under any obligation to offer investment 

opportunities of which they become aware to the Issuer or to account to the Issuer for (or share with the Issuer or 

inform the Issuer of) any such transaction or any benefit received by them from any such transaction or to inform the 

Issuer of any investments before offering any investments to other funds or accounts that the Collateral Manager 

and/or its Affiliates manage or advise. Furthermore, the Collateral Manager and/or its Affiliates may make an 

investment on behalf of any account that they manage or advise without offering the investment opportunity or 

making any investment on behalf of the Issuer. The Collateral Manager and/or its Affiliates have no affirmative 

obligation to offer any investments to the Issuer or to inform the Issuer of any investments before offering any 

investments to other funds or accounts that the Collateral Manager and/or its Affiliates manage or advise. 

Furthermore, the Collateral Manager and its Affiliates may make an investment on their own behalf without offering 

the investment opportunity to, or the Collateral Manager making any investment on behalf of, the Issuer. 

Affirmative obligations may exist or may arise in the future, whereby the Collateral Manager and/or its Affiliates are 

obligated to offer certain investments to funds or accounts that they manage or advise before or without the 

Collateral Manager offering those investments to the Issuer. The Collateral Manager and its Affiliates have no 

affirmative obligation to offer any investments to the Issuer or to inform the Issuer of any investments before 

engaging in any investments for themselves. The Collateral Manager may make investments on behalf of the Issuer 

in securities, or other assets, that it has declined to invest in for its own account, the account of any of its Affiliates 

or the account of its other clients. The Collateral Manager will endeavor to resolve conflicts with respect to 

investment opportunities in a manner that it deems equitable under the facts and circumstances. 

Although the Collateral Manager Personnel will devote as much time to the Issuer as the Collateral 

Manager deems appropriate, the Collateral Manager Personnel may have conflicts in allocating their time and 

services among the Issuer and the Collateral Manager’s other accounts and clients. In addition, as employees of 

Sandler O’Neill & Partners L.P., the Collateral Manager Personnel will have substantial responsibilities outside of 

their responsibilities to perform services for the Collateral Manager. 

The Indenture only allows the Collateral Manager to sell Collateral Debt Securities in very limited 

circumstances, which includes a Collateral Debt Security becoming a Defaulted Security or a Credit Risk Security. 

Accordingly, during certain periods or in certain circumstances, the Collateral Manager may be unable as a result of 

such restrictions to sell Collateral Debt Securities or to take other actions which it might consider to be in the best 

interests of the Issuer and the holders of the Notes. In the event a Collateral Debt Security is sold, the Indenture 

does not permit any reinvestment of the sale proceeds in additional Collateral Debt Securities. 

Affiliates of the Collateral Manager may (for their own accounts or for the accounts of others) purchase 

Notes in the initial offering thereof, and may do so at any time thereafter. One of the Affiliates of the Collateral 

Manager, Sandler O’Neill & Partners, L.P., will be an Initial Purchaser and Placement Agent in connection with the 

offering of the Notes and, accordingly, (i) investors identified by Sandler O’Neill & Partners, L.P. will acquire a 

portion of the Notes on the Closing Date or thereafter and (ii) Sandler O’Neill & Partners, L.P. and other Affiliates 

may acquire Notes for their own accounts on the Closing Date or thereafter. 

Substantially all of the Collateral Debt Securities to be acquired from Greenwich Capital Financial 

Products, Inc., as Warehouse Provider, on the Closing Date were originally acquired in transactions in which 

Sandler O’Neill & Partners, L.P. was acting as placement agent in primary market transactions or as broker or dealer 

in secondary market transactions. Because Sandler O’Neill & Partners, L.P. served as placement agent or 

broker/dealer with respect to all the Collateral Debt Securities, and may have earned a fee or commission in 

32

connection with such transactions, the Collateral Manager has potentially conflicting interests with respect to its 

selection of the Collateral Debt Securities for acquisition by the Warehouse Provider on behalf of the Issuer. 

Collateral Debt Securities acquired by the Warehouse Provider during the accumulation period before the Closing 

Date and sold to the Issuer on the Closing Date will be purchased by the Issuer at a price determined as described 

below under “—Purchase of Collateral Debt Securities; Warehouse Arrangements”. 

At all times that Sandler O’Neill Advisors or any of its Affiliates is acting as Collateral Manager, Notes, if 

any, held by, or with respect to which discretionary voting rights are held by, Sandler O’Neill Advisors and its 

Affiliates will have no voting rights with respect to any vote in connection with the removal of the Collateral 

Manager and will be deemed not to be outstanding in connection with any such vote. However, any Notes held by, 

or with respect to which discretionary voting rights are held by, Sandler O’Neill Advisors and its Affiliates or their 

respective employees will have voting rights with respect to all other matters as to which the holders of the Notes 

are entitled to vote, including, without limitation, any vote in connection with an Optional Notes Redemption or the 

appointment of a replacement collateral manager which is not affiliated with Sandler O’Neill Advisors in 

accordance with the Collateral Management Agreement. See “The Collateral Management Agreement.” 

The Collateral Manager may arrange (i) principal transactions where an Affiliate of the Collateral Manager, 

acting for its own account, buys Collateral Debt Securities or Eligible Investments from, or sells Collateral Debt 

Securities or Eligible Investments to, the Issuer (“Principal Transactions”) or (ii) entry into Hedge Agreements 

between an Affiliate of the Collateral Manager and the Issuer (“Hedge Transactions”). Such Principal Transactions 

and Hedge Transactions give rise to a conflict of interests with respect to the Collateral Manager. The Collateral 

Manager will provide written notice of any Principal Transaction or Hedge Transaction to the Issuer or to any agent 

appointed by the Issuer for this purpose and obtain the written consent of the Issuer or such agent prior to 

completion of such Principal Transaction or Hedge Transaction. 

The Collateral Manager may also effect client cross transactions where the Collateral Manager causes a 

transaction to be effected between the Issuer and another account advised by it or any of its Affiliates (“Client Cross 

Transactions”). In addition, with the prior authorization of the Issuer, which can be revoked at any time, the 

Collateral Manager may enter into agency cross transactions where it or any of its Affiliates acts as broker for the 

Issuer and for the other party to the transaction (“Agency Cross Transactions”), to the extent permitted by applicable 

law, in which case it or any such Affiliate will receive commissions from, and have a potentially conflicting division 

of loyalties and responsibilities regarding, both parties to the transaction. Although the Affiliates of the Collateral 

Manager anticipate that the commissions, mark-ups and mark-downs charged by the Affiliates will generally be 

competitive, the Collateral Manager or any of its Affiliates may have interests in such transactions that are adverse 

to those of the Issuer, such as an interest in obtaining favorable commission rates, mark-ups and mark-downs. In 

addition, other potential and actual conflicts of interest may arise in connection Client Cross Transactions or Agency 

Cross Transactions. 

There is no limitation or restriction on Sandler O’Neill Advisors or any of its Affiliates with regard to 

acting as collateral manager (or in a similar role), or in any other capacity, to other parties or persons. This and 

other future activities of the Collateral Manager and its Affiliates may give rise to additional conflicts of interest. 

Sandler O’Neill & Partners, L.P., an Affiliate of the Collateral Manager, will be entitled to payment by the 

Issuer of certain fees on the Closing Date in connection with the offering of the Notes. 

Conflicts of Interest Involving the Initial Purchasers and Placement Agents. Various potential and actual 

conflicts of interest may arise from the overall business and investment activities of each Initial Purchaser and each 

Placement Agent, their respective Affiliates (including their respective partners, directors, officers and employees 

(“Initial Purchaser Affiliates” and “Placement Agent Affiliates”)) and their respective clients, which include issuers 

of Collateral Debt Securities and their Affiliates. The following briefly summarizes some of these conflicts, but is 

not intended to be an exhaustive discussion of all potential conflicts. 

An Initial Purchaser, a Placement Agent, their respective Affiliates and Initial Purchaser Affiliates and 

Placement Agent Affiliates may have had in the past and may in the future have business relationships and dealings 

with one or more issuers of Collateral Debt Securities and their Affiliates and may own equity or debt securities 

issued by issuers of Collateral Debt Securities or their Affiliates. One or more of the Initial Purchasers, Placement 

33

Agents, their respective Affiliates and Initial Purchaser Affiliates and Placement Agent Affiliates may have provided 

and may in the future provide investment banking services to any Collateral Debt Securities Issuer, Affiliated 

Depository Institution or Affiliated Insurance Institution or any of their respective Affiliates and may have received 

or may receive compensation for such services. In addition, one or more of the Initial Purchasers, Placement 

Agents, their respective Affiliates and Initial Purchaser Affiliates and Placement Agent Affiliates may buy securities 

from and sell securities to any Collateral Debt Securities Issuer, Affiliated Depository Institution or Affiliated 

Insurance Institution or any of their respective Affiliates for their own account or for the accounts of their customers. 

Pursuant to certain warehousing arrangements, on the Closing Date, the Issuer will purchase the Collateral 

Debt Securities with a Principal Balance of U.S.$300,000,000 from the Warehouse Provider, which is an Affiliate of 

Greenwich Capital Markets, Inc., one of the Initial Purchasers and Placement Agents. In each case, the Warehouse 

Provider will have purchased such Collateral Debt Securities in transactions in which Sandler O’Neill & Partners, 

L.P. was acting in primary market transactions or as broker or dealer in secondary market transactions and may have 

earned a fee or commission in connection with such transactions. One or more of the Initial Purchasers, Placement 

Agents, their respective Affiliates and Initial Purchaser Affiliates and Placement Agent Affiliates may, but is not 

obligated to, advise the Issuer, Collateral Debt Securities Issuers, Affiliated Depository Institutions or Affiliated 

Insurance Institutions or any of their respective Affiliates with respect to restructuring or working out any of its debt 

obligations, including, without limitation, the Corresponding Debentures. One or more of the Initial Purchasers, 

Placement Agents, their respective Affiliates and Initial Purchaser Affiliates and Placement Agent Affiliates and 

accounts for which any of them acts as investment adviser may own Notes, but are not required to own or hold 

Notes. 

21. Purchase of Collateral Debt Securities; Warehouse Arrangements. All of the Collateral Debt Securities 

purchased by the Issuer will be purchased from a portfolio of Collateral Debt Securities accumulated by the 

Warehouse Provider prior to or on the Closing Date pursuant to certain warehousing arrangements. Substantially all 

of the Collateral Debt Securities subject to such warehousing arrangements were originally acquired in transactions 

in which Sandler O’Neill & Partners, L.P. was acting as placement agent in primary market transactions or as broker 

or dealer in secondary market transactions. 

Each of the Collateral Debt Securities accumulated by the Warehouse Provider in connection with such 

warehousing arrangements will be purchased by the Issuer on the Closing Date at a price equal to the initial 

purchase price paid by the Warehouse Provider therefor, plus certain expenses of the issuance, plus any accrued but 

unpaid interest (regardless of whether the market price of such Collateral Debt Security on the Closing Date is 

higher or lower than the purchase price paid by the Warehouse Provider but after deducting any payments or 

prepayments of principal received by the Warehouse Provider during the accumulation period), adjusted for interest 

rate hedging losses or gains with respect thereto. 

If the Warehouse Provider were to become the subject of an action or proceeding under the United States 

Bankruptcy Code or another applicable insolvency law, the trustee in bankruptcy or other liquidator could assert that 

Collateral Debt Securities acquired from such entity are property of the insolvency estate of such entity. Property 

that the Warehouse Provider has pledged or assigned, or in which the Warehouse Provider has granted a security 

interest, as collateral security for the payment or performance of an obligation, would be property of the estate of the 

Warehouse Provider. Property that the Warehouse Provider has sold or absolutely assigned and transferred to 

another party, however, is not property of the estate of the Warehouse Provider. The Issuer does not expect that the 

purchase by the Issuer of Collateral Debt Securities, under the circumstances contemplated by this Offering Circular, 

will be deemed to be a pledge or collateral assignment (as opposed to the sale or other absolute transfer of such 

Collateral Debt Securities to the Issuer). 

22. Accounting Treatment of Capital Securities. Following the issuance by the Financial Accounting Standards 

Board (the “FASB”) of FASB Interpretation No. 46, Consolidation of Variable Interest Entities (“FIN 46”), in 

January 2003, and of a revised version of FIN 46 (“FIN 46R”) in December 2003, most accounting authorities came 

to the conclusion that, under generally accepted accounting principles, holding company sponsors of trusts issuing 

trust preferred securities must deconsolidate such trusts in the holding companies’ financial statements. As a 

consequence, Affiliated Depository Institutions and Affiliated Insurance Institutions may no longer reflect on their 

balance sheet the trust preferred securities issued out of the trust, but instead must reflect the underlying 

subordinated debentures issued by them to the deconsolidated trust. 

34

The FASB has also issued Statement of Financial Accounting Standards No. 150, Accounting for Certain 

Financial Instruments with Characteristics of both Liability and Equity (“FAS 150”), which provides accounting 

guidance for the balance sheet classification of trust preferred securities as debt. Certain Affiliated Depository 

Institutions and Affiliated Insurance Institutions may not have accounted for previous trust preferred issuances as 

debt. Accordingly, the FAS 150 requirement to treat trust preferred issuances by such Affiliated Depository 

Institutions and Affiliated Insurance Institutions as debt will increase their leverage, which may, among other 

matters, have an adverse impact on their ability to borrow under their credit facilities. 

23. Recent Bank Regulatory Developments. On March 1, 2005, the Federal Reserve adopted final regulations 

relating to its regulatory capital standards for trust preferred securities and alternative tax-efficient instruments. As 

adopted, the final regulations enable bank holding companies to continue to include issuances of trust preferred 

securities in their Tier 1 Capital (notwithstanding the currently prevailing interpretation of FIN 46 and FIN 46R 

described above), subject to stricter quantitative limits and qualitative standards, and subject to a transition period, as 

described below. The final regulations limit the aggregate amount of “restricted core capital elements” that a bank 

holding company can include as Tier 1 Capital for regulatory capital purposes. The term “restricted core capital 

elements” includes, among other capital elements, “qualifying trust preferred securities.” The final regulations 

include specific requirements that must be satisfied for trust preferred securities to qualify as “qualifying trust 

preferred securities.” 

Under the final regulations, the aggregate amount of restricted core capital elements that a bank holding 

company may include in its Tier 1 Capital may not exceed 25% of the sum of the bank holding company’s “core 

capital elements,” net of goodwill less any associated deferred tax liability. The netting goodwill from the 

calculation of the 25% limit represents a tightening of the prior 25% limit. Furthermore, internationally active 

banking organizations are expected to limit the aggregate amount of restricted core capital elements included in Tier 

1 Capital to 15% of the sum of all core capital elements, including restricted core capital elements, net of goodwill 

less any associated deferred tax liability. 

The final regulations provide for a transition period for bank holding companies to meet the new, stricter 

25% regulatory capital limitation by specifying that the limits on restricted core capital elements, including trust 

preferred securities, become fully effective as of March 31, 2009. During the interim period, any bank holding 

company with restricted core capital elements (including trust preferred securities) in excess of the 25% limit is 

required to consult with the Federal Reserve on a plan for ensuring that the banking organization is not unduly 

relying upon restricted core capital elements in its capital base and, where appropriate, for reducing such reliance. 

Additionally, the final regulations require trust preferred securities to be treated as limited-life preferred stock in the 

last five years before the maturity of the underlying subordinated debt. As a result, in the last five years of the life of 

such underlying subordinated debt, the outstanding amount of trust preferred securities must be excluded from Tier 

1 Capital and included in Tier 2 Capital, subject, together with subordinated debt and other limited-life preferred 

stock, to a limit of 50% of Tier 1 Capital. During this period, the trust preferred securities would be amortized out 

of Tier 2 Capital by one-fifth of the original amount (less redemptions) each year and excluded totally from Tier 2 

Capital during the last year of life of the underlying subordinated debt. 

The final regulations also require that the terms of the subordinated debt underlying the trust preferred 

securities conform to the Federal Reserve’s subordinated debt policy statement, 12 CFR 250.166, in addition to 

meeting certain other more stringent requirements, including those relating to the level of subordination and 

definition of senior indebtedness. In particular, the debt policy statement would disallow Tier 1 Capital treatment 

for trust preferred securities sponsored by a bank holding company that are issued on or after April 15, 2005 where 

the underlying subordinated debt contains provisions that permit acceleration in the event of a breach of a structural 

covenant or a default in payments other than defaults described in the next sentence. However, the final regulations 

do permit acceleration upon (i) default of the underlying subordinated debt following the deferral of interest for 

more than five consecutive years, (ii) certain events of bankruptcy, insolvency or reorganization of the sponsoring 

holding company, (iii) the receivership of a major banking subsidiary and (iv) the liquidation of the issuing trust. 

Furthermore, the Federal Reserve stated that trust preferred securities issued before April 15, 2005 for which the 

underlying subordinated debt does not comply with the debt policy statement as so revised may continue to be 

treated as Tier 1 Capital if the noncomplying terms (1) have been commonly used by banking organizations, (2) do 

not provide an unreasonably high degree of protection to the holder in circumstances other than bankruptcy and (3) 

35

do not effectively allow the holder to stand ahead of senior or subordinated debt holders in the event of bankruptcy. 

Approximately 56.6% of the Bank Capital Securities in the Trust Estate were issued before April 15, 2005. 

There can be no assurance that the adoption of the Federal Reserve’s final regulations referred to above will 

not result in the occurrence of a Capital Treatment Event for one or more issuances of Bank Capital Securities. If a 

Capital Treatment Event were to occur, an Affiliated Depository Institution would be able to redeem its 

Corresponding Debentures, thereby causing a mandatory redemption of the related Bank Capital Securities and, in 

accordance with the Priority of Payments, a prepayment of the Notes. In addition, any disallowance of Tier 1 

Capital treatment for the Bank Capital Securities or other trust preferred securities issued by an Affiliated 

Depository Institution’s trust subsidiaries might, depending on the amount of its other regulatory capital, cause such 

Affiliated Depository Institution to fail to meet its minimum regulatory capital requirements. Any such failure 

might adversely affect the Affiliated Depository Institution’s ability to make payments on its Corresponding 

Debentures. 

24. Recent Insurance Regulatory Developments. The insurance industry has recently become the focus of 

increased scrutiny by regulatory and law enforcement authorities as well as the public relating to allegations of 

improper special payments, price-fixing, bid-rigging, improper accounting practices and other alleged misconduct, 

including payments made by insurers to brokers and the practices surrounding the placement of insurance business 

and the sale and use of certain “loss mitigation” or “finite” insurance and reinsurance products and transactions. 

Formal and informal inquiries have been made of a large segment of the industry, and a large number of companies 

in the industry, including the Affiliated Insurance Institutions and Insurance Surplus Note Issuer, have received or 

may receive subpoenas, requests for information from regulatory authorities or other inquiries relating to these and 

similar matters. These efforts are expected to result in both enforcement actions and proposals for new state and 

federal regulation. Certain insurers have also become the subject of civil litigation (including class action suits) 

relating to such matters, and it is possible that such investigations may generate additional civil litigation against 

insurers, even those who do not engage in the business lines or practices currently at issue. It is impossible to predict 

the outcome of these investigations or proceedings, whether they will expand into other areas not yet contemplated, 

whether activities and practices currently thought to be lawful will be characterized as unlawful, what form new 

regulations will have when finally adopted, or the impact, if any, of this increased regulatory and law enforcement 

action and civil litigation with respect to the insurance industry on the Affiliated Insurance Institutions and 

Insurance Surplus Note Issuer. 

From time to time, the Applicable Regulator of the Insurance Surplus Note Issuer may issue rules or 

regulations, or a state legislature may adopt new laws or amend existing laws, or the National Association of 

Insurance Commissioners may amend or issue new guidelines or interpretations, that may impact the regulatory 

capital treatment of its Insurance Surplus Note. There can be no assurance that such rules or regulations, if issued, 

would not adversely affect the regulatory capital treatment of such Insurance Surplus Note. Such action may 

provide an incentive for such Insurance Surplus Note Issuer to redeem its Insurance Surplus Note in accordance with 

its terms. 

25. Cayman Islands Anti-Money Laundering Provisions. The Issuer and the Administrator are subject to antimoney 

laundering laws and regulations in the Cayman Islands which impose specific requirements with respect to 

the obligation “to know your client.” The Issuer will require a detailed verification of each initial investor’s identity 

and the source of the payment used by such investor for purchasing the Notes in a manner similar to the obligations 

imposed under the laws of other major financial centers. If the Cayman Islands government determined that the 

Issuer was in violation of the anti-money laundering provisions, the Issuer could be subject to substantial criminal 

penalties. Payment of any such penalties could materially adversely affect the timing and amount of payments to 

holders of the Notes. 

26. United States Anti-Money Laundering Provisions. The Uniting and Strengthening America By Providing 

Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the “USA PATRIOT Act”), signed 

into law and effective as of October 26, 2001, imposes certain anti-money laundering obligations on “financial 

institutions,” including a requirement under Section 352 that each financial institution adopt an anti-money 

laundering program, policy and procedures. “Financial institution” is broadly defined under the USA PATRIOT Act 

to include various types of entities, including banks, broker-dealers and investment companies, among other entities. 

The USA PATRIOT Act requires the Secretary of the United States Treasury Department (the “Treasury”) to issue 

36

ules and regulations to implement its provisions. Final implementing rules under Section 352 for investment 

companies and certain other types of financial institutions have not yet been issued. Section 314(a) of the USA 

PATRIOT Act provides for the sharing of information by financial institutions with law enforcement authorities 

under certain circumstances. Implementing regulations provide that financial institutions must respond to certain 

requests for information from FinCEN, a division of Treasury. 

It is possible that Treasury will promulgate regulations defining entities such as the Co-Issuers, the Initial 

Purchasers, the Placement Agents or the Collateral Manager or other service providers to be “financial institutions” 

subject to the anti-money laundering program requirement of Section 352 and to the information-sharing 

requirements of Section 314(a) of the USA PATRIOT Act. Such regulations or other anti-money laundering 

legislation could make it necessary for each of the Co-Issuers to implement additional restrictions on the transfer of 

the Notes. In addition, restrictions or other blocking measures with respect to the Notes might be imposed in 

connection with the requirements of the Office of Foreign Assets Control, also a division of Treasury. As may be 

required, the Co-Issuers reserve the right to request such information and take such actions as may be necessary to 

enable them to comply with the provisions of the USA PATRIOT Act. 

27. Certain Matters with respect to German Investors. With effect as of January 1, 2004, the German 

Investment Tax Act (“Investmentsteuergesetz” or “InvStG” or “ITA”) has come into force and replaced the German 

Foreign Investment Act. Adverse tax consequences will arise for investors subject to tax in Germany, if the InvStG 

is applied to the Notes. However, pursuant to a Circular released by the German Federal Ministry of Finance on the 

InvStG, dated June 2, 2005, the InvStG does not apply to CDO vehicles that do not allow more than 20% of the 

assets of the issuer to be traded annually on a discretionary basis, in addition to the mere replacement of debt 

instruments for the purpose of maintaining the volume, the maturity and the risk structure of the CDO. If these 

conditions for non-application of the InvStG are satisfied, the Notes are not subject to the InvStG. 

None of the Issuer, the Initial Purchasers or the Placement Agents makes any representation, warranty or 

other undertaking whatsoever that the Notes are not qualified as unit certificates in a foreign investment fund 

pursuant to Section 1(1) no. 2 of the InvStG. The Issuer will not comply with any calculation and information 

requirements set forth in Section 5 of the InvStG. Prospective German investors in the Notes are urged to seek 

independent tax advice and to consult their professional advisors as to the legal and tax consequences that may arise 

from the application of the InvStG to the Notes, and none of the Issuer, the Initial Purchasers or the Placement 

Agents accepts any responsibility in respect of the tax treatment of the Notes under German law. 

28. Certain ERISA Considerations. For a discussion of certain ERISA considerations to purchasers of the 

Notes, see “Certain ERISA Considerations” herein. 

29. Certain Income Tax Considerations. For a discussion of certain income tax considerations to purchasers of 

the Notes, see “Income Tax Considerations” herein. 

30. Certain Legal Investment Considerations. For a discussion of certain legal investment considerations to 

purchasers of the Notes, see “Certain Legal Investment Considerations” herein. 

The Issuer 

THE ISSUER AND THE CO-ISSUER 

The Issuer was registered on July 12, 2005 as MMCapS Funding XVII, Ltd., under the Companies Law 

(2004 Revision) of the Cayman Islands with registered number MC-151762. The registered office of the Issuer is at 

the offices of its Administrator, Maples Finance Limited, Queensgate House, P.O. Box 1093GT, South Church 

Street, George Town, Grand Cayman, Cayman Islands, and the Administrator’s telephone number is (345) 945- 

7100. The Issuer will appoint CT Corporation System, 111 Eighth Avenue, 13th Floor, New York, New York 

10011 as its agent in New York for service of all process. 

37

The objects of the Issuer as described in clause 3 of its Memorandum of Association are unrestricted except 

as prohibited by law. The Co-Issuers have been established as special purposes entities and will not undertake any 

business other than the issuance of the Class A Notes, Class B Notes and Class C Notes and, in the case of the Issuer 

only, the issuance of the Income Notes, the acquisition, holding and disposition of the Collateral Debt Securities and 

other related transactions. The Issuer has no prior operating history or prior business experience. Cash flow derived 

from the Hedge Agreements and the Collateral Debt Securities securing the Notes will be the only source of funds 

available to make payments in respect of the Notes. 

The Issuer has an authorized capital of U.S.$250 consisting of 250 voting ordinary shares, U.S.$1.00 par 

value per share (the “Ordinary Shares”), all of which will be issued by the Closing Date. 

Maples Finance Limited will act as administrator (in such capacity, the “Administrator”) and will perform 

certain administrative services for the Issuer pursuant to an agreement (the “Administration Agreement”) between 

the Issuer and the Administrator dated on or before the Closing Date. The Administrator may resign or may be 

terminated upon at least three months’ written notice, in which case a replacement Administrator would be 

appointed. All of the Issuer’s Ordinary Shares and all of the common stock of the Co-Issuer will be legally owned 

by Maples Finance Limited (acting in such capacity, the “Share Trustee”), to be held pursuant to the terms of a 

Declaration of Trust. Under the terms of such Declaration of Trust, the Share Trustee will, among other things, 

generally agree not to dispose of or otherwise deal with such Ordinary Shares or Co-Issuer common stock. The 

Share Trustee will have no beneficial interest in and derive no benefit other than its fees from its holding of the 

Ordinary Shares or Co-Issuer common stock. 

The Issuer’s Articles of Association provide that the Board of Directors of the Issuer will consist of at least 

one and not more than ten Directors. A majority of the Directors are required by the Articles of Association to be 

persons who are non-U.S. persons. The Indenture requires that at least one of the Directors be an independent 

director that is, in particular, unaffiliated with the Trustee, the Initial Purchasers and the Placement Agents. The 

Directors of the Issuer as of the Closing Date are expected to be as follows: 

Name Address Occupation 

Helen Allen 

Carrie Bunton 

Wendy Ebanks 

P.O. Box 1093 GT, George Town, Grand Cayman, 

Cayman Islands 





Trust Company Official, 

Maples Finance Limited 





The Issuer’s capitalization and indebtedness as of the Closing Date after giving effect to the issuance of the 

Notes and the Issuer’s Ordinary Shares (before deducting offering expenses) is set forth below: 

Liabilities: 

Class A-1 Notes ............................................................ 

Class A-2 Notes ............................................................ 

Class B Notes................................................................ 

Class C-1 Notes ............................................................ 

Class C-2 Notes ............................................................ 

Income Notes ................................................................ 

Total liabilities .............................................................. 

U.S.$162,000,000 

U.S.$19,500,000 

U.S.$33,000,000 

U.S.$35,475,000 

U.S.$35,475,000 

U.S.$27,000,000 

U.S.$312,450,000 

38

Shareholder’s equity: 

The Co-Issuer 

Ordinary Shares, U.S.$1.00 par value per share, 250 shares 

authorized, 

250 shares issued and outstanding ........................................ U.S.$250 

Retained Earnings........................................................................ 

U.S.$250 

Total shareholders’ equity ............................................ 

U.S.$500 

Total capitalization ....................................................... U.S.$312,450,500 

The Co-Issuer was incorporated on July 13, 2005 as MMCapS Funding XVII, Corp., a corporation under 

the General Corporation Law of the State of Delaware with registered number 3999779. Its registered office is 

located at 850 Library Avenue, Suite 204, County of New Castle, City of Newark, Delaware 19711, and the 

telephone number of its registered agent, Donald J. Puglisi, is (302) 738-6680. 

The Co-Issuer will be capitalized only to the extent of its common equity of U.S.$100, will have no assets 

other than its equity capital, will have no debt other than as co-issuer of the Class A Notes, Class B Notes and Class 

C Notes and will not pledge any assets to secure the Notes. The Co-Issuer will not be an obligor on the Income 

Notes. 

The Director of the Co-Issuer is Donald J. Puglisi. Mr. Puglisi is also the President, Secretary and 

Treasurer of the Co-Issuer. Mr. Puglisi may be contacted at the address of the Co-Issuer. Article 3 of the Co- 

Issuer’s Certificate of Incorporation sets out the objectives of the Co-Issuer. 

DESCRIPTION OF THE NOTES 

The Notes will be issued pursuant to an indenture dated as of the Closing Date among the Issuer, the Co- 

Issuer and the Trustee (the “Indenture”). The following summaries generally describe certain provisions of the 

Notes and the Indenture. The summaries do not purport to be complete and are subject to, and are qualified in their 

entirety by reference to, the provisions of the Notes and the Indenture. When particular provisions or terms used in 

the Notes and the Indenture are referred to, the actual provisions (including definitions of terms) are incorporated 

by reference herein. Documents incorporated by reference in this Offering Circular will not be deemed to constitute 

a part of the Prospectus filed with the Irish Financial Services Regulatory Authority and the Irish Stock Exchange in 

connection with the approval of the Prospectus and the listing of the Notes. Copies of the Indenture may be 

obtained by Noteholders upon request in writing to the Trustee at its Corporate Trust Office and by prospective 

purchasers of Notes from the Initial Purchasers or the Placement Agents. The Notes and the payment obligations of 

the Issuer under any Hedge Agreements will be secured by the Trust Estate, including the Collateral Debt 

Securities. See “Security for the Notes.” Definitions of certain defined terms used below are set forth in the 

Glossary set forth as Annex A hereto, and an index of certain defined terms used herein appears as Annex B hereto. 

The Indenture limits the amount of Notes that can be issued thereunder to (i) U.S.$162,000,000 aggregate 

principal amount of Class A-1 Floating Rate Notes Due 2035 (the “Class A-1 Notes”), (ii) U.S.$19,500,000 

aggregate principal amount of Class A-2 Floating Rate Notes Due 2035 (the “Class A-2 Notes” and, together with 

the Class A-1 Notes, the “Class A Notes”), (iii) U.S.$33,000,000 aggregate principal amount of Class B Floating 

Rate Notes Due 2035 (the “Class B Notes”), (iv) U.S.$35,475,000 aggregate principal amount of Class C-1 Floating 

Rate Deferrable Interest Notes Due 2035 (the “Class C-1 Notes”), (v) U.S.$35,475,000 aggregate principal amount 

of Class C-2 Fixed Rate Deferrable Interest Notes Due 2035 (the “Class C-2 Notes” and, together with the Class C-1 

Notes, the “Class C Notes”), and (vi) U.S.$27,000,000 aggregate principal amount of Subordinate Income Notes 

Due 2035 (the “Income Notes” and, together with the Class A Notes, Class B Notes and Class C Notes, the 

“Notes”). 

39

The Class A Notes, Class B Notes and Class C Notes will be issued in minimum denominations of 

U.S.$250,000 and integral multiples of U.S.$1,000 in excess thereof. The Income Notes will be issued in minimum 

denominations of U.S.$100,000 and integral multiples of U.S.$1,000 in excess thereof. 

The record date for each Payment Date (including the Stated Maturity Date) is the fifteenth day (whether or 

not a Business Day) prior to such Payment Date (the “Record Date”). Payments of interest and principal in respect 

of the Notes will be made on each Payment Date as described in “—Payments on the Notes— General.” Notice will 

be mailed to each Noteholder of record no later than five Business Days before the Payment Date on which the final 

principal payment is expected to be made to such Noteholder (other than on the Stated Maturity Date). 

Under the terms of the Indenture, the Trustee is paying agent (in such capacity, the “Paying Agent”) for the 

Notes. Custom House Administration and Corporate Services Limited, or any successor thereto, will act as paying 

agent (“Paying Agent in Ireland”) for the Notes so long as any Notes are listed on the Irish Stock Exchange. 

Payments of principal of and interest on the Notes will be made from Available Funds in the Collection Accounts as 

described herein and, under certain circumstances, from amounts on deposit in the Class A/B Reserve Account, as 

described herein. 

All collections in respect of Collateral Debt Securities in the Trust Estate (other than premiums that are 

received in connection with the redemption of Collateral Debt Securities and deposited into the Class A/B Reserve 

Account and interest payments deposited into the Semiannual Receipts Account with respect to Collateral Debt 

Securities whose distributions are, or interest is, payable semiannually) will be deposited directly into the Interest 

Collection Account or the Principal Collection Account and will be available to the extent described herein for the 

payment of amounts payable in respect of the Notes and for the other purposes described herein and set forth in the 

Indenture. 

Payments on the Notes 

General 

Subject to the availability of funds and to the Priority of Payments, the Class A-1 Notes, Class A-2 Notes, 

Class B Notes, Class C-1 Notes and Class C-2 Notes will provide for the payment of periodic interest (“Periodic 

Interest” with respect to each such class of Notes) on March 1, June 1, September 1 and December 1 of each year, 

beginning in December 2005 and continuing through the Final Maturity Date for each class of Class A Notes, Class 

B Notes and Class C Notes or, if any such day is not a Business Day, then the next succeeding Business Day (each 

such date, a “Payment Date”). The applicable Periodic Interest Accrual Period will be extended for the Class A-1 

Notes, Class A-2 Notes, Class B Notes and Class C-1 Notes as a result of the foregoing, and interest will accrue on 

the Class A-1 Notes, Class A-2 Notes, Class B Notes and Class C-1 Notes for any additional days that payment is 

delayed as a result thereof. 

Interest on the Class A-1 Notes, Class A-2 Notes, Class B Notes, Class C-1 Notes and Class C-2 Notes will 

accrue from and including the Closing Date and will be payable quarterly in arrears on each Payment Date to the 

Holders thereof as of the related Record Date. Interest on the Class A-1 Notes, Class A-2 Notes, Class B Notes and 

Class C-1 Notes will be computed for each Periodic Interest Accrual Period on the basis of a 360-day year and the 

actual number of days in such Periodic Interest Accrual Period. Interest on the Class C-2 Notes will be computed for 

each Periodic Interest Accrual Period on the basis of a 360-day year consisting of twelve 30-day months. “Periodic 

Interest Accrual Period” means (i) with respect to the initial Payment Date, the period from and including the 

Closing Date to, but excluding, the initial Payment Date, and (ii) thereafter, with respect to each Payment Date, the 

period beginning on the first day following the end of the preceding Periodic Interest Accrual Period and ending on 

the day before such Payment Date; provided, however, that with respect to the Class C-2 Notes only, the Periodic 

Interest Accrual Period shall end on the day before March 1, June 1, September 1 and December 1 regardless of 

whether such day is a Business Day. 

Principal of and interest on the Notes will be payable in U.S. dollars. Such payments will be made to a 

Holder of a Certificated Note by wire transfer to an account maintained at a bank by the Holder thereof in 

immediately available funds or, if appropriate instructions are not received at least 15 days prior to the relevant 

Payment Date, by check drawn on a U.S. bank mailed to the address of the Holder specified in the Note Register. 

40

Amounts payable on Certificated Notes due at maturity will be paid upon presentation of such Note at the office of 

any paying agent designated for such purpose under the Indenture. Payment of any amounts due other than at 

maturity of Certificated Notes will be payable to the persons in whose name such Notes are registered at the close of 

business on the Record Date with respect to the relevant Payment Date. In the event that the Issuer issues or causes 

to be issued any Physical Notes in exchange for the applicable Global Note in the limited circumstances described in 

“Description of the Notes— Form, Denomination and Registration,” payment of interest on and principal of such 

Physical Notes will be made in the same manner as payment of interest on and principal of Certificated Notes. 

Payments of the principal of and interest on a Global Note will be made to DTC or its nominee, as the 

registered owner thereof. The Issuer, the Trustee and any paying agent will not have any responsibility or liability 

for any aspect of the records relating to or payments made on account of beneficial ownership interests in a Global 

Note or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests. 


The Class A-1 Notes will bear interest at a per annum rate equal to LIBOR (determined as set forth herein) 

plus 0.35% (the “Applicable Periodic Rate” for the Class A-1 Notes). The Class A-1 Notes will provide for the 

payment of Periodic Interest on each Payment Date through the Payment Date occurring in December 2035 (the 

“Stated Maturity Date”) or such earlier date on which the Aggregate Principal Amount of the Class A-1 Notes is 

paid in full in accordance with the Priority of Payments, including such payment in full in connection with a 

Coverage Prepayment, a payment of principal in accordance with the Priority of Payments (including a Redemption 

Prepayment), an Optional Notes Redemption, a Mandatory Auction Call, or, on and after the Turbo Date, any 

additional principal payments as described herein (such date, the “Class A-1 Final Maturity Date”). See 

“Description of the Notes— Priority of Payments.” 


The Class A-2 Notes will bear interest at a per annum rate equal to LIBOR (determined as set forth herein) 

plus 0.45% (the “Applicable Periodic Rate” for the Class A-2 Notes). The Class A-2 Notes will provide for the 

payment of Periodic Interest on each Payment Date through the Stated Maturity Date or such earlier date on which 

the Aggregate Principal Amount of the Class A-2 Notes is paid in full in accordance with the Priority of Payments, 

including such payment in full in connection with a Coverage Prepayment, a payment of principal in accordance 

with the Priority of Payments (including a Redemption Prepayment), an Optional Notes Redemption, a Mandatory 

Auction Call, or, on and after the Turbo Date, any additional principal payments as described herein (such date, the 

“Class A-2 Final Maturity Date”). See “Description of the Notes— Priority of Payments.” 

Class B Notes 

The Class B Notes will bear interest at a per annum rate equal to LIBOR (determined as set forth herein) 

plus 0.60% (the “Applicable Periodic Rate” for the Class B Notes). The Class B Notes will provide for the payment 

of Periodic Interest on each Payment Date through the Stated Maturity Date or such earlier date on which the 

Aggregate Principal Amount of the Class B Notes is paid in full in accordance with the Priority of Payments, 




“Class B Final Maturity Date”). See “Description of the Notes— Priority of Payments.” 


The Class C-1 Notes will bear interest at a per annum rate equal to LIBOR (determined as set forth herein) 

plus 1.20% (the “Applicable Periodic Rate” for the Class C-1 Notes). The Class C-1 Notes will provide for the 

payment of Periodic Interest on each Payment Date through the Stated Maturity Date or such earlier date on which 

the Aggregate Principal Amount of the Class C-1 Notes is paid in full in accordance with the Priority of Payments, 



41


“Class C-1 Final Maturity Date”). Interest payments on the Class C-1 Notes will be paid pro rata with interest 

payments on the Class C-2 Notes in accordance with the Priority of Payments based on the respective amounts of 

Periodic Interest due thereon. See “Description of the Notes— Priority of Payments.” 

For so long as any of the Class A Notes or Class B Notes are Outstanding, to the extent that funds are not 

available in accordance with the Priority of Payments on any Payment Date to pay Periodic Interest otherwise due 

on the Class C-1 Notes for such Payment Date, such interest (the “Class C-1 Note Deferred Interest”) will not be due 

and payable on such date, but will be added to the Aggregate Principal Amount of the Class C-1 Notes and 

thereafter will bear interest at the Applicable Periodic Rate, to the extent permitted by law. Consequently, the failure 

to pay any Periodic Interest due on the Class C-1 Notes will not be an Event of Default so long as any of the Class A 

Notes or Class B Notes are Outstanding. 


The Class C-2 Notes will bear interest at a per annum rate (the “Applicable Periodic Rate” for the Class 

C-2 Notes) equal to 6.0825% per annum. The Class C-2 Notes will provide for the payment of Periodic Interest on 

each Payment Date through the Stated Maturity Date or such earlier date on which the Aggregate Principal Amount 

of the Class C-2 Notes is paid in full in accordance with the Priority of Payments, including such payment in full in 

connection with a Coverage Prepayment, a payment of principal in accordance with the Priority of Payments 

(including a Redemption Prepayment), an Optional Notes Redemption, a Mandatory Auction Call, or, on and after 

the Turbo Date, any additional principal payments as described herein (such date, the “Class C-2 Final Maturity 

Date”). Interest payments on the Class C-2 Notes will be paid pro rata with the interest payments on the Class C-1 

Notes in accordance with the Priority of Payments based on the respective amounts of Periodic Interest due thereon. 

See “Description of the Notes— Priority of Payments.” 

For so long as any of the Class A Notes or Class B Notes are Outstanding, to the extent that funds are not 

available in accordance with the Priority of Payments on any Payment Date to pay Periodic Interest otherwise due 

on the Class C-2 Notes for such Payment Date, such interest (the “Class C-2 Note Deferred Interest”) will not be due 

and payable on such date, but will be added to the Aggregate Principal Amount of the Class C-2 Notes and 

thereafter will bear interest at the Applicable Periodic Rate, to the extent permitted by law. Consequently, the failure 

to pay any Periodic Interest due on the Class C-2 Notes will not be an Event of Default so long as any of the Class A 

Notes or Class B Notes are Outstanding. 

Determination of LIBOR 

For the purposes of determining the Applicable Periodic Rates for the Class A-1 Notes, the Class A-2 

Notes, the Class B Notes and the Class C-1 Notes (collectively, the “Floating Rates”), the Co-Issuers will initially 

appoint the Trustee as calculation agent (the “Calculation Agent”). For each Periodic Interest Accrual Period, 

LIBOR, with respect to the Notes, shall be determined by the Calculation Agent in accordance with the following 

provisions: 

(i) LIBOR shall equal the rate, as obtained by the Calculation Agent for three-month U.S. 

Dollar deposits in Europe which appears on Telerate (as defined in the International Swaps and Derivatives 

Association, Inc. 2000 Interest Rate and Currency Exchange Definitions) page 3750 or such other page as 

may replace such page 3750, as of 11:00 a.m. (London time) on such LIBOR Determination Date, as 

reported by Bloomberg Financial Markets Commodities News or any successor service (“Telerate Page 

3750”); provided, however, that, in the case of the first Periodic Interest Accrual Period, LIBOR will be 

LIBOR for three-month U.S. Dollar deposits in Europe. The “LIBOR Determination Date” for each 

Periodic Interest Accrual Period shall be the second London Banking Day prior to the first day of such 

Periodic Interest Accrual Period. “London Banking Day” means any day on which commercial banks are 

open for general business (including dealings in foreign exchange and foreign currency deposits) in 

London. If such rate is superseded on Telerate Page 3750 by a corrected rate before 12:00 noon (London 

time) on the same LIBOR Determination Date, the corrected rate as so substituted will be the applicable 

LIBOR for that LIBOR Determination Date. 

42

(ii) If, on any LIBOR Determination Date, such rate does not appear on Telerate Page 3750 

as reported by Bloomberg Financial Markets Commodities News or such other page as may replace such 

Telerate Page 3750, the Calculation Agent shall determine the arithmetic mean of the offered quotations of 

the Reference Banks (as defined below) to leading banks in the London interbank market for three-month 

U.S. Dollar deposits in Europe in an amount determined by the Calculation Agent by reference to requests 

for quotations as of approximately 11:00 a.m. (London time) on the LIBOR Determination Date made by 

the Calculation Agent to the Reference Banks. If, on any LIBOR Determination Date, at least two of the 

Reference Banks provide such quotations, LIBOR shall equal the arithmetic mean of such quotations. If, 

on any LIBOR Determination Date, only one or none of the Reference Banks provides such a quotation, 

LIBOR shall be deemed to be the arithmetic mean of the offered quotations that at least two leading banks 

in the City of New York selected by the Calculation Agent are quoting on the relevant LIBOR 

Determination Date for three-month loans in U.S. Dollars to leading European banks at approximately 

11:00 a.m. (New York City time) in an amount determined by the Calculation Agent; provided, however, 

that if the Calculation Agent is required but is unable to determine a rate in accordance with at least one of 

the procedures provided above, LIBOR shall be LIBOR in effect on the previous LIBOR Determination 

Date (whether or not LIBOR for such period was in fact determined on such LIBOR Determination Date). 

Agent. 

“Reference Banks” means four major banks in the London interbank market selected by the Calculation 

As soon as possible after 11:00 a.m. (London time) on each LIBOR Determination Date, but in no event 

later than 11:00 a.m. (London time) on the Business Day immediately following each LIBOR Determination Date, 

the Calculation Agent will notify the Co-Issuers, the Collateral Manager, each Hedge Counterparty, the Trustee, 

each paying agent, the Irish Stock Exchange (so long as any Notes are listed thereon) and, if applicable, Euroclear 

and Clearstream of the Applicable Periodic Rates for the next Periodic Interest Accrual Period and the amount of 

interest for such Periodic Interest Accrual Period payable on the related Payment Date in respect of each 

U.S.$100,000 principal amount of the Class A-1 Notes, the Class A-2 Notes, the Class B Notes and the Class C-1 

Notes (collectively, the “Floating Rate Notes”) (in each case rounded to the nearest cent, with half a cent being 

rounded upward). The Calculation Agent will also specify to the Co-Issuers the quotations upon which the 

Applicable Periodic Rates are based. The Calculation Agent shall in any event notify the Co-Issuers before 5:00 

p.m. (London time) on each LIBOR Determination Date that either: (i) it has determined or is in the process of 

determining the Applicable Periodic Rates and the applicable amount of Periodic Interest for the Floating Rate 

Notes or (ii) it has not determined and is not in the process of determining the Applicable Periodic Rate and the 

applicable amount of Periodic Interest for the Floating Rate Notes, together with its reasons therefor. 

The determination of the Floating Rates by the Calculation Agent shall (in the absence of manifest error) be 

final and binding upon all parties. 

The Calculation Agent may be removed by the Co-Issuers at any time. If the Calculation Agent is removed 

by the Co-Issuers, if the Calculation Agent is unwilling to act as such, or if the Calculation Agent fails to determine 

any of the information required to be calculated in accordance with the two preceding paragraphs, then the Co- 

Issuers will promptly appoint as a replacement Calculation Agent a leading bank which is engaged in transactions in 

U.S. Dollar deposits in the Eurodollar market and which does not control or is not controlled by or under common 

control with the Co-Issuers or their Affiliates. No resignation or removal of the Calculation Agent shall be effective 

without a successor having been duly appointed in accordance with the Indenture. 

Principal Payments 

Subject to the availability of funds and in accordance with the Priority of Payments, principal payments on 

the Class A Notes, Class B Notes and Class C Notes will be made (a) prior to the Stated Maturity Date only (i) when 

Principal Collections are available for such application in accordance with clause (b) of the Priority of Payments, (ii) 

if the Coverage Tests are not met, (iii) on and after the Turbo Date, to pay principal on the Class A Notes, Class B 

Notes and Class C Notes as described herein, (iv) upon an Optional Notes Redemption or (v) upon a Mandatory 

Auction Call or (b) on the Stated Maturity Date from the proceeds of the payments received at maturity of the 

Collateral Debt Securities. Redemptions of Collateral Debt Securities will result in prepayments on the Notes in 

accordance with the Priority of Payments. The Collateral Debt Securities may not be prepaid in accordance with 

43

their terms before their respective initial optional redemption dates except in connection with the occurrence of a 

Special Event. See “Security for the Notes— Portfolio Statistics,” “Security for the Notes— Description of the Bank 

Capital Securities— Terms of the Bank Capital Securities— Redemption and Prepayments,” “Security for the 

Notes— Description of the Bank Subordinated Notes— Redemption and Prepayments,” “Security for the Notes— 

Description of the Insurance Capital Securities— Terms of the Insurance Capital Securities— Redemption and 

Prepayments” and “Security for the Notes— Description of the Insurance Surplus Note— Maturity; Redemption.” 

Income Notes 

The Holders of the Income Notes will not be entitled to payments of interest at a stated rate, but will be 

entitled to receive all excess funds available for distribution on each Payment Date in accordance with the Priority of 

Payments. Following the liquidation of the Trust Estate and the distribution of any available remaining funds, the 

Income Notes will be canceled and deemed paid in full for all purposes whether or not they have received payments 

in respect of principal equal to their stated principal amount. In addition, the Holders of 66-2/3% (by Aggregate 

Principal Amount) of the Income Notes may direct a redemption of the Income Notes in whole on any Payment Date 

after the Class A Notes, Class B Notes and Class C Notes have been paid in full. See “Description of the Notes— 

Clean Up Call.” 

Pursuant to clause (a)(xiii) of the Priority of Payments, on each Payment Date occurring on or after the 

Turbo Date, the Holders of the Class A Notes, Class B Notes or Class C Notes then Outstanding will receive 

additional principal payments from 60% of the amount of Interest Collections (if any) that would otherwise have 

been available for payments on the Income Notes, in the sequential order and priority set forth in clause (a)(xiii) of 

the Priority of Payments. Consequently, on and after the Turbo Date and for so long as the Class A Notes, Class B 

Notes and Class C Notes remain Outstanding, payments on the Income Notes on each Payment Date will be 

reduced. 

Priority of Payments 

Interest and Principal Collections 

On each Payment Date occurring prior to the Stated Maturity Date (including any Final Maturity Date and, 

if funds become available after a Final Maturity Date, on any date after a Final Maturity Date) and in accordance 

with the Note Valuation Report for the Calculation Date immediately preceding such Payment Date, the Trustee 

shall withdraw funds (i) from the Collection Accounts to the extent of Available Funds, (ii) from the Class A/B 

Reserve Account in the amount of the Shortfall Amount, if any, (iii) from the Class A/B Reserve Account if the 

Aggregate Principal Amounts of the Class A Notes and the Class B Notes have been reduced to zero, and (iv) from 

the Expense Reserve Account in the full amount thereof on the first Payment Date following the reduction of the 

Principal Balance of the Collateral Debt Securities to zero, and shall make distributions on behalf of the Issuer in the 

following manner: 

(a) from the Interest Collection Account, funds representing Interest Collections as of the related 

Calculation Date shall be distributed in the following order of priority (such order of priority, together with the order 

of priority set forth in clause (b) below, the “Priority of Payments” ): 

(i) in the following order, (a) to pay taxes and governmental fees payable by the Co-Issuers, 

if any; and then (b) to pay the Trustee the amount of any due and unpaid Trustee Fee; and then (c) to pay 

the Trustee the amount of any due and unpaid Trustee Expenses, and thereafter any other due and unpaid 

expenses (including other amounts payable to the Collateral Administrator under the Collateral 

Administration Agreement and other Administrative Expenses) of the Co-Issuers (including the Irish Stock 

Exchange fee but excluding the Collateral Management Fee (but including other amounts for which the 

Collateral Manager may claim reimbursement pursuant to the Collateral Management Agreement)); and 

then (d) to deposit into the Expense Reserve Account the amount needed to bring the amount on deposit 

therein (including all reinvestment income credited thereto) to U.S.$50,000; provided, however, that the 

cumulative amount paid under Subclauses (c) and (d) (excluding any accounting fees that the Trustee is 

required to pay and any fees the Trustee pays in connection with Events of Default or any default of the 

44

Collateral Debt Securities) may not exceed U.S.$350,000 in the aggregate in any consecutive twelve (12) 

month period; 

(ii) 

to pay to the Collateral Manager any accrued and unpaid Collateral Management Fee; 

(iii) to pay each Hedge Counterparty (a) any amounts due to such Hedge Counterparty under 

the related Hedge Agreement (other than termination payments) and (b) notwithstanding clause (a), any 

termination payments, which include any partial termination payments in connection with a Hedge 

Reduction, due to such Hedge Counterparty as a result of a Hedge Priority Event; 

(iv) to pay in the following order, (a) Periodic Interest on the Class A-1 Notes at the 

Applicable Periodic Rate (and Defaulted Interest on the Class A-1 Notes, if any) and then (b) Periodic 

Interest on the Class A-2 Notes at the Applicable Periodic Rate (and Defaulted Interest on the Class A-2 

Notes, if any); 

(v) to pay Periodic Interest on the Class B Notes at the Applicable Periodic Rate (and 

Defaulted Interest on the Class B Notes, if any); 

(vi) if either Class A/B Coverage Test is not met as of the related Calculation Date, in the 

following order, (a) to pay principal of the Class A-1 Notes until the Class A/B Coverage Tests are satisfied 

as of the related Calculation Date or until the Aggregate Principal Amount of such Notes has been reduced 

to zero, and then (b) to pay principal of the Class A-2 Notes until the Class A/B Coverage Tests are 

satisfied as of the related Calculation Date or until the Aggregate Principal Amount of such Notes has been 

reduced to zero, and then (c) to pay principal of the Class B Notes until the Class A/B Coverage Tests are 

satisfied as of the related Calculation Date or until the Aggregate Principal Amount of such Notes has been 

reduced to zero; 

(vii) to pay Periodic Interest on the Class C-1 Notes at the Applicable Periodic Rate and the 

Class C-2 Notes at the Applicable Periodic Rate, pro rata based on the respective amounts of Periodic 

Interest due thereon (including Defaulted Interest, but excluding any Class C-1 Note Deferred Interest and 

Class C-2 Note Deferred Interest with respect to the Class C-1 Notes and Class C-2 Notes, respectively); 

(viii) if either Class C Coverage Test is not met as of the related Calculation Date, in the 

following order, (a) to pay principal of the Class A-1 Notes until the Class C Coverage Tests are satisfied 


to zero, and then (b) to pay principal of the Class A-2 Notes until the Class C Coverage Tests are satisfied 


to zero, and then (c) to pay principal of the Class B Notes until the Class C Coverage Tests are satisfied as 

of the related Calculation Date or until the Aggregate Principal Amount of such Notes has been reduced to 

zero, and then (d) to pay principal of the Class C-1 Notes and Class C-2 Notes, pro rata (based on the 

respective Aggregate Principal Amounts thereof), until the Class C Coverage Tests are satisfied as of the 

related Calculation Date or until the Aggregate Principal Amounts of such Notes has been reduced to zero; 

(ix) to the payment of Class C-1 Note Deferred Interest and Class C-2 Note Deferred Interest 

on the Class C-1 Notes and Class C-2 Notes, respectively (pro rata based on the amounts of Class C-1 Note 

Deferred Interest and Class C-2 Note Deferred Interest outstanding and in reduction of the principal 

amounts of the Class C-1 Notes and Class C-2 Notes); 

(x) to pay each Hedge Counterparty any termination payments to the extent not paid pursuant 

to clause (iii) above; 

(xi) to pay any due and unpaid Trustee Expenses and expenses of the Co-Issuers to the extent 

not paid pursuant to clause (i) above because of the limitations in the proviso to Subclauses (c) and (d) 

thereof; 

45

(xii) (A) on each Payment Date on and prior to the Payment Date in September 2008 and on 

which any Class A Notes or Class B Notes remain Outstanding, remaining Interest Collections in an 

amount up to U.S.$41,667 will be deposited into the Class A/B Reserve Account, and (B) on each Payment 

Date after such Payment Date in September 2008 on which any Class A Notes or Class B Notes remain 

Outstanding and the balance in the Class A/B Reserve Account is less than U.S.$500,000 (including all 

reinvestment income credited thereto), 5% of all remaining Interest Collections will be deposited into the 

Class A/B Reserve Account until the amount on deposit therein equals U.S.$500,000 (including all 

reinvestment income credited thereto); 

(xiii) on each Payment Date on or after the Turbo Date, 60% of any remaining Interest 

Collections in the following order, (a) to pay principal of the Class A-1 Notes until the Aggregate Principal 

Amount of such Notes has been reduced to zero, and then (b) to pay principal of the Class A-2 Notes until 

the Aggregate Principal Amount of such Notes has been reduced to zero, and then (c) to pay principal of 

the Class B Notes until the Aggregate Principal Amount of such Notes has been reduced to zero, and then 

(d) to pay principal of the Class C-1 Notes and Class C-2 Notes, pro rata (based on the respective 

Aggregate Principal Amounts thereof), until the Aggregate Principal Amounts of such Notes has been 

reduced to zero; and 

(xiv) 

all remaining Interest Collections to the Holders of the Income Notes. 

(b) from the Principal Collection Account, funds representing Principal Collections as of such 

Calculation Date and funds withdrawn from the Expense Reserve Account as described in subclause (iv) of the first 

paragraph under the heading “—Priority of Payments” above shall be distributed in the following order of priority: 

(i) to pay the amounts described in clauses (a)(i) through (a)(v) of the Priority of Payments 

in the same order of priority specified therein, but only to the extent not paid in full thereunder; 

(ii) 

paid in full; 

(iii) 

paid in full; 

to the payment of principal of the Class A-1 Notes until the Class A-1 Notes have been 

to the payment of principal of the Class A-2 Notes until the Class A-2 Notes have been 

in full; 

(iv) 

to the payment of principal of the Class B Notes until the Class B Notes have been paid 

(v) so long as no Class A Notes or Class B Notes are Outstanding, to the payment of the 

amounts described in clause (a)(vii) above, in the same order of priority specified therein, but only to the 

extent not paid in full thereunder; 

(vi) to the payment of the portion of the principal of the Class C-1 Notes and Class C-2 Notes 

constituting Class C-1 Note Deferred Interest and Class C-2 Note Deferred Interest, respectively, to the 

extent not paid in full pursuant to clause (a)(ix) above (pro rata based on the amounts of Class C-1 Note 

Deferred Interest and Class C-2 Note Deferred Interest outstanding), and then to the remaining unpaid 

principal of the Class C-1 Notes and the Class C-2 Notes, pro rata (based on the respective Aggregate 

Principal Amounts thereof), until the Class C-1 Notes and the Class C-2 Notes have been paid in full; 

(vii) to pay each Hedge Counterparty any termination payments to the extent not paid pursuant 

to clause (a)(iii) of the Priority of Payments; 

(viii) to pay the amounts described in clause (a)(xi) of the Priority of Payments, but only to the 

extent not paid in full thereunder; and 

(ix) 

all remaining Principal Collections to the Holders of the Income Notes. 

46

If any SPV Trustee Expenses remain unpaid after disbursements have been made in accordance with 

clauses (a)(i) through (a)(xi) and clauses (b)(i) through (b)(viii) of the Priority of Payments, so long as the Class A 

Notes or Class B Notes are Outstanding, amounts on deposit in the Class A/B Reserve Account on a Payment Date, 

if any, will be applied to pay such expenses. 

For a description of the order of priority for distributions on the Stated Maturity Date or after the Notes 

have been accelerated in connection with an Event of Default, see “Legal Structure— The Indenture— Events of 

Default”. 

Application of Sale Proceeds upon Clean Up Call 

On any Payment Date on which a Clean Up Call is scheduled, the Trustee shall withdraw funds (i) from the 

Collection Accounts to the extent of Available Funds and (ii) from the Class A/B Reserve Account, the Expense 

Reserve Account and the Semiannual Receipts Account, in each case in the full amount on deposit therein, and shall 

make disbursements on behalf of the Issuer in the following order of priority: (a) the amounts set forth in clauses 

(a)(i) through (a)(iii) above, in that order; (b) the amounts set forth in clauses (a)(x) and (a)(xi) above, in that order; 

and (c) all remaining amounts to the Holders of Income Notes. 

Coverage Tests and Prepayments 

Class A/B Coverage Tests and Coverage Prepayments 

At any time that any of the Class A Notes or Class B Notes are Outstanding, if either Class A/B Coverage 

Test described below is not satisfied as of the Calculation Date relating to any Payment Date, certain of the amounts 

that would otherwise be used on such Payment Date for payments on the Class C Notes or Income Notes and certain 

expenses of the Co-Issuers if the Class A/B Coverage Tests were satisfied will instead be applied on such Payment 

Date, in accordance with the Priority of Payments, in each case, to the extent necessary to satisfy the Class A/B 

Coverage Tests, to principal payments on the Class A-1 Notes then Outstanding until the Aggregate Principal 

Amount of the Class A-1 Notes is reduced to zero, then to principal payments on the Class A-2 Notes then 

Outstanding until the Aggregate Principal Balance of the Class A-2 Notes is reduced to zero, and then to principal 

payments on the Class B Notes then Outstanding until the Aggregate Principal Balance of the Class B Notes is 

reduced to zero (“Class A/B Coverage Prepayments”), in each case, without payment of any make-whole amount or 

redemption premium. 

Class A/B Interest Coverage Test 

On any Calculation Date, the “Class A/B Interest Coverage Test” will be satisfied if the ratio of (x) to (y) 

equals or exceeds 125%, where (x) is an amount (the “Interest Coverage Amount”) equal to the sum of (a) the 

aggregate amount of Interest Collections received during the related Due Period, plus (b) the amount on deposit in 

the Class A/B Reserve Account as of such Calculation Date, plus (c) any amounts received or due to be received 

from each Hedge Counterparty after the prior Payment Date (or Closing Date in the case of the first Payment Date) 

and on or before the related Payment Date, minus (d) any amounts paid or due to be paid to each Hedge 

Counterparty after the prior Payment Date (or Closing Date in the case of the first Payment Date) and on or before 

the related Payment Date, minus (e) the amount expected to be payable as Aggregate Fees and Expenses on the 

Payment Date immediately following such Calculation Date and (y) is an amount equal to the sum of the Periodic 

Interest Amounts for the Class A Notes and Class B Notes for the related Payment Date. 

For purposes of calculating the Interest Coverage Amount, Interest Collections will not include any 

Deferred Interest on any Collateral Debt Securities. 

Class A/B Principal Coverage Test 

On any Calculation Date, the “Class A/B Principal Coverage Test” will be satisfied if the ratio of (x) to (y) 

equals or exceeds 125%, where (x) is an amount (the “Principal Coverage Amount”) equal to the sum of (i) the 

amount of Principal Collections in the Principal Collection Account on such date, (ii) the Aggregate Principal 

47

Amount of (a) the Collateral Debt Securities (other than Defaulted Securities) and (b) Eligible Investments (other 

than Defaulted Securities) that represent Principal Collections, in each case in the Trust Estate on such Calculation 

Date and (iii) 5% of the aggregate Principal Balance of all Defaulted Securities in the Trust Estate on such 

Calculation Date and (y) is the sum of the Aggregate Principal Amounts of the Class A Notes and Class B Notes 

then Outstanding as of such date. 

Class C Coverage Tests and Coverage Prepayments 

At any time that any of the Class C Notes are Outstanding, if either Class C Coverage Test described below 

is not satisfied as of the Calculation Date relating to any Payment Date (after giving effect to all prior payments to 

be made, in accordance with the Priority of Payments, to satisfy the Class A/B Coverage Tests), certain of the 

amounts that would otherwise be used on such Payment Date for payments on the Income Notes and certain 

expenses of the Co-Issuers if the Class C Coverage Tests were satisfied will instead be applied on such Payment 

Date in accordance with the Priority of Payments to principal payments on the Class A-1 Notes then Outstanding 

until such Class C Coverage Tests are satisfied or the Class A-1 Notes are paid in full, then to principal payments on 

the Class A-2 Notes then Outstanding until such Class C Coverage Tests are satisfied or the Class A-2 Notes are 

paid in full, then to principal payments on the Class B Notes then Outstanding until such Class C Coverage Tests are 

satisfied or the Class B Notes are paid in full, and when the Class A Notes and Class B Notes have been paid in full, 

to the extent necessary to satisfy the Class C Coverage Tests, to principal payments on the Class C-1 Notes and 

Class C-2 Notes then Outstanding, pro rata (based on the respective Aggregate Principal Amounts thereof), until 

such Class C Coverage Tests are satisfied or the Class C Notes are paid in full (“Class C Coverage Prepayments” 

and, together with the Class A/B Coverage Prepayments, “Coverage Prepayments”), in each case, without payment 

of any make-whole amount or redemption premium. 

Class C Interest Coverage Test 

On any Calculation Date, the “Class C Interest Coverage Test” will be satisfied if the ratio of (x) to (y) 

equals or exceeds 105%, where (x) is the Interest Coverage Amount and (y) is an amount equal to the sum of (a) the 

Periodic Interest Amount for the Class A Notes for the related Payment Date, (b) the Periodic Interest Amount for 

the Class B Notes for the related Payment Date and (c) the Periodic Interest Amount for the Class C Notes for the 

related Payment Date. 

Class C Principal Coverage Test 

On any Calculation Date, the “Class C Principal Coverage Test” will be satisfied if the ratio of (x) to (y) 

equals or exceeds 102.1%, where (x) is the Principal Coverage Amount and (y) is the sum of (a) the Aggregate 

Principal Amount of the Class A Notes then Outstanding (after giving effect to any Coverage Prepayments to be 

made on the Class A Notes on the related Payment Date as a result of the application of the Class A/B Coverage 

Tests), (b) the Aggregate Principal Amount of the Class B Notes then Outstanding (after giving effect to any 

Coverage Prepayments to be made on the Class B Notes on the related Payment Date as a result of the application of 

the Class A/B Coverage Tests) and (c) the Aggregate Principal Amount of the Class C Notes then Outstanding. 

Redemption Prepayments 

If the Principal Balance of any Collateral Debt Security is prepaid pursuant to the terms of such Collateral 

Debt Security, or otherwise called, prior to its maturity date as described below under “Security for the Notes— 

Description of the Bank Capital Securities— Terms of the Bank Capital Securities— Redemption and Prepayments,” 

“Security for the Notes— Description of the Bank Subordinated Notes— Redemption and Prepayments,” “Security 

for the Notes— Description of the Insurance Capital Securities— Terms of the Insurance Capital Securities— 

Redemption and Prepayments” and “Security for the Notes— Description of the Insurance Surplus Note— Maturity; 

Redemption,” then (i) an amount equal in the aggregate to the Principal Balance of the Collateral Debt Securities so 

redeemed will be deposited into the Principal Collection Account and will be applied on the Payment Date following 

the Due Period in which such redemption occurs in accordance with the Priority of Payments, (ii) any accrued 

interest on the Collateral Debt Securities so redeemed will be deposited into the Interest Collection Account and will 

be applied on the Payment Date following the Due Period in which such redemption occurs in accordance with the 

Priority of Payments and (iii) the remainder of such prepayment (which would constitute premiums, if any) will be 

48

deposited into the Class A/B Reserve Account (or after the Class A/B Reserve Account is closed, the Interest 

Collection Account). 

Amounts on deposit in the Class A/B Reserve Account will be invested in Eligible Investments and applied 

in accordance with the Priority of Payments. 

Any prepayment of the Class A Notes, Class B Notes or Class C Notes in accordance with the Priority of 

Payments as a result of an optional redemption of a Collateral Debt Security, a Special Event redemption with 

respect to any Collateral Debt Security or any comparable redemption in respect of any other Collateral Debt 

Security is referred to herein as a “Redemption Prepayment.” 

Clean Up Call 

After the Class A Notes, Class B Notes and Class C Notes have been paid in full, the Income Notes may be 

redeemed in whole (a “Clean Up Call”) on any Payment Date at the direction of the Holders of 66-2/3% (by 

Aggregate Principal Amount) of the Income Notes. Upon a Clean Up Call, the Trustee will pay to the Holders of 

Income Notes any Sale Proceeds and other amounts remaining after payment of all other amounts payable prior to 

the Income Notes in accordance with the Priority of Payments as described under “—Priority of Payments— 

Application of Sale Proceeds upon Clean Up Call.” A Clean Up Call will be effected in accordance with the 

procedures set forth under “—Clean Up Call Procedures” below. A Clean Up Call may only be effected if the Sale 

Proceeds from the liquidation of the Trust Estate on or prior to the related Payment Date, together with any other 

available amounts, would be sufficient to pay all other accrued and unpaid expenses, fees and other amounts payable 

under “—Priority of Payments— Application of Sale Proceeds upon Clean Up Call.” 

Clean Up Call Procedures 

Notice of a Clean Up Call will be given by first-class mail, postage prepaid, mailed not less than ten 

Business Days prior to the applicable Payment Date, to each Holder of Income Notes at such Holder’s address in the 

Note Register and, if and for so long as any Income Notes are listed on the Irish Stock Exchange and for so long as 

the rules of such stock exchange so require, the Trustee will arrange for a notice of the redemption and the 

associated Payment Date to be published in the Irish Stock Exchange’s Official List. Notes to be redeemed must be 

surrendered at the office of any Paying Agent in order to receive any amounts due pursuant to such redemption. 

If the Holders of Income Notes direct a Clean Up Call, the Collateral Manager shall solicit bids from each 

Qualified Bidder for the purchase of all or a portion of the Collateral Debt Securities. If at least seven Business 

Days before the related Payment Date (i) the Collateral Manager receives at least two bids applicable to each 

Collateral Debt Security and (ii) the proceeds of such sale (assuming each Collateral Debt Security is sold for the 

highest bid received), together with cash and Eligible Investments maturing on or prior to the related Payment Date 

and payments expected to be received on Hedge Agreements on or prior to the related Payment Date, will be 

sufficient to pay all of the amounts set forth under “—Priority of Payments— Application of Sale Proceeds upon 

Clean Up Call” other than amounts payable to Holders of Income Notes, then the Collateral Manager will direct the 

Trustee to sell the Collateral Debt Securities for the highest bid applicable to each Collateral Debt Security not later 

than the sixth Business Day preceding the related Payment Date for immediately available funds and deposit the 

proceeds of such sale into the Collection Accounts for distribution in manner set forth under “—Priority of 

Payments— Application of Sale Proceeds upon Clean Up Call.” Each of Sandler O’Neill & Partners, L.P., 

Greenwich Capital Markets, Inc., the Collateral Manager or any of their respective Affiliates may bid on and 

purchase all or a portion of the Collateral Debt Securities. 

If the Collateral Manager does not receive bids sufficient to satisfy the foregoing requirements, the Trustee 

shall, not later than the third Business Day prior to the related Payment Date, withdraw any notice of a Clean Up 

Call by written notice mailed to each Noteholder at such Noteholder’s address in the Note Register, at the expense 

of the Issuer, by overnight courier guaranteeing next day delivery. 

49

Optional Notes Redemption 

The Notes may not be optionally redeemed prior to the Payment Date occurring in December 2009 except 

as described below. Subject to the conditions described below, the Notes of each Class may be redeemed in whole 

but not in part on the Payment Date occurring in December 2009 or any Payment Date thereafter from Sale 

Proceeds, any amounts paid to the Issuer in connection with any termination of the Hedge Agreements in respect of 

such redemption and any other funds in the Interest Collection Account, Principal Collection Account, Class A/B 

Reserve Account, Expense Reserve Account, and Semiannual Receipts Account. 

At the written direction of the Holders of 66-2/3% in Aggregate Principal Amount of the Income Notes 

(which direction must be received by the Issuer and the Trustee not less than fifteen (15) Business Days prior to the 

proposed redemption date), the Collateral Debt Securities will be sold in their entirety, the Hedge Agreements will 

be terminated, and any net funds remaining in the Interest Collection Account, Principal Collection Account, Class 

A/B Reserve Account, Expense Reserve Account and Semiannual Receipts Account after payment of all expenses 

of sale, any other amounts payable by the Co-Issuers to the Collateral Manager or the Trustee or in respect of other 

fees and expenses, and any amount due from the Issuer to each Hedge Counterparty on termination of the Hedge 

Agreements, will be applied to redeem all of the Notes. The Optional Note Redemption Price of any Class A Notes, 

Class B Notes and Class C Notes so redeemed will be 100% of the Aggregate Principal Amount to be redeemed 

(which in the case of the Class C-1 Notes and the Class C-2 Notes, includes any unpaid Class C-1 Note Deferred 

Interest and Class C-2 Note Deferred Interest, respectively), plus accrued and unpaid interest thereon to (but 

excluding) the date of redemption, plus in the case of the Class C-2 Notes only, the excess, if any, of (x) the present 

value of the scheduled payments of interest and principal which are remaining with respect to the Class C-2 Notes as 

of the Payment Date on which such Optional Notes Redemption will be made, based on the assumption that no 

principal is paid on the Class C-2 Notes until the Class C-2 Notes are paid in full on the Payment Date in December 

2015, and using a discount factor equal to the USD-ISDA-Swap Rate with a maturity as close to but not exceeding 

the period of time between the Payment Date of the redemption and the Payment Date occurring in December 2015 

(calculated as of the 45th day preceding the Payment Date of the redemption), plus 1.45% over (y) 100% of the 

Aggregate Principal Amount of the Class C-2 Notes. The Optional Note Redemption Price of each Income Note so 

redeemed will be its pro rata share (equal to a fraction, the numerator of which is the Aggregate Principal Amount of 

such Income Note and the denominator of which is the Aggregate Principal Amount of all Income Notes) of the 

Excess Sale Proceeds. If there are no Excess Sale Proceeds, such Income Notes will nonetheless be canceled for all 

purposes on the redemption date and deemed to have been redeemed in full. 

No Notes may be redeemed in an Optional Notes Redemption unless either (1) not later than seven (7) 

Business Days before the scheduled redemption date, the Collateral Manager furnishes to the Trustee and the Rating 

Agencies evidence, in form satisfactory to the Trustee and the Rating Agencies, that the Collateral Manager on 

behalf of the Issuer has entered into a binding agreement or agreements with a financial institution or institutions 

whose long-term unsecured debt obligations (other than such obligations whose rating is based on the credit of a 

person other than such institution) have a credit rating from Moody’s of at least “A1” and from S&P of at least “A+” 

or whose short-term unsecured debt obligations have a credit rating from Moody’s of at least “P-1” and from S&P of 

at least “A-1” (or whose obligations under such agreement or agreements are fully guaranteed by an entity with such 

credit ratings) to purchase, not later than the Business Day immediately preceding the scheduled redemption date in 

immediately available funds, all of the Collateral Debt Securities at a purchase price at least equal to an amount 

sufficient, together with the Available Funds in the Interest Collection Account and the Principal Collection 

Account, and amounts available in the Class A/B Reserve Account, the Expense Reserve Account and the 

Semiannual Receipts Account and related amounts payable in respect of the Hedge Agreements, to pay all amounts 

required under the Priority of Payments to be paid other than the payments to the Income Notes, and to redeem the 

applicable principal amount of Class A Notes, Class B Notes and Class C Notes on the scheduled redemption date at 

the appropriate Optional Note Redemption Price, or (2) prior to selling any Collateral Debt Securities, the Collateral 

Manager certifies to the Trustee and the Rating Agencies that the expected Sale Proceeds from such sales, together 

with the Available Funds in the Interest Collection Account and the Principal Collection Account, and amounts 

available in the Class A/B Reserve Account, the Expense Reserve Account and the Semiannual Receipts Account 

and related amounts payable in respect of the Hedge Agreements, would equal at least the sum of (i) the Optional 

Note Redemption Price of the Outstanding Class A Notes, Class B Notes and Class C Notes to be redeemed and (ii) 

all amounts required under the Priority of Payments to be paid other than the payments to the Income Notes. 

50

An Optional Notes Redemption will constitute an additional termination event under each Hedge 

Agreement, and will result in the early termination of each Hedge Agreement with the Issuer as the sole Affected 

Party (as defined in the Hedge Agreement) thereunder. Upon such a termination, the Issuer may be obligated to 

make a termination payment to the Hedge Counterparty, which payment will be made in accordance with the 

Priority of Payments. 

Mandatory Auction Call 

The Notes will be redeemed in full on the Payment Date in December 2015 (if not previously redeemed), 

subject to the satisfaction of certain conditions described below. In accordance with the procedures set forth in the 

Indenture (the “Auction Procedures”), the Collateral Manager will, at the expense of the Issuer, conduct an auction 

(an “Auction”) of the Collateral Debt Securities not later than 10 Business Days prior to (1) the Payment Date 

occurring in December 2015 and (2) if the Notes are not redeemed in full on the Payment Date occurring in 

December 2015, each Payment Date thereafter which occurs on or closest to any six month anniversary of 

December 1, 2015 until a successful Auction has been conducted (each such date, an “Auction Date”) or until the 

Stated Maturity Date occurs. Any of the Collateral Manager, the Income Noteholders, the Trustee or their 

respective Affiliates may, but will not be required to, bid at the Auction. The Collateral Manager will sell and 

transfer all of the Collateral Debt Securities (which may be divided into up to eight Subpools) to the highest bidder 

therefor (or the highest bidder for each Subpool) at the Auction provided that: 

(i) 

the Auction has been conducted in accordance with the Auction Procedures; 

(ii) the Collateral Manager has received bids (which bids may be based upon a fixed spread above or 

below a generally recognized price index) for the Collateral Debt Securities (or for each of the related Subpools) 

from at least two Listed Bidders (including the winning bidder) for (x) the purchase of all the Collateral Debt 

Securities or (y) the purchase of each Subpool; 

(iii) the Collateral Manager has determined that the higher of (A) the highest price bid by any Listed 

Bidder for all the Collateral Debt Securities or (B) the sum of the highest prices bid by one or more Listed Bidders 

for each Subpool would result in the sale of all of the Collateral Debt Securities (or all the related Subpools) for a 

purchase price (paid in cash) which together with the Available Funds in the Interest Collection Account and the 

Principal Collection Account, and amounts available in the Class A/B Reserve Account, the Semiannual Receipts 

Account and the Expense Reserve Account and any related amounts payable in respect of the Hedge Agreements, 

would equal at least the sum of (a) the Mandatory Auction Call Amount and (b) all other amounts required to be 

paid pursuant to clauses (a)(i), (a)(ii), (a)(iii), (a)(x) and (a)(xi) of the Priority of Payments; and 

(iv) the highest bidder(s) enter(s) into a written agreement with the Issuer (which the Issuer will 

execute if the conditions set forth in Subclauses (i) through (iii) above and in the Indenture are satisfied which 

execution will constitute certification by the Issuer that such conditions have been satisfied) that obligates the 

highest bidder (or the highest bidder for each Subpool) to purchase all of the Collateral Debt Securities (or the 

relevant Subpool) and enables the Issuer to pay all amounts payable under the Indenture in connection with the 

Mandatory Auction Call (including any termination payments due in respect of the Hedge Agreements) and provides 

for payment in full (in cash) of the purchase price to the Trustee on or prior to the sixth Business Day following the 

relevant Auction Date. 

If all of the conditions set forth in clauses (i) through (iv) above have been met, the Collateral Manager will 

direct the Trustee to sell and the Trustee will transfer the Collateral Debt Securities (or the related Subpool) to such 

highest bidder (or the highest bidder for each Subpool, as the case may be) upon payment of the purchase price. 

Notwithstanding the foregoing, but subject to the satisfaction of the conditions set forth in clauses (i) through 

(iv) above, the Collateral Manager, although it may not have been the highest bidder, will have the option to 

purchase, directly or indirectly through an Affiliate thereof, the Collateral Debt Securities (or any Subpool) for a 

purchase price not less than the highest bid therefor. The Trustee will deposit the purchase price for the Collateral 

Debt Securities in the applicable Collection Accounts and pay accrued and unpaid expenses and redeem the Notes in 

accordance with the Priority of Payments on the Payment Date immediately following the relevant Auction Date 

(such redemption, the “Mandatory Auction Call”). 

51

If any of the foregoing conditions is not met with respect to any Auction or if the highest bidder (or the 

highest bidder for any Subpool, as the case may be) fails to pay the purchase price before the sixth Business Day 

following the relevant Auction Date, (i) the Mandatory Auction Call will not occur on the Payment Date following 

the relevant Auction Date, (ii) the Collateral Manager will give notice to the Trustee and the Trustee will give notice 

to the Noteholders of the withdrawal of the notice of Mandatory Auction Call, (iii) subject to clause (iv) below, the 

Collateral Manager will decline to consummate such sale and will not solicit any further bids or otherwise negotiate 

any further sale of Collateral Debt Securities in relation to such Auction, (iv) the Collateral Manager will return any 

good faith deposits paid by the other highest bidders for the Subpools to such highest bidders and (v) unless the 

Notes are redeemed in full prior to the next succeeding Auction Date, the Collateral Manager will conduct another 

Auction on the next succeeding Auction Date. 

The “Mandatory Auction Call Amount” will be equal to the sum of (a) the then-outstanding principal 

amount of the Class A Notes, Class B Notes and Class C Notes (including in the case of the Class C-1 Notes and the 

Class C-2 Notes, any unpaid Class C-1 Note Deferred Interest and Class C-2 Note Deferred Interest, respectively), 

and any accrued and unpaid interest to (but excluding) the date of redemption, plus (b) an amount equal to the 

greater of (i)(A) the initial face amount of the Income Notes outstanding at such time minus (B) the aggregate 

amount of all cash payments made in respect of the Income Notes on or prior to the relevant Auction Date and 

(ii) zero; provided that (x) Holders of 100% of the aggregate outstanding principal amount of any class of the Class 

A-1 Notes, the Class A-2 Notes, the Class B Notes or the Class C Notes (with the Class C Notes voting as a single 

class for this purpose) may elect to receive less than 100% of the amount payable to such class in accordance with 

clause (a) and (y) Holders of 100% of the Income Notes may elect to receive less than 100% of the amount payable 

to the Income Notes in accordance with clause (b) and, in either such case, the Mandatory Auction Call Amount will 

be reduced accordingly for purposes of this definition. 

A Mandatory Auction Call will constitute an additional termination event under each Hedge Agreement, 

and will result in the early termination of each Hedge Agreement with the Issuer as the sole Affected Party (as 

defined in the Hedge Agreement) thereunder. Upon such a termination, the Issuer may be obligated to make a 

termination payment to the Hedge Counterparty, which payment will be made in accordance with the Priority of 

Payments. 

Notes Redemption Procedures 

Notice of any Optional Notes Redemption or Mandatory Auction Call will be given by first-class mail, 

postage prepaid, mailed not less than ten Business Days prior to the date scheduled for redemption (with respect to 

such Optional Notes Redemption or Mandatory Auction Call, the “Notes Redemption Date”), to each holder of 

Notes at such holder's address in the Note Register, to each Hedge Counterparty, to each Rating Agency and, so long 

as any Notes are listed on the Irish Stock Exchange, to the Irish Stock Exchange. 

In the event of an Optional Notes Redemption or Mandatory Auction Call, the Collateral Manager will at 

such time direct the sale or conduct an Auction of Collateral Debt Securities without regard to the limitations on 

sales set forth herein and in the Indenture; provided, however, that the Sale Proceeds therefrom, together with certain 

other amounts, if applicable, will be at least sufficient to pay certain expenses and the Optional Notes Redemption 

Prices for the Notes or the Mandatory Auction Call Amount, as applicable; and provided, further, that such Sale 

Proceeds and other amounts are used to make such a redemption. See “—Optional Notes Redemption” and “— 

Mandatory Auction Call.” 

Any such notice of an Optional Notes Redemption or Mandatory Auction Call may be withdrawn by the 

Issuer up to the fourth Business Day prior to the scheduled Notes Redemption Date by written notice to the Trustee, 

each holder of Notes at such holder's address in the Note Register, each Hedge Counterparty, the Collateral 

Manager, the Rating Agencies and, so long as any Notes are listed on the Irish Stock Exchange, to the Irish Stock 

Exchange, only if the Collateral Manager is unable to deliver the necessary sale agreement or agreements or 

certifications in form satisfactory to the Trustee or if the Auction is unsuccessful, as applicable. Notice of any such 

withdrawal will be given by the Trustee to each holder of Notes at such holder's address in the Note Register by 

overnight courier guaranteeing next-day delivery, sent not later than the third Business Day prior to the scheduled 

Notes Redemption Date. 

52

Form, Denomination and Registration 

The Class A Notes, Class B Notes and Class C Notes may be sold in the United States or to U.S. Persons 

only to Qualified Purchasers that are also either (x) Qualified Institutional Buyers that purchase such Notes for their 

own account or for the accounts of Qualified Institutional Buyers that are also Qualified Purchasers, or 

(y) institutional “accredited investors” (as defined in clause (1), (2), (3) or (7) of Rule 501(a) of Regulation D under 

the Securities Act). Except as provided herein, Class A Notes, Class B Notes and Class C Notes sold in reliance on 

Rule 144A will be represented by one or more permanent global notes in definitive, fully registered form without 

interest coupons (each, a “Rule 144A Global Note”). Investors in Class A Notes, Class B Notes and Class C Notes 

may hold their interests in the Rule 144A Global Notes directly through DTC if they are DTC participants, or 

indirectly through organizations which are DTC participants. The Rule 144A Global Notes will be deposited with 

the Trustee as custodian for DTC, and registered in the name of a nominee of DTC. Income Notes may not be held 

in the form of Global Notes. 

The Class A Notes, Class B Notes and Class C Notes sold to non-U.S. Persons in Offshore Transactions in 

reliance on Regulation S will be initially represented by one or more temporary global notes in definitive, fully 

registered form without interest coupons (the “Temporary Regulation S Global Notes”). The Temporary Regulation 

S Global Notes will be deposited with the Trustee as custodian for, and registered in the name of, a nominee of DTC 

for the respective accounts of Euroclear S.A./N.V., as the operator of the Euroclear system (“Euroclear”) and 

Clearstream Banking, société anonyme (“Clearstream” and, together with Euroclear, each, a “Clearance System”). 

Beneficial interests in Temporary Regulation S Global Notes will be subject to certain restrictions on transfer prior 

to the Exchange Date as set forth in the Indenture and as described herein under “Transfer Restrictions.” 

On or after the first Business Day following the 40th day after the later of the Closing Date and the 

commencement of the offering of the Notes (the “Exchange Date”), interests in a Temporary Regulation S Global 

Note will be exchangeable for interests in one or more permanent global notes in definitive, fully registered form 

without interest coupons (the “Regulation S Global Notes” and, together with the Rule 144A Global Notes and the 

Temporary Regulation S Global Notes, the “Global Notes”) upon certification that the beneficial interests in such 

Temporary Regulation S Global Note are owned by persons who are not U.S. Persons. On the exchange of a 

Temporary Regulation S Global Note for a Regulation S Global Note, the Regulation S Global Note will be 

deposited with the Trustee as custodian for, and registered in the name of, a nominee of DTC for the respective 

accounts of Euroclear and Clearstream. 

Investors may hold their interests in a Regulation S Global Note directly through Euroclear or Clearstream, 

if they are participants in such systems, or indirectly through organizations that are participants in such systems. 

Beneficial interests in a Regulation S Global Note may be held only through Euroclear or Clearstream and may not 

be held by a “U.S. Person” (as defined in Regulation S under the Securities Act) at any time. By acquisition of a 

beneficial interest in a Regulation S Global Note, the purchaser thereof will be deemed to represent that it is not a 

U.S. Person and that, if in the future it determines to transfer such beneficial interest, it will transfer such interest 

only to a person whom the seller reasonably believes to be a non-U.S. Person or to a person who takes delivery in 

the form of an interest in a Rule 144A Global Note. Any transfer of an interest in a Rule 144A Global Note for an 

interest in a Regulation S Global Note, or vice versa, must be accompanied by certificates of the transferor and 

transferee in the forms set forth in the Indenture. See “Transfer Restrictions.” 

The registered owner of the relevant Global Note will be the only person entitled to receive payments in 

respect of Notes represented by such Global Note, and the Co-Issuers will be discharged by payment to, or to the 

order of, the registered owner of such Global Note in respect of each amount so paid. No person other than the 

registered owner of the relevant Global Note shall have any claim against the Co-Issuers in respect of any payment 

due on that Global Note. Account holders or participants in DTC, Euroclear and Clearstream shall have no rights 

under the Indenture with respect to such Global Notes held on their behalf by the Trustee, as custodian for DTC, and 

DTC may be treated by the Co-Issuers, the Trustee and any agent of the Co-Issuers or the Trustee as the Holder of 

such Global Notes for all purposes whatsoever. Except in the limited circumstances described below, owners of 

beneficial interests in the Global Notes will not be entitled to have Notes registered in their names, will not receive 

or be entitled to receive definitive physical notes and will not be considered “Holders” of the Notes under the 

Indenture or the Notes. If DTC notifies the Trustee that it is unwilling or unable to continue as depository for the 

Global Notes or ceases to be a “clearing agency” (as defined in the Exchange Act) registered under the Exchange 

53

Act, and a successor depository is not appointed by the Co-Issuers within 90 days after receiving such notice, the 

Co-Issuers will issue or cause to be issued notes in the form of definitive physical certificates (each, a “Physical 

Note”) in exchange for the applicable Global Notes to the beneficial owners of such Global Notes in the manner set 

forth in the Indenture. In the case of a transfer or partial redemption of a Physical Note, the holder of such Physical 

Note may surrender the Physical Note and obtain a new Physical Note at the office or agency maintained by the Co- 

Issuers for this purpose in New York, New York or at the office of any transfer agent. 

Class A Notes, Class B Notes and Class C Notes sold in the United States or to U.S. Persons in transactions 

in which the purchasers are both Qualified Purchasers and institutional “accredited investors” (as defined in clause 

(1), (2), (3) or (7) of Rule 501(a) of Regulation D under the Securities Act), but not Qualified Institutional Buyers, 

will be issued only in the form of definitive physical certificates in fully registered form without coupons (each, a 

“Certificated Note”). 

The Income Notes will be issued only in the form of Certificated Notes. The Income Notes may be sold 

either (i) in the United States or to U.S. Persons in transactions in which the purchasers are Qualified Purchasers that 

are also either “accredited investors” (as defined in Rule 501(a) of Regulation D under the Securities Act) or 

Qualified Institutional Buyers that purchase such Notes for their own account or for the accounts of Qualified 

Institutional Buyers that are also Qualified Purchasers or (ii) to any non-U.S. Person in Offshore Transactions in 

reliance on Regulation S. 

Certificated Notes will be subject to certain restrictions on transfer set forth in the Indenture and described 

herein and will bear legends regarding such restrictions. Any transfer of a Class A Note, Class B Note or Class C 

Note that is in the form of a Certificated Note to a person that wishes to take its interest in the transferred Note in the 

form of a Global Note must be accompanied by certificates of the transferor and transferee in the forms set forth in 

the Indenture. Any transfer of a Class A Note, Class B Note or Class C Note that is in the form of a Certificated 

Note to a person that wishes to take its interest in the transferred Note in the form of a Certificated Note, and any 

transfer of an Income Note, must be accompanied by a certificate of the transferee in the form set forth in the 

Indenture. See “Transfer Restrictions.” In the case of a transfer or partial redemption of a Certificated Note, the 

holder of such Certificated Note may surrender the Certificated Note and obtain a new Certificated Note at the office 

or agency maintained by the Co-Issuers for this purpose in New York, New York or at the office of any transfer 

agent. No Notes will be issued in bearer form. Interests in Global Notes may not be exchanged for interests in 

Certificated Notes. 

No service charge will be made for any registration of transfer or exchange of Notes of any Class, but the 

Co-Issuers or the Issuer, as the case may be, and the Trustee may require payment of a sum sufficient to cover any 

tax or other governmental charge payable in connection therewith. 

The Class A Notes, Class B Notes and Class C Notes will be issued in minimum denominations of 

U.S.$250,000 and integral multiples of U.S.$1,000 in excess thereof. The Income Notes will be issued in minimum 

denominations of U.S.$100,000 and integral multiples of U.S.$1,000 in excess thereof. 

Forced Sale 

If it is determined that a U.S. Person that owns a beneficial interest in a Global Note was not both a 

Qualified Institutional Buyer and a Qualified Purchaser at the time it acquired that interest, the Indenture permits the 

Issuer either to compel that beneficial owner to sell its interest, or to sell the interest on behalf of the beneficial 

owner, to (x) a person that is both a Qualified Institutional Buyer and a Qualified Purchaser in a transaction meeting 

the requirements of Rule 144A or (y) a non-U.S. Person in an Offshore Transaction meeting the requirements of 

Regulation S. 

54

SECURITY FOR THE NOTES 

General 

The Notes will be secured by the Trust Estate. The Trust Estate will generally consist of all money, 

instruments and other property and rights subject to the lien of the Indenture and all proceeds thereof, including the 

Collateral Debt Securities, the Guarantees, the Eligible Investments, the Class A/B Reserve Account, the Expense 

Reserve Account, the Interest Collection Account, the Principal Collection Account, the Semiannual Receipts 

Account, any Hedge Counterparty Collateral Account and the Issuer’s rights under the Hedge Agreements and the 

Collateral Management Agreement. 

“Collateral Debt Securities” consist of (i) capital securities (the “Bank Capital Securities”) issued by 

wholly owned trust subsidiaries (each, a “Bank Capital Securities Issuer”) of bank holding companies, thrift holding 

companies or holding companies of other depository institutions (each, an “Affiliated Depository Institution”), (ii) 

subordinated notes (“Bank Subordinated Notes”) issued by banks, thrifts or other depository institutions or holding 

companies of banks, thrifts or other depository institutions (each, a “Bank Subordinated Note Issuer”), (iii) capital 

securities (the “Insurance Capital Securities” and, together with the Bank Capital Securities, the “Capital 

Securities”) issued by wholly owned trust subsidiaries (each, an “Insurance Capital Securities Issuer” and, together 

with the Bank Capital Securities Issuers, the “Capital Securities Issuers”) of an insurance holding company or an 

insurance related company (each, an “Affiliated Insurance Institution”) and (iv) a surplus note (the “Insurance 

Surplus Note”) issued by an insurance company (the “Insurance Surplus Note Issuer”), each of which (1) has been 

submitted to S&P for a credit estimate rating, (2) does not meet the definition of “Defaulted Security” or “Credit 

Risk Security” at the time of acquisition by the Issuer and (3) has been reviewed and assigned a score by Fitch as of 

the Closing Date; provided, however, that if the junior subordinated deferrable interest debt securities (the 

“Corresponding Debentures”) issued by an Affiliated Depository Institution or an Affiliated Insurance Institution, as 

applicable, are exchanged for the related Capital Securities, thereafter such Corresponding Debentures will become 

“Collateral Debt Securities” and will be treated as if they were the related Capital Securities. The Collateral Debt 

Securities will each have different coupon rates, accrual periods, call dates and prices, events permitting redemption, 

maturity dates and other terms. 

The Issuer expects to acquire U.S.$300,000,000 in aggregate Principal Balance of Collateral Debt 

Securities issued by 54 different Collateral Debt Securities Issuers, representing U.S.$259,000,000 in aggregate 

Principal Balance of Bank Capital Securities sponsored by 47 different Affiliated Depository Institutions, 

U.S.$15,000,000 in aggregate Principal Balance of Bank Subordinated Notes issued by two different Bank 

Subordinated Note Issuers, U.S.$18,000,000 in aggregate Principal Balance of Insurance Capital Securities 

sponsored by two Affiliated Insurance Institutions and U.S.$8,000,000 in aggregate Principal Balance of the 

Insurance Surplus Note issued by the Insurance Surplus Note Issuer. 

Portfolio Limitations 

The Collateral Debt Securities, when acquired by the Issuer and pledged to the Trustee, will have been 

issued by 

(a) (i) in the case of the Bank Capital Securities, a Bank Capital Securities Issuer whose parent Affiliated 

Depository Institution is a bank holding company, a thrift holding company or holding company of another 

depository institution or (ii) in the case of the Bank Subordinated Notes, a Bank Subordinated Note Issuer 

that, in the case of either clause (i) or clause (ii) herein, at the time of purchase of the related Collateral 

Debt Securities by the Issuer, met the following criteria: (1) total assets of at least U.S.$50 million; (2) 

operating (or whose subsidiary or predecessor institution has been operating) for at least 5 years; and (3) 

following the issuance of such Collateral Debt Securities, a ratio of Tier 1 Capital to risk weighted assets of 

at least 10%; 

(b) in the case of Insurance Capital Securities, the Insurance Capital Securities Issuer whose parent 

Affiliated Insurance Institution is (i) an insurance holding company for one or more stock life and health 

insurance companies or property and casualty insurance companies or (ii) an insurance brokerage company 

or a holding company for one or more insurance brokerage companies that, in the case of either clause (i) 

55

or clause (ii) above, at the time of purchase of such Insurance Capital Securities by the Issuer, met the 

following criteria: (1) such Affiliated Insurance Institution has a net worth, determined on a GAAP basis, 

in excess of U.S.$30,000,000 as of the most recent fiscal period for which reports are available; (2) in the 

case of clause (i) above only, the primary insurance company subsidiary of such Affiliated Insurance 

Institution has an A.M. Best Financial strength rating of at least “B+” if it is rated by A.M. Best; (3) such 

Affiliated Insurance Institution either (x) has a public financial strength rating of at least “BB” or “Bbpi” 

from S&P or (y) has been reviewed by S&P and assigned a credit estimate by S&P and, as of the Closing 

Date, the inclusion of such Insurance Capital Securities in the Trust Estate will not have an adverse effect 

upon any of the ratings of the Class A Notes, Class B Notes and Class C Notes; and (4) such Affiliated 

Insurance Institution either (x) has a public financial strength rating from Fitch that is at least investment 

grade or (y) has been reviewed by Fitch and, as of the Closing Date, the inclusion of such Insurance Capital 

Securities in the Issuer’s assets will not have an adverse effect upon any of the ratings of the Class A Notes, 

Class B Notes and Class C Notes; and 

(c) in the case of the Insurance Surplus Note, an Insurance Surplus Note Issuer that is a property and 

casualty insurance company that is a mutual insurance company and that, at the time of purchase of such 

Insurance Surplus Note by the Issuer, met the following criteria: (i) such Insurance Surplus Note Issuer has 

statutory policyholders’ surplus, determined in accordance with SAP, in excess of U.S.$30,000,000 as of 

the most recent fiscal period for which reports are available; (ii) such Insurance Surplus Note Issuer has an 

A.M. Best financial strength rating of at least B++, if it is rated by A.M. Best; (iii) such Insurance Surplus 

Note Issuer either (x) has a public financial strength rating of at least BB or BBpi from S&P or (y) has been 

reviewed by S&P and assigned a credit estimate by S&P, and, as of the Closing Date, the inclusion of the 

Insurance Surplus Note in the Trust Estate will not have an adverse effect upon any of the ratings of the 

Class A Notes, Class B Notes and Class C Notes; and (iv) such Insurance Surplus Note Issuer either (x) has 

a public financial strength rating from Fitch that is at least investment grade or (y) has been reviewed by 

Fitch and, as of the Closing Date, the inclusion of the Insurance Surplus Note in the Trust Estate will not 

have an adverse effect upon the rating of the Class A Notes, Class B Notes and Class C Notes. 

Notwithstanding the foregoing, one or more Collateral Debt Securities Issuers, Affiliated Depository 

Institutions or Affiliated Insurance Institutions may not satisfy the aforementioned criteria to the extent that 

Moody’s, Fitch and S&P confirm that any exceptions to the criteria will not adversely affect the ratings assigned to 

the Class A Notes, Class B Notes and Class C Notes on the Closing Date. 

As used herein, the classification of issuing insurance groups as “property and casualty” or “life and health” 

is based on the type or lines of insurance predominantly written by the insurance group that includes the applicable 

Affiliated Insurance Institution or Insurance Surplus Note Issuer. 

The Collateral Debt Securities will be denominated in U.S. dollars and in the aggregate will comply with 

the following guidelines on the Closing Date (or on the date on which they are otherwise acquired by the Issuer): (i) 

the Principal Balance of the Collateral Debt Securities issued by any one issuer (including its Affiliates) will not 

account for more than 3.4% of the total aggregate Principal Balance of the Collateral Debt Securities; (ii) the 

Collateral Debt Securities in the aggregate will have a default probability equivalent to a Moody’s weighted average 

rating of between Baa2 and Baa3; and (iii) the Bank Capital Securities and Bank Subordinated Notes will have 

satisfied diversity criteria established by Moody’s and will have achieved a total diversity score of at least 20. 

As applied to the Bank Capital Securities and Bank Subordinated Notes by Moody’s, the total diversity 

score is a single number that measures concentrations among the Bank Capital Securities and Bank Subordinated 

Notes in the Trust Estate in terms of both issuer and geographical distribution. Studies have demonstrated the 

existence of strong regional influences in the U.S. economy. Between 1980 and 1996, the bank default rates in each 

of the five Geographical Regions described herein peaked at different times, suggesting that the elevated level of 

bank defaults in each Geographical Region was a function of different underlying causes. A significant correlation 

has been identified between bank default rates and the Geographical Region in which defaulting banks are located, 

indicating that diversification of a portfolio of bank debt among Geographical Regions may reduce the default risk 

profile of such a portfolio. The total diversity score has been taken into account in structuring the portfolio of 

Collateral Debt Securities. 

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The Bank Subordinated Note Issuers and, in the case of the Bank Capital Securities, the sponsoring 

Affiliated Depository Institutions are expected to have the following distribution by Geographical Region expressed 

by reference to the Aggregate Principal Amount of the respective underlying Collateral Debt Securities: 

Geographical Distribution of Bank Capital Securities 

and Bank Subordinated Notes 

Region Aggregate Principal Amount Percentage 

1 U.S.$117,000,000 42.7% 

2 41,650,000 15.2 

3 26,500,000 9.7 

4 30,000,000 10.9 

5 58,850,000 21.5 

National — — 

Total U.S.$274,000,000 100.0% 

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The five “Geographical Regions” and the states or territories included therein are set forth in the following table and 

illustrated in the map below. A Bank Subordinated Note Issuer or sponsoring Affiliated Depository Institution will 

be considered to have the regional classification of “National” if it conducts a significant portion of its business or 

operations in more than one Geographic Region, Puerto Rico and/or in a United States territory. 

Region 1 Region 2 Region 3 Region 4 Region 5 

Connecticut Alabama Arizona Arkansas Alaska 

Delaware Illinois Colorado Louisiana California 

Florida Indiana Idaho New Mexico Hawaii 

Georgia Kentucky Iowa Oklahoma Oregon 

Maine Michigan Kansas Texas Washington 

Maryland Mississippi Minnesota 

Massachusetts Ohio Missouri 

New Hampshire Tennessee Montana 

New Jersey Wisconsin Nebraska 

New York 

Nevada 

North Carolina 

North Dakota 

Pennsylvania 

South Dakota 

Rhode Island 

Utah 

South Carolina 

Wyoming 

Vermont 

Virginia 

Washington, D.C. 

West Virginia 

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Description of the Bank Capital Securities 

The Issuer expects to acquire U.S.$259,000,000 in aggregate Principal Balance of Bank Capital Securities 

issued by wholly owned trust subsidiaries of 47 different Affiliated Depository Institutions. The amount of Bank 

Capital Securities (by Principal Balance) issued by any single Bank Capital Securities Issuer ranges from 

U.S.$500,000 to U.S.$10,000,000 with a mean and median amount equal to approximately U.S.$5,285,714 and 

U.S.$5,000,000, respectively. 

Terms of the Bank Capital Securities 

The following is a summary of the material terms and provisions generally applicable to the Bank Capital 

Securities and does not purport to be complete. Accordingly, this summary is subject to and qualified in its entirety 

by reference to the actual terms of the Declarations governing the respective Bank Capital Securities. Bank Capital 

Securities representing approximately 9.1% of the aggregate Principal Balance of Collateral Debt Securities 

expected to be purchased by the Issuer were purchased by the Warehouse Provider in secondary market or similar 

transactions, while Bank Capital Securities representing approximately 13.8% of the aggregate Principal Balance of 

Collateral Debt Securities expected to be purchased by the Issuer were purchased by the Warehouse Provider in 

connection with primary transactions in which neither the Initial Purchasers nor the Placement Agents acted as the 

lead distribution participant. The terms of such Bank Capital Securities and governing documentation may differ 

from the terms summarized below. See “Risk Factors— Secondary Market and Other Collateral Debt Securities 

May Have Different Terms.” As used in this section, all references to Capital Securities shall mean Bank Capital 

Securities only, and all references to Capital Securities Issuer or Issuers shall mean Bank Capital Securities Issuer or 

Issuers only. 

The Capital Securities of each Capital Securities Issuer have been or will be issued pursuant to the terms of 

its Declaration. Each Capital Securities Issuer is or will be organized as a statutory trust. The parent Affiliated 

Depository Institution of each Capital Securities Issuer owns or will own all of the beneficial interests represented 

by Common Securities of such Capital Securities Issuer. The Common Securities and Capital Securities of a Capital 

Securities Issuer are collectively referred to herein as the “Capital Securities Issuer Securities”. The Issuer may own 

less than 100% of the Principal Balance of the Capital Securities of any individual Capital Securities Issuer and 

therefore may not be able to control any matters as to which holders thereof are entitled to vote, give their consent or 

take action. 

Each Capital Securities Issuer has used or will use the proceeds from its sale of its Capital Securities Issuer 

Securities to purchase Corresponding Debentures issued by its parent Affiliated Depository Institution. Each Capital 

Securities Issuer’s only source of cash to make distributions on its Capital Securities will be payments it receives 

from its parent Affiliated Depository Institution on its Corresponding Debentures. Payments on the Capital 

Securities issued by each Capital Securities Issuer are guaranteed to the extent described herein by its parent 

Affiliated Depository Institution. See “—Terms of the Guarantees.” 

The Capital Securities have been or will be issued in definitive and/or global form and are or will be 

denominated in a liquidation amount that is equal to the principal amount of the Corresponding Debentures less the 

liquidation amount of the Common Securities, and such principal amount is referred to herein as the “Principal 

Balance” of the Capital Securities. 

For certain specific variable terms of the Bank Capital Securities, see “—Portfolio Statistics— Statistics 

with respect to the Bank Capital Securities.” 

Distributions 

Distributions on the Capital Securities are payable quarterly or semiannually in arrears on the respective 

Capital Securities Payment Dates at the Applicable Capital Securities Rate, which may be a floating rate, a fixed rate 

or a combination of fixed and floating rates. Floating Rate Capital Securities will generally accrue distributions at 

LIBOR, reset quarterly or semiannually, plus a specified spread, each as set forth in the applicable Declaration. 

Fixed Rate Capital Securities will accrue distributions at a specified fixed rate coupon set forth in the applicable 

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Declaration. Fixed/Floating Capital Securities initially will accrue distributions at a specified fixed rate coupon 

during the Fixed Rate Period and thereafter at a floating rate, in each case as set forth in the applicable Declaration. 

The distribution rate applicable to the Capital Securities will not be higher than the maximum rate then permitted by 

New York law. Fifty percent of all interest payments received during each Due Period with respect to any Capital 

Securities whose distributions are payable semiannually (including all related receipts of accrued interest, as well as 

all payments (other than principal or premiums) received pursuant to consents or similar solicitations) will be 

deposited into the Semiannual Receipts Account rather than the Interest Collection Account. All amounts credited 

to the Semiannual Receipts Account in a given Due Period will be withdrawn therefrom, and deposited into the 

Interest Collection Account, on the first Business Day of the immediately following Due Period. Distributions on 

the Capital Securities that are in arrears for more than one accrual period will be compounded at the Applicable 

Capital Securities Rate. Distributions on the Capital Securities will be payable only to the extent that payments are 

made in respect of the related Corresponding Debentures and to the extent the related Capital Securities Issuer has 

funds available therefor. 

Distributions payable for any period with respect to the Floating Rate Capital Securities and, following the 

Fixed Rate Period, the Fixed/Floating Rate Capital Securities will be computed on the basis of the actual number of 

days in the related accrual period and a 360-day year. Distributions payable for any period with respect to the Fixed 

Rate Capital Securities, and, during the Fixed Rate Period, the Fixed/Floating Rate Capital Securities will be 

computed on the basis of a 360-day year consisting of twelve 30-day months. 

As long as (i) in the case of U.S.$146,670,000 aggregate Principal Balance of Capital Securities, no event 

of default under its Corresponding Debentures has occurred and is continuing or (ii) in the case of U.S.$112,330,000 

aggregate Principal Balance of Capital Securities, certain events of default have not occurred and are continuing, 

including the related Affiliated Depository Institution not being subject to bankruptcy, insolvency or similar 

proceedings, such Affiliated Depository Institution will have the right to defer payments of interest on its 

Corresponding Debentures by commencing an Extension Period at any time, and from time to time, for up to five 

consecutive annual periods or equivalent semiannual or quarterly periods. No Extension Period will end on a date 

other than a Capital Securities Payment Date with respect to the related Capital Securities and Extension Periods 

generally may not extend beyond the maturity date, optional redemption date or special redemption date of the 

related Corresponding Debentures. During any Extension Period, Deferred Interest will accrue at the Applicable 

Capital Securities Rate to the extent permitted by law. At the end of any Extension Period, such Affiliated 

Depository Institution will be required to pay to the applicable Capital Securities Issuer, and such Capital Securities 

Issuer will be required to pay to the Issuer, all interest then accrued and unpaid on the Corresponding Debentures 

(including Deferred Interest). 

Prior to the termination of any Extension Period, an Affiliated Depository Institution may further extend 

such Extension Period; provided, however, that such Extension Period, together with all such previous and further 

consecutive extensions thereof, may not exceed five consecutive annual periods or equivalent semiannual or 

quarterly periods, may not end on a date other than a Capital Securities Payment Date with respect to the related 

Capital Securities and generally may not extend beyond the maturity date, optional redemption date or special 

redemption date of the related Corresponding Debentures. Upon the termination of any Extension Period and upon 

the payment of all accrued and unpaid interest (including Deferred Interest), an Affiliated Depository Institution 

may commence a new Extension Period, subject to the foregoing requirements. 

During any Extension Period, an Affiliated Depository Institution may not, except in certain limited 

circumstances, (i) declare or pay any dividends or distributions on, or redeem, purchase, acquire, or make a 

liquidation payment with respect to, any of its capital stock or (ii) make any payment of principal of or interest or 

premium, if any, on or repay, repurchase or redeem any of its debt securities that rank pari passu in all respects with 

or junior in interest to the related Corresponding Debentures. 

During an Extension Period, the Capital Securities Issuer holding the related Corresponding Debentures 

will similarly defer distributions on its Capital Securities. If distributions on any Capital Securities are deferred as a 

result of an Extension Period, the distributions due will be payable on the date that the related Extension Period 

terminates. 

60

Redemption and Prepayments 

Each Capital Securities Issuer will redeem its Capital Securities when the Corresponding Debentures are 

paid at maturity or upon earlier redemption of such Corresponding Debentures. See “—Terms of the Corresponding 

Debentures— Maturity; Redemption.” 

The Corresponding Debentures may be redeemed by the issuing Affiliated Depository Institution, in whole 

or in part, at the Optional Redemption Price, on any Capital Securities Payment Date with respect to the related 

Capital Securities on or after the date specified in the related Affiliated Depository Institution Indenture. In 

addition, the Corresponding Debentures may be redeemed by the issuing Affiliated Depository Institution at the 

Special Redemption Price, in whole but not in part, at any time, upon the occurrence and continuation of a Tax 

Event, an Investment Company Event or a Capital Treatment Event (each, with respect to the Capital Securities, a 

“Bank Capital Securities Special Event”), within 90 days following the occurrence of the applicable Bank Capital 

Securities Special Event (the “Special Redemption Date”) upon not less than 30 nor more than 60 days’ notice. In all 

cases, the right of an Affiliated Depository Institution to redeem its Corresponding Debentures is subject to receipt 

of prior approval from the Applicable Regulator, if then required under applicable capital guidelines or policies of 

the Applicable Regulator. 

Upon the maturity or redemption, in whole or in part, of the Corresponding Debentures of any Affiliated 

Depository Institution (other than following the distribution of such Corresponding Debentures to holders of the 

related Capital Securities), the proceeds paid upon such maturity or redemption to the related Capital Securities 

Issuer shall concurrently be applied to redeem proportionately, except as described below under “—Subordination of 

Common Securities Upon Default,” at the applicable Redemption Price its Capital Securities and Common 

Securities having an aggregate Principal Balance equal to the aggregate principal amount of the Corresponding 

Debentures so repaid. 

A Capital Securities Issuer may not redeem less than all of its outstanding Capital Securities unless all 

accrued and unpaid distributions have been paid on all such Capital Securities for all distribution periods terminating 

on or prior to the Redemption Date. 

Liquidation and Distribution Upon Dissolution 

In the event of the voluntary or involuntary Liquidation of a Capital Securities Issuer, holders of the related 

Capital Securities will be entitled to receive out of the assets of such Capital Securities Issuer legally available for 

distribution to holders of such Capital Securities, after satisfaction of liabilities to creditors of such Capital Securities 

Issuer (to the extent not satisfied by its parent Affiliated Depository Institution), a Liquidation Distribution equal to 

the liquidation amount of such Capital Securities plus accrued and unpaid distributions thereon to the date of 

payment, unless (i) such Capital Securities have been previously redeemed in full or (ii) in connection with such 

Liquidation, the related Corresponding Debentures in an aggregate principal amount equal to the aggregate 

liquidation amount of such Capital Securities Issuer Securities are distributed on a pro rata basis to holders of such 

Capital Securities Issuer Securities in exchange for such Capital Securities Issuer Securities. 

Each Affiliated Depository Institution has the right, subject to (i) the receipt by such Affiliated Depository 

Institution of prior approval from the Applicable Regulator, if then required under applicable regulatory capital 

guidelines or policies of the Applicable Regulator and (ii) in certain cases, receipt of an opinion of nationally 

recognized tax counsel that holders of the related Capital Securities will not recognize any gain or loss for U.S. 

federal income tax purposes, at any time to dissolve its subsidiary Capital Securities Issuer and, after satisfaction of 

liabilities to creditors of such Capital Securities Issuer, cause its Corresponding Debentures to be distributed to 

holders of Capital Securities Issuer Securities on a pro rata basis in accordance with the aggregate liquidation 

amount thereof. 

Each Capital Securities Issuer will dissolve on the first to occur of (i) the expiration of the term of such 

Capital Securities Issuer or 35 years after the date of original issuance of its Capital Securities, (ii) the bankruptcy of 

its parent Affiliated Depository Institution or such Capital Securities Issuer, (iii) the filing of a certificate of 

dissolution of its parent Affiliated Depository Institution or the revocation of the charter of its parent Affiliated 

Depository Institution and the expiration of 90 days thereafter without reinstatement (other than in connection with a 

61

permitted merger, consolidation or similar transaction), (iv) the distribution to holders of its Capital Securities Issuer 

Securities of the related Corresponding Debentures, (v) the entry of a decree of a judicial dissolution of such Capital 

Securities Issuer or its parent Affiliated Depository Institution or (vi) when all of its Capital Securities Issuer 

Securities have been redeemed in accordance with the terms of such Capital Securities Issuer Securities. As soon as 

practicable after the dissolution of a Capital Securities Issuer and upon completion of the winding up of such Capital 

Securities Issuer, such Capital Securities Issuer shall terminate upon the filing of a certificate of cancellation with 

the Secretary of State of the State of Delaware. 

If a Liquidation occurs as described in subclauses (i), (ii), (iii) or (v) above, the applicable Capital 

Securities Issuer shall be liquidated by distributing to the holders of its Capital Securities Issuer Securities, after 

satisfaction of liabilities to creditors of such Capital Securities Issuer, to the extent not satisfied by its parent 

Affiliated Depository Institution, the related Corresponding Debentures, unless such distribution is determined by 

the Institutional Trustee not to be practical, in which event such holders will be entitled to receive out of the assets 

of such Capital Securities Issuer legally available for distribution to holders, after satisfaction of liabilities to 

creditors of such Capital Securities Issuer to the extent not satisfied by its parent Affiliated Depository Institution, an 

amount equal to the Liquidation Distribution except as otherwise described under “—Subordination of Common 

Securities Upon Default.” The Liquidation of a Capital Securities Issuer pursuant to clause (iv) above shall occur 

only if the Institutional Trustee determines that such Liquidation is practical by distributing to the holders of the 

related Capital Securities Issuer Securities, after satisfaction of liabilities to creditors of such Capital Securities 

Issuer, the related Corresponding Debentures, and such distribution occurs. 

If, upon any such Liquidation, the Liquidation Distribution can be paid only in part because a Capital 

Securities Issuer has insufficient assets available to pay in full the aggregate Liquidation Distribution, then amounts 

payable directly by such Capital Securities Issuer shall be paid to the holders of the related Capital Securities and 

Common Securities on a pro rata basis except as otherwise described under “—Subordination of Common Securities 

Upon Default.” 

Mergers, Consolidations or Amalgamations 

Each Declaration provides that the applicable Capital Securities Issuer may not consolidate, amalgamate, 

merge with or into, or be replaced by, or convey, transfer or lease its properties and assets substantially as an entirety 

to, any corporation or other body, except as described under “—Liquidation and Distribution Upon Dissolution.” A 

Capital Securities Issuer may, with the consent of the administrators of such Capital Securities Issuer and without 

the consent of the Institutional Trustee or the holders of its Capital Securities, consolidate, amalgamate, merge with 

or into, or be replaced by, a trust organized as such under the laws of any state of the United States; provided, 

however, that (i) if such Capital Securities Issuer is not the survivor, such successor entity either (x) expressly 

assumes all of the obligations of such Capital Securities Issuer under its Capital Securities Issuer Securities or (y) 

substitutes for such Capital Securities Issuer Securities Successor Securities having substantially the same terms as 

such Capital Securities Issuer Securities, so that the Successor Securities rank the same as such Capital Securities 

Issuer Securities rank with respect to distributions and payments upon Liquidation, redemption and otherwise, (ii) a 

trustee of such successor entity possessing the same powers and duties as the Institutional Trustee is appointed by 

the parent Affiliated Depository Institution as the holder of the related Corresponding Debentures, (iii) its Capital 

Securities or any Successor Securities (excluding any securities substituted for the Issuer Common Securities) are 

listed or quoted, or any Successor Securities will be listed or quoted upon notification of issuance, on any national 

securities exchange or with another organization on which such Capital Securities are then listed or quoted, if any, 

(iv) such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease does not cause its Capital 

Securities (including any Successor Securities) to be downgraded by any nationally recognized statistical rating 

organization, (v) such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease does not 

adversely affect the rights, preferences and privileges of the holders of its Capital Securities Issuer Securities 

(including any Successor Securities) in any material respect (other than with respect to any dilution of the holders’ 

interest in such successor entity), (vi) such successor entity has a purpose substantially identical to that of such 

Capital Securities Issuer, (vii) prior to such merger, consolidation, amalgamation, replacement, conveyance, transfer 

or lease, such Capital Securities Issuer has received an opinion of a nationally recognized independent counsel 

experienced in such matters to the effect that (A) such merger, consolidation, amalgamation, replacement, 

conveyance, transfer or lease does not adversely affect the rights, preferences and privileges of the holders of its 

Capital Securities Issuer Securities (including any Successor Securities) in any material respect (other than with 

62

espect to any dilution of the holders’ interest in such successor entity), (B) following such merger, consolidation, 

amalgamation, replacement, conveyance, transfer or lease, neither such Capital Securities Issuer nor such successor 

entity will be required to register as an investment company under the Investment Company Act and (C) following 

such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease, such Capital Securities Issuer 

(or the successor entity) will continue to be classified as a grantor trust for United States federal income tax 

purposes, (viii) the new Affiliated Depository Institution guarantees the obligations of such successor entity under 

the Successor Securities to the same extent provided by the related Guarantee, Corresponding Debentures and 

Declaration and (ix) prior to such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease, 

the Institutional Trustee shall have received an officers’ certificate of the Administrators and an opinion of counsel, 

each to the effect that all conditions precedent to such transaction have been satisfied. 

Subordination of Common Securities Upon Default 

The Capital Securities of a Capital Securities Issuer will rank pari passu with, and payment thereon shall be 

made pro rata with, the related Common Securities of such Capital Securities Issuer except that, where an event of 

default in respect of the related Corresponding Debentures has occurred and is continuing, the rights of holders of 

such Common Securities to receive payment of distributions and payments upon Liquidation, redemption and 

otherwise are subordinated to the rights of the holders of such Capital Securities, with the result that no payment of 

any distribution on, or any amount payable upon the redemption of, any such Common Security, and no payment to 

the holder of any such Common Security on account of the Liquidation of such Capital Securities Issuer, shall be 

made unless payment in full in cash of all accrued and unpaid distributions on such Capital Securities for all 

distribution periods terminating on or prior thereto and all amounts payable on such Capital Securities then subject 

to redemption, in each case, shall have been made or provided for, and all funds immediately available to the 

Institutional Trustee of such Capital Securities Issuer shall first be applied to the payment in full in cash of the 

distributions and redemption amounts specified above that are then due and payable. 

Terms of the Corresponding Debentures 

The following is a summary of the material terms and provisions generally applicable to the Corresponding 

Debentures and does not purport to be complete. Accordingly, this summary is subject to and qualified by reference 

to the actual terms of the Affiliated Depository Institution Indentures of the Affiliated Depository Institutions and 

such Corresponding Debentures. The terms of the Corresponding Debentures related to Capital Securities expected 

to be purchased by the Issuer were purchased by the Warehouse Provider either in secondary market or similar 

transactions or in connection with primary transactions in which neither the Initial Purchasers nor the Placement 

Agents acted as the lead distribution participant, as well as the governing documentation, may have different terms. 

See “Risk Factors— Secondary Market and Other Collateral Debt Securities May Have Different Terms.” As used 

in this section, all references to Capital Securities shall mean Bank Capital Securities only, and all references to 

Capital Securities Issuer or Issuers shall mean Bank Capital Securities Issuer or Issuers only. 

General. Concurrently with the issuance of its Capital Securities, each Capital Securities Issuer has 

invested the proceeds thereof, together with the consideration paid by its parent Affiliated Depository Institution for 

the Common Securities, in Corresponding Debentures issued by such Affiliated Depository Institution. The 

Corresponding Debentures represent junior subordinated, unsecured debt of the related Affiliated Depository 

Institutions and have been issued pursuant to separate Affiliated Depository Institution Indentures. The 

Corresponding Debentures will be issued in definitive and/or global form. 

Subordination. Each Affiliated Depository Institution Indenture provides that the related Corresponding 

Debentures are subordinated and junior in right of payment to the prior payment in full of all present and future 

Senior Indebtedness of the applicable Affiliated Depository Institution. No payment of principal of or premium, if 

any, or interest on the Corresponding Debentures may be made (in cash, property, securities, by set-off or otherwise) 

if (i) any Senior Indebtedness of such Affiliated Depository Institution is not paid when due and any applicable 

grace period with respect to a payment default under such Senior Indebtedness has ended and such default has not 

been cured or waived or ceased to exist or (ii) the maturity of any Senior Indebtedness of such Affiliated Depository 

Institution has been accelerated because of a default and such acceleration has not been rescinded or cancelled and 

such Senior Indebtedness has not been paid in full. Upon any payment by an Affiliated Depository Institution or any 

other distribution of assets of such Affiliated Depository Institution to creditors upon any dissolution, winding-up, 

63

liquidation or reorganization, whether voluntary or involuntary, or in bankruptcy, insolvency, receivership or other 

proceedings, all amounts due on all Senior Indebtedness of such Affiliated Depository Institution must be paid in 

full before the holders of the related Corresponding Debentures are entitled to receive or retain any payment. Upon 

satisfaction of all claims of all Senior Indebtedness then outstanding, the rights of the holders of the related 

Corresponding Debentures will be subrogated to the rights of the holders of Senior Indebtedness of such Affiliated 

Depository Institution to receive payments or other distributions applicable to such Senior Indebtedness until all 

amounts owing on such Corresponding Debentures are paid in full. 

The Affiliated Depository Institution Indentures do not (i) limit the respective Affiliated Depository 

Institutions or their subsidiaries from incurring future indebtedness, liabilities and obligations, including Senior 

Indebtedness, which may consist of other debt securities issued by such Affiliated Depository Institution related to 

preferred securities of other subsidiaries of such Affiliated Depository Institution, and secured debt or (ii) afford the 

Trustee, as the holder of the Capital Securities related to the Corresponding Debentures issued thereunder, protection 

in the event of a highly leveraged or other transaction involving the applicable Affiliated Depository Institution that 

may adversely affect it. 

Under each Affiliated Depository Institution Indenture, the applicable Debenture Trustee is authorized to 

act on behalf of each holder of the related Corresponding Debentures to take such action as may be necessary or 

appropriate to effectuate, as between holders of such Corresponding Debentures and Senior Indebtedness, the 

subordination provisions contained therein. 

The right of an Affiliated Depository Institution to participate in any distribution of assets of any subsidiary 

upon such subsidiary’s liquidation or reorganization or otherwise is subject to the prior claims of creditors and 

preferred equity holders of such subsidiary, except to the extent the Affiliated Depository Institution may itself be 

recognized as a creditor of such subsidiary. Accordingly, such Affiliated Depository Institution’s obligations under 

its Corresponding Debentures will be effectively subordinated to all existing and future liabilities and preferred 

equity of such Affiliated Depository Institution’s subsidiaries, and claimants may look only to the assets of such 

Affiliated Depository Institution for payment. 

As a holding company, each Affiliated Depository Institution relies primarily on dividends from such 

subsidiaries to meet its obligations for payment of principal of and premium, if any, and interest on its outstanding 

debt obligations and corporate expenses. The principal sources of the Affiliated Depository Institution’s income are 

dividends, interest and fees from its subsidiaries. The bank subsidiaries of Affiliated Depository Institutions are 

subject to certain restrictions imposed by federal and state law, as applicable, on extensions of credit to, and certain 

other transactions with, such Affiliated Depository Institutions and certain other Affiliates and on investments in 

stock or other securities thereof. In addition, payment of dividends to an Affiliated Depository Institution by its bank 

subsidiaries is subject to ongoing review by banking regulators and is subject to various statutory and contractual 

limitations and business considerations and in certain circumstances requires approval by banking regulatory 

authorities. 

Maturity; Redemption. The Corresponding Debentures will mature and become due and payable, together 

with any accrued and unpaid interest thereon, including Deferred Interest and Additional Interest, if any, on dates 

ranging from September 15, 2028 to November 23, 2035. The Affiliated Depository Institutions may redeem its 

Corresponding Debentures from time to time prior to maturity as described in “—Terms of the Bank Capital 

Securities— Redemption and Prepayments.” 

Interest. Each Corresponding Debenture bears interest at the Applicable Capital Securities Rate. The day 

count convention applicable to the Corresponding Debentures for any period is computed in the manner 

contemplated under “—Terms of the Bank Capital Securities— Distributions.” 

Option to Extend Interest Payment Period. Each Affiliated Depository Institution has the right to defer 

payments of interest on its Corresponding Debentures as described in “—Terms of the Bank Capital Securities— 

Distributions.” 

Additional Interest. If at any time as a result of a Tax Event a Capital Securities Issuer is required to pay 

any additional taxes (including withholding taxes), duties, assessments or other governmental charges, then, in any 

64

such case, its parent Affiliated Depository Institution will pay such Additional Interest on the Corresponding 

Debentures as shall be required so that the net amounts received and retained by such Capital Securities Issuer after 

paying all such taxes, duties, assessments or other governmental charges will equal the amounts such Capital 

Securities Issuer would have received and retained had no such taxes, duties, assessments or other governmental 

charges been imposed. 

Certain Covenants. If (i) there has occurred and is continuing an event of default (as described below) 

under an Affiliated Depository Institution Indenture, (ii) an Affiliated Depository Institution is in default with 

respect to its payment of any obligations under its Guarantee, or (iii) an Affiliated Depository Institution has given 

notice of its election to defer payments of interest on its Corresponding Debentures by extending the interest 

payment period as provided in the Affiliated Depository Institution Indenture relating to such Corresponding 

Debentures, or any such Extension Period is continuing, then, except in certain limited circumstances, (a) such 

Affiliated Depository Institution may not declare or pay any dividends or distributions on, or redeem, purchase, 

acquire or make a liquidation payment with respect to, any of its capital stock and (b) such Affiliated Depository 

Institution may not make any payment of interest or premium, if any, on or principal of, or repay, repurchase or 

redeem, any debt securities issued by such Affiliated Depository Institution that rank pari passu with or junior in 

interest to its Corresponding Debentures. 

The parent Affiliated Depository Institution of each Capital Securities Issuer will, for so long as any Capital 

Securities Issuer Securities remain outstanding, maintain 100% ownership of the Common Securities of such Capital 

Securities Issuer; provided, however, that any successor of an Affiliated Depository Institution permitted under the 

related Declaration and Affiliated Depository Institution Indenture may succeed to such Affiliated Depository 

Institution’s ownership of such Common Securities. 

Limitation on Mergers and Sales of Assets. Subject to the terms of the related Affiliated Depository 

Institution Indenture, any Affiliated Depository Institution may consolidate or merge with or into another entity, or 

sell, convey, transfer or otherwise dispose of its property as an entirety, or substantially as an entirety, to another 

entity authorized to acquire and operate the same; provided, however, that, upon any such consolidation, merger, 

sale, conveyance, transfer or other disposition, the obligations of such Affiliated Depository Institution under its 

Corresponding Debentures and the related Affiliated Depository Institution Indenture shall be expressly assumed by 

the successor entity formed by such consolidation or into which the Affiliated Depository Institution shall have been 

merged, or which shall have acquired such property. In certain cases, the successor entity is not required to be a 

U.S. entity or to pay additional sums related to any withholding or other deduction in respect of payments on its 

Corresponding Debentures or related Capital Securities. 

Events of Default, Waiver and Notice. Each Affiliated Depository Institution Indenture provides that any 

one or more of the following described events which has occurred and is continuing with respect to the 

Corresponding Debentures issued pursuant to such Affiliated Depository Institution Indenture constitutes an “event 

of default” with respect to the Corresponding Debentures: 

(i) default for 30 days in payment of any interest on such Corresponding Debentures when due (it 

being understood that an extension of any interest payment period in accordance with the terms of the 

Corresponding Debentures shall not constitute a default under this clause); 

(ii) in the case of U.S.$112,330,000 aggregate Principal Balance of Capital Securities relating to 

Corresponding Debentures, default in the payment of any interest on such Corresponding Debentures, including any 

Deferred Interest in respect thereof, following the nonpayment of any such interest for five consecutive annual 

periods or equivalent semiannual or quarterly periods; 

(iii) default in payment of principal of or premium, if any, on such Corresponding Debentures when 

due, either at maturity, upon redemption, by acceleration of maturity or otherwise; 

(iv) default by the applicable Affiliated Depository Institution in the performance of, or breach of, 

certain other of the covenants or agreements in such Affiliated Depository Institution Indenture which shall not have 

been remedied for a period of 90 days after written notice to such Affiliated Depository Institution by the applicable 

65

Debenture Trustee or to such Affiliated Depository Institution and such Debenture Trustee by the holders of at least 

25% in aggregate principal amount of such Corresponding Debentures; 

(v) certain events of bankruptcy, insolvency or reorganization of the applicable Affiliated Depository 

Institution or, in limited cases, the receivership of a major banking subsidiary of such Affiliated Depository 

Institution; or 

(vi) the Liquidation of the applicable Affiliated Depository Institution’s subsidiary Capital Securities 

Issuer, except in connection with the distribution of such Corresponding Debentures to the holders of Capital 

Securities Issuer Securities in liquidation of such Capital Securities Issuer, the redemption of all of such Capital 

Securities Issuer Securities, or mergers, consolidations or amalgamations, each if and as permitted by the 

Declaration. 

If (i) in the case of U.S.$146,670,000 aggregate Principal Balance of Capital Securities relating to 

Corresponding Debentures, an event of default shall have occurred and be continuing or (ii) in the case of 

U.S.$112,330,000 aggregate Principal Balance of Capital Securities relating to Corresponding Debentures, an event 

of default referenced in clause (ii), (v) or, in limited cases, (vi) above shall have occurred and be continuing, either 

the applicable Debenture Trustee or the holders of not less than 25% in aggregate principal amount of the related 

Corresponding Debentures then outstanding may declare the principal of and unpaid accrued interest on all such 

Corresponding Debentures to be due and payable immediately, but upon certain conditions such declarations may be 

annulled and past defaults may be waived (except defaults in payment of principal of or premium, if any, or interest 

on the Corresponding Debentures, which must be cured or paid in full) by the holders of a majority in aggregate 

principal amount of such Corresponding Debentures then outstanding. In the case of certain of the Corresponding 

Debentures, if an event of default referenced in clause (v) or, in more limited cases, clause (vi) above shall have 

occurred, the principal of and premium, if any, and accrued interest on all such Corresponding Debentures will 

automatically become immediately due and payable without further action. 

The right of any holder of any Corresponding Debenture to receive payment of the principal of and 

premium, if any, and interest on such Corresponding Debenture when due, or to institute suit for the enforcement of 

any such payment, shall not be impaired or affected without the consent of such holder. 

An event of default under an Affiliated Depository Institution Indenture also constitutes a Declaration 

Event of Default. Upon the occurrence of any Declaration Event of Default resulting from an event of default of 

Corresponding Debentures that permits acceleration of the maturity thereof, the Institutional Trustee, so long as it is 

the sole holder of the Corresponding Debentures, or the holders of a majority in liquidation amount of the related 

Capital Securities will have the right to declare the principal of and premium, if any, and interest on such 

Corresponding Debentures to be immediately due and payable. A waiver of any event of default under an Affiliated 

Depository Institution Indenture will constitute a waiver of the corresponding Declaration Event of Default. 

Terms of the Guarantees 

The following is a summary of the material terms and provisions generally applicable to the Guarantees 

and does not purport to be complete. Accordingly, this summary is subject to and qualified by reference to the 

actual terms of the Guarantee of each Affiliated Depository Institution. As used in this section, all references to 

Capital Securities shall mean Bank Capital Securities only, and all references to Capital Securities Issuer or Issuers 

shall mean Bank Capital Securities Issuer or Issuers only 

Each Affiliated Depository Institution has executed a Guarantee. Each Guarantee is a guarantee by the 

applicable Affiliated Depository Institution of the payment of certain amounts to holders of the Capital Securities 

issued by its subsidiary Capital Securities Issuer; provided, however, that such Guarantees will not apply to any 

payment of distributions or other amounts due on the Capital Securities except to the extent the related Capital 

Securities Issuer has funds legally available therefor, which funds will not be so available except to the extent such 

Capital Securities Issuer’s parent Affiliated Depository Institution has made corresponding payments on its 

Corresponding Debentures purchased by such Capital Securities Issuer. 

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Each Affiliated Depository Institution has irrevocably and unconditionally agreed, to the limited extent set 

forth in its Guarantee, to pay in full, to holders of the Capital Securities issued by its subsidiary Capital Securities 

Issuer (except to the extent paid by such Capital Securities Issuer), as and when due, regardless of any defense 

(except the defense of payment by such Capital Securities Issuer), right of set-off or counterclaim which such 

Capital Securities Issuer may have or assert: (i) any accrued and unpaid distributions which are required to be paid 

on such Capital Securities, to the extent such Capital Securities Issuer shall have funds legally available therefor; (ii) 

the applicable redemption price of any Capital Securities called for redemption or subject to mandatory redemption 

by such Capital Securities Issuer, in each case in accordance with the terms of such Capital Securities, to the extent 

such Capital Securities Issuer has funds legally available therefor; and (iii) upon Liquidation of such Capital 

Securities Issuer (other than in connection with the distribution of the Corresponding Debentures to holders of such 

Capital Securities in exchange therefor), the lesser of (a) the aggregate of the liquidation amount and all accrued and 

unpaid distributions on such Capital Securities to the date of payment, to the extent such Capital Securities Issuer 

has funds legally available therefor, and (b) the amount of assets of such Capital Securities Issuer remaining legally 

available for distribution to holders of its Capital Securities in Liquidation of such Capital Securities Issuer after 

satisfaction of liabilities to creditors of such Capital Securities Issuer as required by applicable law. An Affiliated 

Depository Institution’s obligation to make a payment under its Guarantee may be satisfied by direct payment of the 

required amounts by such Affiliated Depository Institution to the holders of the related Capital Securities or by 

causing such Capital Securities Issuer to pay such amounts to such holders. 

Because each Guarantee is a guarantee of payment and not of collection, if the guarantee trustee fails to 

enforce the applicable Guarantee, holders of the related Capital Securities may proceed directly against the 

applicable Affiliated Depository Institution, rather than having to proceed against the related Capital Securities 

Issuer before attempting to collect from such Affiliated Depository Institution under its Guarantee, and such 

Affiliated Depository Institution has waived any right or remedy to require that any action be brought against such 

Capital Securities Issuer or any other person or entity before proceeding against such Affiliated Depository 

Institution. 

Each Guarantee has been deposited with the same trust company as the Institutional Trustee, as guarantee 

trustee to be held for the benefit of the holders of the related Capital Securities. Except as otherwise noted herein, 

the guarantee trustee has the right to enforce its Guarantee on behalf of holders of the related Capital Securities. 

Each Affiliated Depository Institution’s obligations under its Guarantee are subordinate and junior in right 

of payment to all present and future Senior Indebtedness of such Affiliated Depository Institution and are also 

effectively subordinated to claims of creditors and preferred equity holders of such Affiliated Depository 

Institution’s subsidiaries, and claimants should look only to the assets of such Affiliated Depository Institution for 

payments thereunder. Also, as a holding company, each Affiliated Depository Institution relies primarily on 

dividends, interest and fees from its subsidiaries to meet its obligations and corporate expenses, payment of which is 

subject to statutory, contractual and regulatory limitations and business considerations. See “Risk Factors— Nature 

of the Bank Capital Securities and Corresponding Debentures.” 

Effect of Obligations Under the Bank Capital Securities, the Corresponding Debentures and the 

Guarantees 

As long as payments of interest and other amounts are made when due on the Corresponding Debentures of 

an Affiliated Depository Institution, such payments will be sufficient to cover distributions and other amounts due 

on the related Bank Capital Securities because of the following factors: (i) the aggregate principal amount of such 

Corresponding Debentures is equal to the aggregate liquidation amount of the related Bank Capital Securities Issuer 

Securities; (ii) the interest rate (or manner of calculating such rate) and payment dates on the Corresponding 

Debentures correspond to the distribution rate (or manner of calculating such rate) and payment dates for such Bank 

Capital Securities; and (iii) such Affiliated Depository Institution is obligated to pay all, and its subsidiary Bank 

Capital Securities Issuer will not be obligated to pay directly or indirectly any, costs, expenses, debts and other 

obligations of such Bank Capital Securities Issuer (other than payments due on its Bank Capital Securities Issuer 

Securities). 

The Guarantee of an Affiliated Depository Institution and such Affiliated Depository Institution’s 

obligations under its Corresponding Debentures, the related Declaration and the related Affiliated Depository 

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Institution Indenture, including its obligations to pay costs, expenses, debts and other obligations of its subsidiary 

Bank Capital Securities Issuer (other than with respect to the related Capital Securities Issuer Securities), 

collectively provide a full and unconditional guarantee on a subordinated basis by such Affiliated Depository 

Institution of amounts when due on such Bank Capital Securities. However, if an Affiliated Depository Institution 

does not make interest or other payments on its Corresponding Debentures, it is expected that its subsidiary Bank 

Capital Securities Issuer will not have sufficient funds to pay the related amounts on its Bank Capital Securities. A 

Guarantee itself will not apply to any payment due on the related Bank Capital Securities except to the extent that 

the related Bank Capital Securities Issuer has funds legally available for such payment. Each Guarantee covers the 

payment of distributions and other payments on the related Bank Capital Securities only if and to the extent that the 

parent Affiliated Depository Institution has made the related payments on the Corresponding Debentures held by a 

Bank Capital Securities Issuer as its sole assets. 

If an Affiliated Depository Institution fails to make interest or other payments on its Corresponding 

Debentures when due (after giving effect to any grace period or Extension Period) or another event of default under 

the related Affiliated Depository Institution Indenture has occurred and is continuing, the Declaration provides a 

mechanism whereby a holder of the Bank Capital Securities (one of which will be the Trustee) may direct the 

Institutional Trustee, to the fullest extent permitted by law, to enforce its rights under such Corresponding 

Debentures. If the Institutional Trustee fails to enforce its rights under such Corresponding Debentures after a 

majority in liquidation amount of the Bank Capital Securities have so directed, the Trustee, as a holder of the Bank 

Capital Securities, may, to the fullest extent permitted by law, institute a legal proceeding against the applicable 

Affiliated Depository Institution to enforce the Institutional Trustee’s rights under such Corresponding Debentures 

without first instituting any legal proceedings against the Institutional Trustee or any other person or entity. 

Notwithstanding the foregoing, if a Declaration Event of Default has occurred and is continuing and such event is 

attributable to the failure of the applicable Affiliated Depository Institution to pay principal of or premium, if any, or 

interest on the related Corresponding Debentures on the respective due dates (or, in the case of redemption, on the 

Redemption Date), then a holder of the Bank Capital Securities may institute a direct cause of action against such 

Affiliated Depository Institution for payment on or after the respective due dates (or, in the case of redemption, the 

Redemption Date) specified in the Corresponding Debentures. 

The provisions described above are intended to enable the Trustee to effectively enforce the Noteholders’ 

rights if a default occurs on any Bank Capital Securities or Corresponding Debentures. For a description of the rights 

of the Collateral Manager and the Requisite Noteholders to take actions with respect to defaulted Collateral Debt 

Securities, see “—Exercise of Rights as Holder of Collateral Debt Securities; Enforcement of Defaulted Collateral 

Debt Securities”. 

Description of the Bank Subordinated Notes 

The Issuer expects to acquire up to U.S.$15,000,000 in aggregate Principal Balance of Bank Subordinated 

Notes issued by two Bank Subordinated Note Issuers (one issuing $8,000,000 and the other issuing $7,000,000). 

The following is a summary of the material terms and provisions generally applicable to the Bank 

Subordinated Notes and does not purport to be complete. Accordingly, this summary is subject to and qualified in its 

entirety by reference to the actual terms of the Bank Subordinated Note Indentures governing the respective Bank 

Subordinated Notes. Bank Subordinated Notes with an aggregate Principal Balance of $8,000,000 expected to be 

purchased by the Issuer were purchased by the Warehouse Provider in secondary market or similar transactions. 

The terms of such Bank Subordinated Notes and governing documentation may differ from the terms summarized 

below. See “Risk Factors— Secondary Market and Other Collateral Debt Securities May Have Different Terms.” 

The Bank Subordinated Notes issued by each Bank Subordinated Note Issuer have been issued pursuant to 

the terms of an Indenture (each, a “Bank Subordinated Note Indenture”). The Issuer may own less than 100% of the 

Principal Balance of the Bank Subordinated Notes of any individual Bank Subordinated Note Issuer and therefore 

may not be able to control any matters as to which holders thereof are entitled to vote, give their consent or take 

action. The Bank Subordinated Notes have been or will be issued in definitive global form. 

The Bank Subordinated Notes are solely the obligations of the Bank Subordinated Note Issuers and are 

neither obligations of, nor guaranteed by, any other entity. The Bank Subordinated Notes do not evidence deposits 

68

of the Bank Subordinated Note Issuers and are not, and will not be, insured by the FDIC or any other governmental 

agency or instrumentality thereof. 

For certain specific variable terms of the Bank Subordinated Notes, see “—Portfolio Statistics— Statistics 

with respect to the Bank Subordinated Notes.” 

Interest 

Interest is payable quarterly or semiannually in arrears on the respective payment dates set forth in the 

applicable Bank Subordinated Note Indenture (each such date, subject to the applicable Business Day convention, a 

“Bank Subordinated Note Payment Date”) at a fixed or floating rate (the “Applicable Bank Subordinated Interest 

Rate”). Interest payable on fixed rate Bank Subordinated Notes (the “Fixed Rate Bank Subordinated Notes”) will be 

payable at a per annum rate equal to the fixed rate coupon specified in the applicable Bank Subordinated Note 

Indenture, and interest payable on floating rate Bank Subordinated Notes (the “Floating Rate Bank Subordinated 

Notes”) will be payable at a per annum rate equal to LIBOR, reset quarterly or semiannually, plus the spread 

specified in the applicable Bank Subordinated Note Indenture. Interest on Fixed Rate Bank Subordinated Notes is 

computed on the basis of a 360-day year of twelve 30-day months, and interest on Floating Rate Bank Subordinated 

Notes is computed on the basis of the actual number of days in the related accrual period and a 360-day year. Fifty 

percent of all interest payments received during each Due Period with respect to any Bank Subordinated Notes 

whose distributions are payable semiannually (including all related receipts of accrued interest, as well as all 

payments (other than principal or premiums) received pursuant to consents or similar solicitations) will be deposited 

into the Semiannual Receipts Account rather than the Interest Collection Account. All amounts credited to the 

Semiannual Receipts Account in a given Due Period will be withdrawn therefrom, and deposited into the Interest 

Collection Account, on the first Business Day of the immediately following Due Period. 

Amounts payable on the Bank Subordinated Notes that are in arrears will bear interest compounded at the 

Applicable Bank Subordinated Interest Rate. 


The Bank Subordinated Notes, subject to prior approval by the Applicable Regulator if then required under 

the applicable guidelines or policies of the Applicable Regulator, will become due and payable, together with any 

accrued and unpaid interest thereon, on April 1, 2015 and August 23, 2015 respectively (each such date, a “Note 

Stated Maturity Date”). 

One of the Bank Subordinated Notes may be redeemed prior to maturity at the option of the related Bank 

Subordinated Note Issuer, (i) in whole but not in part, at the Special Redemption Price at any time upon the 

occurrence and continuation of a Bank Subordinated Note Special Event, within 90 days following the occurrence of 

such Bank Subordinated Note Special Event upon not less than 30 nor more than 60 days’ notice and (ii) in whole or 

in part, at the Optional Redemption Price on or after the initial optional redemption date specified in the Bank 

Subordinated Note Indenture. The redemption of any Bank Subordinated Notes prior to their maturity will be 

subject to any required approval of the Applicable Regulator. 

Subordination 

Each Bank Subordinated Note Indenture provides that the related Bank Subordinated Notes are 

subordinated and junior in right of payment to the prior payment in full of all present and future Senior Indebtedness 

of the applicable Bank Subordinated Note Issuer. No payment of principal of or premium, if any, or interest on the 

Bank Subordinated Notes (in cash, property, securities, by set-off or otherwise), and no redemption, exchange, 

retirement, purchase or other acquisition of any of the Bank Subordinated Notes, may be made if (i) any Senior 

Indebtedness of the issuing Bank Subordinated Note Issuer has not been paid when due and any applicable grace 

period with respect to such default has ended with such default not having been cured or waived or ceasing to exist 

or (ii) the maturity of any Senior Indebtedness of the issuing Bank Subordinated Note Issuer has been accelerated 

because of a default and such acceleration has not been rescinded or cancelled and such Senior Indebtedness has not 

been paid in full. 

69

In case of certain events of insolvency, bankruptcy, receivership, conservatorship, reorganization, 

readjustment of debt, marshalling of assets and liabilities or similar proceedings of a Bank Subordinated Note Issuer, 

all obligations of such Bank Subordinated Note Issuer to holders of its Senior Indebtedness shall be entitled to be 

paid in full before any payment, whether in cash, property or otherwise, shall be made on any account of the 

principal of or premium, if any, or interest on any of its Bank Subordinated Notes. In the event of any such 

proceeding, after payment in full of all sums owing with respect to the Senior Indebtedness of such Bank 

Subordinated Note Issuer, the holders of such Bank Subordinated Notes shall be entitled ratably to be paid from the 

remaining assets of such Bank Subordinated Note Issuer the amounts at the time due and owing on account of 

unpaid principal of and premium, if any, and interest on such Bank Subordinated Notes. 

The Bank Subordinated Note Indentures do not (i) limit the respective Bank Subordinated Note Issuers 

from incurring future indebtedness, liabilities and obligations, including secured debt and Senior Indebtedness, or 

(ii) afford the Trustee, as the holder of the Bank Subordinated Notes, protection in the event of a highly leveraged or 

other transaction involving the related Bank Subordinated Note Issuer that may adversely affect it. 

Under the terms of each Bank Subordinated Note Indenture, the Issuer has been deemed to have waived 

any right of set-off or counterclaim that the Issuer might otherwise have. 

Under each Bank Subordinated Note Indenture, the applicable Bank Subordinated Note Trustee is 

authorized on behalf of each holder of the related Bank Subordinated Notes to take such action as may be necessary 

or appropriate to effectuate, as between holders of such Bank Subordinated Notes and Senior Indebtedness, the 


The Bank Subordinated Notes are also effectively subordinated to the claims of creditors and preferred 

equity holders of the applicable Bank Subordinated Note Issuer’s subsidiaries, if any, and claimants should look 

only to the assets of such Bank Subordinated Note Issuer for payments thereunder. 

Certain Covenants 

Each Bank Subordinated Note Issuer will treat its Bank Subordinated Notes as indebtedness, and the 

interest payable in respect of such Bank Subordinated Notes (including any Additional Interest) as interest, for all 

U.S. federal income tax purposes. All payments in respect of such Bank Subordinated Notes shall be made free and 

clear of U.S. withholding tax to a holder if it has provided an Internal Revenue Service Form W-8BEN (or any 

substitute or successor form) establishing its non-U.S. status for U.S. federal income tax purposes. 

The Bank Subordinated Note Indentures will not contain provisions that afford holders of the related Bank 

Subordinated Notes protection in the event of a highly leveraged or similar transaction involving the applicable 

Bank Subordinated Note Issuer that may adversely affect it. 

Defaults; Events of Default, Waiver and Notice 

Each Bank Subordinated Note Indenture provides that certain events of bankruptcy, insolvency, 

receivership or reorganization of the applicable Bank Subordinated Note Issuer constitute an “event of default.” If an 

“event of default” occurs and is continuing with respect to related Bank Subordinated Notes, either the applicable 

Bank Subordinated Note Trustee or the holders of not less than 25% in principal amount of such Bank Subordinated 

Notes then outstanding may declare the principal of and accrued but unpaid interest on all such Bank Subordinated 

Notes to be due and payable immediately. Upon any such declaration, such principal and interest shall become 

immediately due and payable, subject to any approval required by the Applicable Regulator. Upon payment of such 

amounts, all obligations of such Bank Subordinated Note Issuer in respect of the payment of principal of and interest 

on such Bank Subordinated Notes shall terminate. 

At any time after such a declaration of acceleration has been made and before a judgment or decree for 

payment of the money due has been obtained by the applicable Bank Subordinated Note Trustee or holders of the 

related Bank Subordinated Notes as provided by the applicable Bank Subordinated Note Indenture, the holders of a 

majority in principal amount of the Bank Subordinated Notes then outstanding, by written notice to the applicable 

70

Bank Subordinated Note Issuer and such Bank Subordinated Note Trustee, may rescind and annul such declaration 

and its consequences under certain conditions. 

Each Bank Subordinated Note Indenture provides that the occurrence and continuation of any of the 

following constitutes a “default”: (a) an “event of default” as described above; (b) the applicable Bank Subordinated 

Note Issuer fails to pay the principal of its Bank Subordinated Notes on the date such amount becomes due and 

payable, whether at the related Note Stated Maturity Date or by declaration of acceleration or otherwise, and such 

failure is continued for seven days; or (c) the applicable Bank Subordinated Note Issuer fails to pay any installment 

of interest on its Bank Subordinated Notes on a Bank Subordinated Note Payment Date and such failure is continued 

for 30 days. 

Upon the occurrence of a “default” under a Bank Subordinated Note Indenture, the applicable Bank 

Subordinated Note Trustee may demand for the benefit of the holders of the related Bank Subordinated Notes, the 

entire amount then due and payable on such Bank Subordinated Notes (x) in the case of a “default” specified in 

clause (a) or (b) above, for the principal and interest, if any, and interest upon the overdue principal and, to the 

extent that payment of such interest shall be legally enforceable, upon overdue installments of interest, at the 

Applicable Bank Subordinated Interest Rate and (y) in the case of a “default” specified in clause (c) above, for the 

interest and, to the extent that payment of such interest shall be legally enforceable, upon overdue installments of 

interest, at the Applicable Bank Subordinated Interest Rate; and in each case, in addition thereto, such further 

amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, 

expenses, disbursements and advances of the applicable Bank Subordinated Note Trustee, its agents and counsel. In 

addition, if a “default” occurs and is continuing, the applicable Bank Subordinated Note Trustee may in its 

discretion proceed to protect and enforce its rights and the rights of the holders of the related Bank Subordinated 

Notes by such appropriate judicial proceedings as such Bank Subordinated Note Trustee shall deem most effectual 

to protect and enforce any such rights. 

Under the terms of each Bank Subordinated Note Indenture, no holder of Bank Subordinated Notes may 

institute any proceeding, judicial or otherwise, with respect to such Bank Subordinated Note Indenture, or for any 

remedy thereunder, unless (i) such holder has previously given written notice to such Bank Subordinated Note 

Trustee of a continuing “default”, (ii) the holders of not less than 25% in principal amount of such Bank 

Subordinated Notes then outstanding have made written request to such Bank Subordinated Note Trustee to institute 

proceedings in respect of such default and have offered to indemnify such Bank Subordinated Note Trustee against 

the costs, expenses and liabilities to be incurred in such proceedings; and (iii) such Bank Subordinated Note Trustee 

has not instituted such proceedings within 60 days of such notice, request and offer of indemnity and no direction 

inconsistent with such written request has been given to such Bank Subordinated Note Trustee during such 60-day 

period by the holders of a majority in principal amount of the Bank Subordinated Notes then outstanding. No holder 

of Bank Subordinated Notes has any right in any manner whatsoever by virtue of, or by availing of, any provision of 

the applicable Bank Subordinated Note Indenture to affect, disturb or prejudice the rights of any other holders of the 

related Bank Subordinated Notes or to enforce any right under such Bank Subordinated Note Indenture, except in 

the manner therein provided and for the equal and ratable benefit of all holders of such Bank Subordinated Notes. 

The holders of a majority in principal amount of the Bank Subordinated Notes then outstanding under a 

Bank Subordinated Note Indenture have the right to direct the time, method and place of conducting any proceeding 

for any remedy available to the applicable Bank Subordinated Note Trustee or exercising any trust or power 

conferred on such Bank Subordinated Note Trustee with respect to such Bank Subordinated Notes; provided, 

however, that (i) such direction does not conflict with any rule of law or with such Bank Subordinated Note 

Indenture, (ii) subject to the provisions of such Bank Subordinated Note Indenture, such Bank Subordinated Note 

Trustee has the right to decline to follow any such direction if, in good faith, being advised by counsel, it determines 

that the proceeding so directed might result in personal liability or would be unjustly prejudicial to the holders of 

such Bank Subordinated Notes not joining in any such direction and (iii) such Bank Subordinated Note Trustee may 

take any other action deemed proper by it that is not inconsistent with such direction. 

For a description of the rights of the Collateral Manager and the Requisite Noteholders to take actions with 

respect to defaulted Collateral Debt Securities, see “—Exercise of Rights as Holder of Collateral Debt Securities; 

Enforcement of Defaulted Collateral Debt Securities”. 

71


Each Bank Subordinated Note Indenture provides that the applicable Bank Subordinated Note Issuer may 

not consolidate with or merge into any other entity or sell, convey, transfer or otherwise dispose of its property as an 

entirety, or substantially as an entirety, to any entity, unless, among other conditions, the entity formed by such 

consolidation or into which such Bank Subordinated Note Issuer is merged or the entity which acquires the property 

of such Bank Subordinated Note Issuer as an entirety, or substantially as an entirety, shall expressly assume the due 

and punctual payment of the principal of and premium, if any, and interest on all related Bank Subordinated Notes 

and the performance of every covenant in such Bank Subordinated Note Indenture on the part of such Bank 

Subordinated Note Issuer to be performed or observed. 

Description of the Insurance Capital Securities 

The Issuer expects to acquire U.S.$18,000,000 in aggregate Principal Balance of Insurance Capital 

Securities issued by wholly owned trust subsidiaries of two Affiliated Insurance Institutions (one issuing 

$10,000,000 and the other issuing $8,000,000). 

Terms of the Insurance Capital Securities 

The following is a summary of the material terms and provisions applicable to the Insurance Capital 

Securities and does not purport to be complete. Accordingly, this summary is subject to and qualified in its entirety 

by reference to the actual terms of the Declarations governing the respective Insurance Capital Securities. Insurance 

Capital Securities with an aggregate Principal Balance of $10,000,000 expected to be purchased by the Issuer were 

purchased by the Warehouse Provider in secondary market or similar transactions. The terms of such Insurance 

Capital Securities and governing documentation may differ from the terms summarized below. See “Risk Factors— 

Secondary Market and Other Collateral Debt Securities May Have Different Terms.” As used in this section, all 

references to Capital Securities shall mean Insurance Capital Securities only, and all references to Capital Securities 

Issuer or Issuers shall mean Insurance Capital Securities Issuer or Issuers only. 

The Capital Securities of each Capital Securities Issuer have been issued pursuant to the terms of its 

Declaration. Each Capital Securities Issuer is organized as a statutory trust. The parent Affiliated Insurance 

Institution of each Capital Securities Issuer owns all of the beneficial interests represented by Common Securities of 

such Capital Securities Issuer. The Common Securities and Capital Securities of any individual Capital Securities 

Issuer are collectively referred to herein as the “Capital Securities Issuer Securities”. The Issuer may own less than 

100% of the Principal Balance of the Capital Securities of the Capital Securities Issuer and therefore may not be able 

to control any matters as to which holders thereof are entitled to vote, give their consent or take action. 

Each Capital Securities Issuer has used the proceeds from its sale of its Capital Securities Issuer Securities 

to purchase Corresponding Debentures issued by its parent Affiliated Insurance Institution. The Capital Securities 

Issuer’s only source of cash to make distributions on its Capital Securities will be payments it receives from its 

parent Affiliated Insurance Institution on its Corresponding Debentures. Payments on the Capital Securities issued 

by each Capital Securities Issuer are guaranteed to the extent described herein. See “—Terms of the Guarantees” 

and “—Terms of the Corresponding Debentures— Parent Guarantee.” 

The Capital Securities have been issued in definitive and/or global form and are denominated in a 

liquidation amount that is equal to the principal amount of the Corresponding Debentures less the liquidation 

amount of the Common Securities, and such principal amount is referred to herein as the “Principal Balance” of the 

Capital Securities. 

For certain specific variable terms of the Insurance Capital Securities, see “—Portfolio Statistics— Statistics 

with respect to the Insurance Capital Securities.” 

72

Distributions 

Distributions on the Capital Securities are payable quarterly or semiannually in arrears on the respective 

Capital Securities Payment Dates at the Applicable Capital Securities Rate, which may be a floating rate or a fixed 

rate. Floating Rate Capital Securities will accrue distributions at LIBOR, reset quarterly, plus a specified spread, 

each as set forth in the applicable Declaration. Fixed Rate Capital Securities will accrue distributions at a specified 

fixed rate coupon set forth in the applicable Declaration. The distribution rate applicable to the Capital Securities 

will not be higher than the maximum rate then permitted by New York law. Fifty percent of all interest payments 

received during each Due Period with respect to any Capital Securities whose distributions are payable semiannually 

(including all related receipts of accrued interest, as well as all payments (other than principal or premiums) received 

pursuant to consents or similar solicitations) will be deposited into the Semiannual Receipts Account rather than the 

Interest Collection Account. All amounts credited to the Semiannual Receipts Account in a given Due Period will 

be withdrawn therefrom, and deposited into the Interest Collection Account, on the first Business Day of the 

immediately following Due Period. Distributions on the Capital Securities that are in arrears for more than one 

accrual period will be compounded at the Applicable Capital Securities Rate. Distributions on the Capital Securities 

will be payable only to the extent that payments are made in respect of the related Corresponding Debentures and to 

the extent the related Capital Securities Issuer has funds available therefor. 

Distributions payable for any period with respect to the Floating Rate Capital Securities will be computed 

on the basis of the actual number of days in the related accrual period and a 360-day year. Distributions payable for 

any period with respect to the Fixed Rate Capital Securities will be computed on the basis of a 360-day year 

consisting of twelve 30-day months. 

As long as no event of default under its Corresponding Debentures has occurred and is continuing, each 

Affiliated Insurance Institution will have the right to defer payments of interest on its Corresponding Debentures by 

commencing an Extension Period at any time, and from time to time, for up to five consecutive annual periods or 

comparable interim periods. No Extension Period will end on a date other than a Capital Securities Payment Date 

with respect to the related Capital Securities and Extension Periods generally may not extend beyond the maturity 

date, optional redemption date or special redemption date of the related Corresponding Debentures. During any 

Extension Period, Deferred Interest will accrue at the Applicable Capital Securities Rate to the extent permitted by 

law. At the end of any Extension Period, such Affiliated Insurance Institution will be required to pay to the 

applicable Capital Securities Issuer, and such Capital Securities Issuer will be required to pay to the Issuer, all 

interest then accrued and unpaid on the Corresponding Debentures (including Deferred Interest). 

Prior to the termination of any Extension Period, an Affiliated Insurance Institution may further extend 

such Extension Period; provided, however, that such Extension Period, together with all such previous and further 

consecutive extensions thereof, may not exceed five consecutive annual periods or comparable interim periods, may 

not end on a date other than a Capital Securities Payment Date with respect to the related Capital Securities and 

generally may not extend beyond the maturity date, optional redemption date or special redemption date of the 

related Corresponding Debentures. Upon the termination of any Extension Period and upon the payment of all 

accrued and unpaid interest (including Deferred Interest), an Affiliated Insurance Institution may commence a new 

Extension Period, subject to the foregoing requirements. 

During any Extension Period, an Affiliated Insurance Institution may not, except in certain limited 

circumstances, (i) declare or pay any dividends or distributions on, or redeem, purchase, acquire, or make a 

liquidation payment with respect to, any of its capital stock or (ii) make any payment of principal of or interest or 

premium, if any, on or repay, repurchase or redeem any of its debt securities that rank pari passu in all respects with 

or junior in interest to the related Corresponding Debentures. 

During an Extension Period, the Capital Securities Issuer holding the related Corresponding Debentures 

will similarly defer distributions on its Capital Securities. If distributions on any Capital Securities are deferred as a 

result of an Extension Period, the distributions due will be payable on the date that the related Extension Period 

terminates. 

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Each Capital Securities Issuer will redeem its Capital Securities when the Corresponding Debentures are 

paid at maturity or upon earlier redemption of such Corresponding Debentures. See “—Terms of the Corresponding 

Debentures— Maturity; Redemption.” 

The Corresponding Debentures of one of the issuing Affiliated Insurance Institutions may be redeemed at 

its option, in whole or in part, at the Optional Redemption Price, on any Capital Securities Payment Date with 

respect to the Capital Securities on or after the date specified in the related Affiliated Insurance Institution Indenture, 

which will be five years after the original issuance date thereof. In addition, such Corresponding Debentures may be 

redeemed by the issuing Affiliated Insurance Institution at the Special Redemption Price, in whole but not in part, at 

any time, upon the occurrence and continuation of a Tax Event or an Investment Company Event (each, with respect 

to the Capital Securities, an “Insurance Capital Securities Special Event”), within 90 days following the occurrence 

of the applicable Insurance Capital Securities Special Event (the “Special Redemption Date”) upon not less than 30 

nor more than 60 days’ notice. 

Upon the maturity or redemption, in whole or in part, of the Corresponding Debentures of any Affiliated 

Insurance Institution (other than following the distribution of such Corresponding Debentures to holders of the 

related Capital Securities), the proceeds paid upon such maturity or redemption to the related Capital Securities 

Issuer shall concurrently be applied to redeem proportionately, except as described below under “—Subordination of 

Common Securities Upon Default,” at the applicable Redemption Price its Capital Securities and Common 

Securities having an aggregate Principal Balance equal to the aggregate principal amount of the Corresponding 

Debentures so repaid. 

A Capital Securities Issuer may not redeem less than all of its outstanding Capital Securities unless all 

accrued and unpaid distributions have been paid on all such Capital Securities for all distribution periods terminating 

on or prior to the Redemption Date. 

Liquidation and Distribution Upon Dissolution 

In the event of the voluntary or involuntary Liquidation of a Capital Securities Issuer, holders of the related 

Capital Securities will be entitled to receive out of the assets of such Capital Securities Issuer legally available for 

distribution to holders of such Capital Securities, after satisfaction of liabilities to creditors of such Capital Securities 

Issuer (to the extent not satisfied by its parent Affiliated Insurance Institution), a Liquidation Distribution equal to 

the liquidation amount of such Capital Securities plus accrued and unpaid distributions thereon to the date of 

payment, unless (i) such Capital Securities have been previously redeemed in full or (ii) in connection with such 

Liquidation, the related Corresponding Debentures in an aggregate principal amount equal to the aggregate 

liquidation amount of such Capital Securities Issuer Securities are distributed on a pro rata basis to holders of such 

Capital Securities Issuer Securities in exchange for such Capital Securities Issuer Securities. 

Each Affiliated Insurance Institution has the right, subject to, in certain cases, receipt of an opinion of 

nationally recognized tax counsel that holders of the related Capital Securities will not recognize any gain or loss for 

U.S. federal income tax purposes, at any time to dissolve its subsidiary Capital Securities Issuer and, after 

satisfaction of liabilities to creditors of such Capital Securities Issuer, cause its Corresponding Debentures to be 

distributed to holders of Capital Securities Issuer Securities on a pro rata basis in accordance with the aggregate 

liquidation amount thereof. 

Each Capital Securities Issuer will dissolve on the first to occur of (i) the expiration of the term of such 

Capital Securities Issuer or 35 years after the date of original issuance of its Capital Securities, (ii) the bankruptcy of 

its parent Affiliated Insurance Institution or such Capital Securities Issuer, (iii) the filing of a certificate of 

dissolution of its parent Affiliated Insurance Institution or the Affiliated Insurance Institution Parent or the 

revocation of the charter of its parent Affiliated Insurance Institution or the Affiliated Insurance Institution Parent 

and the expiration of 90 days thereafter without reinstatement (other than in connection with a permitted merger, 

consolidation or similar transaction), (iv) the distribution to holders of its Capital Securities Issuer Securities of the 

related Corresponding Debentures, (v) the entry of a decree of a judicial dissolution of such Capital Securities Issuer 

or its parent Affiliated Insurance Institution or the Affiliated Insurance Institution Parent or (vi) when all of its 

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Capital Securities Issuer Securities have been redeemed in accordance with the terms of such Capital Securities 

Issuer Securities. As soon as practicable after the dissolution of a Capital Securities Issuer and upon completion of 

the winding up of such Capital Securities Issuer, such Capital Securities Issuer shall terminate upon the filing of a 

certificate of cancellation with the Secretary of State of the State of Delaware. 

If a Liquidation occurs as described in subclauses (i), (ii), (iii) or (v) above, the applicable Capital 

Securities Issuer shall be liquidated by distributing to the holders of its Capital Securities Issuer Securities, after 

satisfaction of liabilities to creditors of such Capital Securities Issuer, to the extent not satisfied by its parent 

Affiliated Insurance Institution, the related Corresponding Debentures, unless such distribution is determined by the 

Institutional Trustee not to be practical, in which event such holders will be entitled to receive out of the assets of 

such Capital Securities Issuer legally available for distribution to holders, after satisfaction of liabilities to creditors 

of such Capital Securities Issuer to the extent not satisfied by its parent Affiliated Insurance Institution, an amount 

equal to the Liquidation Distribution except as otherwise described under “—Subordination of Common Securities 

Upon Default.” The Liquidation of a Capital Securities Issuer pursuant to clause (iv) above shall occur only if the 

Institutional Trustee determines that such Liquidation is practical by distributing to the holders of the related Capital 

Securities Issuer Securities, after satisfaction of liabilities to creditors of such Capital Securities Issuer, the related 

Corresponding Debentures, and such distribution occurs. 

If, upon any such Liquidation, the Liquidation Distribution can be paid only in part because a Capital 

Securities Issuer has insufficient assets available to pay in full the aggregate Liquidation Distribution, then amounts 

payable directly by such Capital Securities Issuer shall be paid to the holders of the related Capital Securities and 

Common Securities on a pro rata basis except as otherwise described under “—Subordination of Common Securities 

Upon Default.” 


Each Declaration provides that the applicable Capital Securities Issuer may not consolidate, amalgamate, 

merge with or into, or be replaced by, or convey, transfer or lease its properties and assets substantially as an entirety 

to, any corporation or other body, except as described under “—Liquidation and Distribution Upon Dissolution.” A 

Capital Securities Issuer may, with the consent of the administrators of such Capital Securities Issuer and without 

the consent of the Institutional Trustee or the holders of its Capital Securities, consolidate, amalgamate, merge with 

or into, or be replaced by, a trust organized as such under the laws of any state of the United States; provided, 

however, that (i) if such Capital Securities Issuer is not the survivor, such successor entity either (x) expressly 

assumes all of the obligations of such Capital Securities Issuer under its Capital Securities Issuer Securities or (y) 

substitutes for such Capital Securities Issuer Securities Successor Securities having substantially the same terms as 

such Capital Securities Issuer Securities, so that the Successor Securities rank the same as such Capital Securities 

Issuer Securities rank with respect to distributions and payments upon Liquidation, redemption and otherwise, (ii) a 

trustee of such successor entity possessing the same powers and duties as the Institutional Trustee is appointed by 

the parent Affiliated Insurance Institution as the holder of the related Corresponding Debentures, (iii) its Capital 

Securities or any Successor Securities (excluding any securities substituted for the Issuer Common Securities) are 

listed or quoted, or any Successor Securities will be listed or quoted upon notification of issuance, on any national 

securities exchange or with another organization on which such Capital Securities are then listed or quoted, if any, 

(iv) such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease does not cause its Capital 

Securities (including any Successor Securities) to be downgraded by any nationally recognized statistical rating 

organization, (v) such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease does not 

adversely affect the rights, preferences and privileges of the holders of its Capital Securities Issuer Securities 

(including any Successor Securities) in any material respect (other than with respect to any dilution of the holders’ 

interest in such successor entity), (vi) such successor entity has a purpose substantially identical to that of such 

Capital Securities Issuer, (vii) prior to such merger, consolidation, amalgamation, replacement, conveyance, transfer 

or lease, such Capital Securities Issuer has received an opinion of a nationally recognized independent counsel 

experienced in such matters to the effect that (A) such merger, consolidation, amalgamation, replacement, 

conveyance, transfer or lease does not adversely affect the rights, preferences and privileges of the holders of its 

Capital Securities Issuer Securities (including any Successor Securities) in any material respect (other than with 

respect to any dilution of the holders’ interest in such successor entity), (B) following such merger, consolidation, 

amalgamation, replacement, conveyance, transfer or lease, neither such Capital Securities Issuer nor such successor 

entity will be required to register as an investment company under the Investment Company Act and (C) following 

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such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease, such Capital Securities Issuer 

(or the successor entity) will continue to be classified as a grantor trust for United States federal income tax 

purposes, (viii) the new Affiliated Insurance Institution guarantees the obligations of such successor entity under the 

Successor Securities to the same extent provided by the Guarantee, Corresponding Debentures and Declaration and 

(ix) prior to such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease, the Institutional 

Trustee shall have received an officers’ certificate of the Administrators and an opinion of counsel, each to the effect 

that all conditions precedent to such transaction have been satisfied. 

Subordination of Common Securities Upon Default 

The Capital Securities of the Capital Securities Issuer will rank pari passu with, and payment thereon shall 

be made pro rata with, the Common Securities of such Capital Securities Issuer except that, where an event of 

default in respect of the Corresponding Debentures has occurred and is continuing, the rights of holders of such 

Common Securities to receive payment of distributions and payments upon Liquidation, redemption and otherwise 

are subordinated to the rights of the holders of such Capital Securities, with the result that no payment of any 

distribution on, or any amount payable upon the redemption of, any such Common Security, and no payment to the 

holder of any such Common Security on account of the Liquidation of such Capital Securities Issuer, shall be made 

unless payment in full in cash of all accrued and unpaid distributions on such Capital Securities for all distribution 

periods terminating on or prior thereto and all amounts payable on such Capital Securities then subject to 

redemption, in each case, shall have been made or provided for, and all funds immediately available to the 

Institutional Trustee of such Capital Securities Issuer shall first be applied to the payment in full in cash of the 

distributions and redemption amounts specified above that are then due and payable. 

Terms of the Corresponding Debentures 

The following is a summary of the material terms and provisions generally applicable to the Corresponding 

Debentures and does not purport to be complete. Accordingly, this summary is subject to and qualified by reference 

to the actual terms of the Affiliated Insurance Institution Indentures of the Affiliated Insurance Institutions and such 

Corresponding Debentures. The terms of the Corresponding Debentures related to Capital Securities expected to be 

purchased by the Issuer were purchased by the Warehouse Provider in a secondary market or similar transaction, as 

well as the governing documentation, may have different terms. See “Risk Factors— Secondary Market and Other 

Collateral Debt Securities May Have Different Terms.” As used in this section, all references to Capital Securities 

shall mean Insurance Capital Securities only, and all references to Capital Securities Issuer or Issuers shall mean 

Insurance Capital Securities Issuer or Issuers only. 

General. Concurrently with the issuance of its Capital Securities, each Capital Securities Issuer has 

invested the proceeds thereof, together with the consideration paid by its parent Affiliated Insurance Institution for 

the Common Securities, in Corresponding Debentures issued by such Affiliated Insurance Institution. The 

Corresponding Debentures represent junior subordinated, unsecured debt of the related Affiliated Insurance 

Institutions and have been issued pursuant to a separate Affiliated Insurance Institution Indenture. The 

Corresponding Debentures will be issued in definitive and/or global form. 

Subordination. Each Affiliated Insurance Institution Indenture provides that the related Corresponding 

Debentures are subordinated and junior in right of payment to the prior payment in full of all present and future 

Senior Indebtedness of the applicable Affiliated Insurance Institution. No payment of principal of or premium, if 

any, or interest on the Corresponding Debentures may be made (in cash, property, securities, by set-off or otherwise) 

if (i) any Senior Indebtedness of such Affiliated Insurance Institution is not paid when due and any applicable grace 

period with respect to a payment default under such Senior Indebtedness has ended and such default has not been 

cured or waived or ceased to exist or (ii) the maturity of any Senior Indebtedness of such Affiliated Insurance 

Institution has been accelerated because of a default and such acceleration has not been rescinded or cancelled and 

such Senior Indebtedness has not been paid in full. Upon any payment by an Affiliated Insurance Institution or any 

other distribution of assets of such Affiliated Insurance Institution to creditors upon any dissolution, winding-up, 

liquidation or reorganization, whether voluntary or involuntary, or in bankruptcy, insolvency, receivership or other 

proceedings, all amounts due on all Senior Indebtedness of such Affiliated Insurance Institution must be paid in full 

before the holders of the related Corresponding Debentures are entitled to receive or retain any payment. Upon 

satisfaction of all claims of all Senior Indebtedness then outstanding, the rights of the holders of the related 

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Corresponding Debentures will be subrogated to the rights of the holders of Senior Indebtedness of such Affiliated 

Insurance Institution to receive payments or other distributions applicable to such Senior Indebtedness until all 

amounts owing on such Corresponding Debentures are paid in full. 

The Affiliated Insurance Institution Indentures do not (i) limit the respective Affiliated Insurance 

Institutions or their subsidiaries from incurring future indebtedness, liabilities and obligations, including Senior 

Indebtedness, which may consist of other debt securities issued by such Affiliated Insurance Institution related to 

preferred securities of other subsidiaries of such Affiliated Insurance Institution, and secured debt or (ii) afford the 

Trustee, as the holder of the Capital Securities related to the Corresponding Debentures issued thereunder, protection 

in the event of a highly leveraged or other transaction involving such Affiliated Insurance Institution that may 

adversely affect it. 

Under each Affiliated Insurance Institution Indenture, the applicable Debenture Trustee is authorized to act 

on behalf of each holder of the related Corresponding Debentures to take such action as may be necessary or 

appropriate to effectuate, as between holders of such Corresponding Debentures and Senior Indebtedness, the 


The right of an Affiliated Insurance Institution to participate in any distribution of assets of any subsidiary 

upon such subsidiary’s liquidation or reorganization or otherwise is subject to the prior claims of creditors and 

preferred equity holders of such subsidiary, except to the extent the Affiliated Insurance Institution may itself be 

recognized as a creditor of such subsidiary. Even if an Affiliated Insurance Institution is recognized as a creditor of 

its insurance company subsidiary, its claims as such will likely be subordinated to those of policyholder creditors in 

the context of the liquidation of such insurance company subsidiary, pursuant to the applicable Insolvency Law. 

Accordingly, such Affiliated Insurance Institution’s obligations under its Corresponding Debentures will be 

effectively subordinated to all existing and future liabilities and preferred equity of such Affiliated Insurance 

Institution’s subsidiaries, and claimants may look only to the assets of such Affiliated Insurance Institution for 

payment. 

As a holding company, each Affiliated Insurance Institution relies primarily on dividends from such 

subsidiaries to meet its obligations for payment of principal of and premium, if any, and interest on its outstanding 

debt obligations and corporate expenses. The principal sources of the Affiliated Insurance Institution’s income are 

dividends, interest and fees from its subsidiaries. The insurance subsidiaries of Affiliated Insurance Institutions are 

subject to certain restrictions imposed by applicable law on extensions of credit to, and certain other transactions 

with, such Affiliated Insurance Institutions and certain other Affiliates and on investments in stock or other 

securities thereof. In addition, payment of dividends to an Affiliated Insurance Institution by its insurance 

subsidiaries is subject to ongoing review by insurance regulators and is subject to various statutory and contractual 

limitations and business considerations and in certain circumstances requires approval by insurance regulatory 

authorities. 

Maturity; Redemption. The Corresponding Debentures will mature and become due and payable, together 

with any accrued and unpaid interest thereon, including Deferred Interest and Additional Interest, if any, on 

August 1, 2028 and July 23, 2034, respectively. One of the Affiliated Insurance Institutions may redeem its 

Corresponding Debentures from time to time prior to maturity as described in “—Terms of the Insurance Capital 

Securities— Redemption and Prepayments.” 

Interest. The Corresponding Debentures bear interest at the Applicable Capital Securities Rate. The day 

count convention applicable to the Corresponding Debentures for any period is computed in the manner 

contemplated under “—Terms of the Insurance Capital Securities— Distributions.” 

Option to Extend Interest Payment Period. Each Affiliated Insurance Institution has the right to defer 

payments of interest on its Corresponding Debentures as described in “—Terms of the Insurance Capital 

Securities— Distributions.” 

Additional Interest. If at any time as a result of a Tax Event a Capital Securities Issuer is required to pay 

any additional taxes (including withholding taxes), duties, assessments or other governmental charges, then, in any 

such case, its parent Affiliated Insurance Institution will pay such Additional Interest on the Corresponding 

77

Debentures as shall be required so that the net amounts received and retained by such Capital Securities Issuer after 

paying all such taxes, duties, assessments or other governmental charges will equal the amounts such Capital 

Securities Issuer would have received and retained had no such taxes, duties, assessments or other governmental 

charges been imposed. 

Certain Covenants. If (i) there has occurred and is continuing an event of default (as described below) 

under an Affiliated Insurance Institution Indenture, (ii) an Affiliated Insurance Institution or, if applicable under “— 

Parent Guarantee”, an Affiliated Insurance Institution Parent, as the case may be, is in default with respect to its 

payment of any obligations under its Guarantee, or, if applicable, Parent Guarantee or (iii) an Affiliated Insurance 

Institution has given notice of its election to defer payments of interest on its Corresponding Debentures by 

extending the interest payment period as provided in the Affiliated Insurance Institution Indenture relating to such 

Corresponding Debentures, or any such Extension Period is continuing, then, except in certain limited 

circumstances, (a) such Affiliated Insurance Institution and, if applicable, Affiliated Insurance Institution Parent 

may not declare or pay any dividends or distributions on, or redeem, purchase, acquire or make a liquidation 

payment with respect to, any of its capital stock (other than with respect to capital stock held by the Affiliated 

Insurance Institution Parent, if applicable) and (b) such Affiliated Insurance Institution and, if applicable, Affiliated 

Insurance Institution Parent may not make any payment of interest or premium, if any, on or principal of, or repay, 

repurchase or redeem, any debt securities issued by such Affiliated Insurance Institution that rank pari passu with or 

junior in interest to its Corresponding Debentures, in the case of debt securities issued by such Affiliated Insurance 

Institution, or to such Parent Guarantee, in the case of debt securities issued by such Affiliated Insurance Institution 

Parent, as the case may be. 

The parent Affiliated Insurance Institution of each Capital Securities Issuer will, for so long as any Capital 

Securities Issuer Securities remain outstanding, maintain 100% ownership of the Common Securities of such Capital 

Securities Issuer; provided, however, that any successor of an Affiliated Insurance Institution permitted under the 

related Declaration and Affiliated Insurance Institution Indenture may succeed to such Affiliated Insurance 

Institution’s ownership of such Common Securities. 

Limitation on Mergers and Sales of Assets. Subject to the terms of the related Affiliated Insurance 

Institution Indenture, neither an Affiliated Insurance Institution nor any applicable Affiliated Insurance Institution 

Parent may consolidate or merge with or into another entity, or sell, convey, transfer or otherwise dispose of its 

property as an entirety, or substantially as an entirety, to another entity authorized to acquire and operate the same, 

unless, upon any such consolidation, merger, sale, conveyance, transfer or other disposition, the obligations of such 

Affiliated Insurance Institution under its Corresponding Debentures and the related Affiliated Insurance Institution 

Indenture or the obligations of such Affiliated Insurance Institution Parent under its Parent Guarantee and, if 

applicable, Guarantee, as the case may be, shall be expressly assumed by the successor entity formed by such 

consolidation or into which such Affiliated Insurance Institution or Affiliated Insurance Institution Parent shall have 

been merged, or which shall have acquired such property. In one case, the successor entity is not required to be a 

U.S. entity or to pay additional sums related to any withholding or other deduction in respect of payments on its 

Corresponding Debentures, Guarantee or the related Capital Securities or Parent Guarantee, as the case may be. 

Events of Default, Waiver and Notice. Each Affiliated Insurance Institution Indenture provides that any 

one or more of the following described events which has occurred and is continuing with respect to the 

Corresponding Debentures issued pursuant to such Affiliated Insurance Institution Indenture constitutes an “event of 

default” with respect to the Corresponding Debentures: 

(i) default for 30 days in payment of any interest on such Corresponding Debentures when due (it 

being understood that an extension of any interest payment period in accordance with the terms of the 

Corresponding Debentures shall not constitute a default under this clause); 

(ii) default in payment of principal of or premium, if any, on such Corresponding Debentures when 

due, either at maturity, upon redemption, by acceleration of maturity or otherwise; 

(iii) default by the applicable Affiliated Insurance Institution or, if applicable, the Affiliated Insurance 

Institution Parent in the performance of, or breach of, certain other of the covenants or agreements in such Affiliated 

Insurance Institution Indenture which shall not have been remedied for a period of 90 days after written notice to 

78

such Affiliated Insurance Institution and, if applicable, the Affiliated Insurance Institution Parent by the applicable 

Debenture Trustee or to such Affiliated Insurance Institution, Affiliated Insurance Institution Parent and Debenture 

Trustee by the holders of at least 25% in aggregate principal amount of such Corresponding Debentures; 

(iv) certain events of bankruptcy, insolvency or reorganization of the applicable Affiliated Insurance 

Institution or, if applicable, Affiliated Insurance Institution Parent; 

(v) the Liquidation of the applicable Affiliated Insurance Institution’s subsidiary Capital Securities 

Issuer, except in connection with the distribution of such Corresponding Debentures to the holders of Capital 

Securities Issuer Securities in liquidation of such Capital Securities Issuer, the redemption of all of such Capital 

Securities Issuer Securities, or mergers, consolidations or amalgamations, each if and as permitted by the 

Declaration; or 

(vi) 

any applicable Parent Guarantee shall cease to be in full force and effect. 

If in the case of clause (i), (ii), (iii) or (vi) an event of default shall have occurred and be continuing, either 

the applicable Debenture Trustee or the holders of not less than 25% in aggregate principal amount of the related 

Corresponding Debentures then outstanding may declare the principal of and unpaid accrued interest on all such 

Corresponding Debentures to be due and payable immediately, but upon certain conditions such declarations may be 

annulled and past defaults may be waived (except defaults in payment of principal of or premium, if any, or interest 

on the Corresponding Debentures, which must be cured or paid in full) by the holders of a majority in aggregate 

principal amount of such Corresponding Debentures then outstanding. If in the case of clause (iv) or (v) an event of 

default shall have occurred, the principal of and premium, if any, and accrued interest on all such Corresponding 

Debentures may automatically become immediately due and payable without further action. 

The right of any holder of Corresponding Debentures to receive payment of the principal of and premium, 

if any, and interest on such Corresponding Debentures when due, or to institute suit for the enforcement of any such 

payment, shall not be impaired or affected without the consent of such holder. 

An event of default under an Affiliated Insurance Institution Indenture also constitutes a Declaration Event 

of Default. Upon the occurrence of any Declaration Event of Default resulting from an event of default of 

Corresponding Debentures that permits acceleration of the maturity thereof, the Institutional Trustee, so long as it is 

the sole holder of the Corresponding Debentures, or the holders of a majority in liquidation amount of the related 

Capital Securities will have the right to declare the principal of and premium, if any, and interest on such 

Corresponding Debentures to be immediately due and payable. A waiver of any event of default under an Affiliated 

Insurance Institution Indenture will constitute a waiver of the corresponding Declaration Event of Default. 

Parent Guarantee. In one case, the parent of the Affiliated Insurance Institution issuing the Corresponding 

Debentures (the “Affiliated Insurance Institution Parent”) has irrevocably and unconditionally agreed to guarantee to 

holders of such Corresponding Debentures any payment that such Affiliated Insurance Institution is obligated to 

make under such Corresponding Debentures (the “Parent Guarantee”). The Affiliated Insurance Institution Parent’s 

obligation to make payments required by the Parent Guarantee may be satisfied by direct payment of the required 

amounts to the holders of the Corresponding Debentures or Capital Securities, as the case may be, or by causing its 

Affiliated Insurance Institution to pay such amounts to the holders of the related Corresponding Debentures or 

Capital Securities, as the case may be. In addition, the Affiliated Insurance Institution Parent, in lieu of its 

subsidiary Affiliated Insurance Institution, has also executed the Guarantee under the terms described below under 

“—Terms of the Guarantees.” 

The Parent Guarantee will constitute an unsecured obligation of the Affiliated Insurance Institution Parent 

and will rank subordinate and junior in right of payment to the prior payment in full of all present and future Senior 

Indebtedness of the Affiliated Insurance Institution Parent on terms comparable to those described above under “— 

Subordination.” 

79

Terms of the Guarantees 

The following is a summary of the material terms and provisions generally applicable to the Guarantees 

and does not purport to be complete. Accordingly, this summary is subject to and qualified by reference to the 

actual terms of the Guarantee of the Affiliated Insurance Institution or the Affiliated Insurance Institution Parent, as 

the case may be. As used in this section, all references to Capital Securities shall mean Insurance Capital Securities 

only, and all references to Capital Securities Issuer or Issuers shall mean Insurance Capital Securities Issuer or 

Issuers only. 

Each Affiliated Insurance Institution or the Affiliated Insurance Institution Parent has executed a 

Guarantee. Such Guarantee is a guarantee of the payment of certain amounts to holders of the Capital Securities 

issued by the related Capital Securities Issuer; provided, however, that such Guarantee will not apply to any payment 

of distributions or other amounts due on the Capital Securities except to the extent such Capital Securities Issuer has 

funds legally available therefor, which funds will not be so available except to the extent such Capital Securities 

Issuer’s parent Affiliated Insurance Institution or Affiliated Insurance Institution Parent, if applicable, has made 

corresponding payments on its Corresponding Debentures purchased by such Capital Securities Issuer or the Parent 

Guarantee, as the case may be. 

The Affiliated Insurance Institution or the Affiliated Insurance Institution Parent, as the case may be, has 

irrevocably and unconditionally agreed, to the limited extent set forth in its Guarantee, to pay in full, to holders of 

the related Capital Securities (except to the extent paid by such Capital Securities Issuer), as and when due, 

regardless of any defense (except the defense of payment by such Capital Securities Issuer), right of set-off or 

counterclaim which such Capital Securities Issuer may have or assert: (i) any accrued and unpaid distributions 

which are required to be paid on such Capital Securities, to the extent such Capital Securities Issuer shall have funds 

legally available therefor; (ii) the applicable redemption price of any Capital Securities called for redemption or 

subject to mandatory redemption by such Capital Securities Issuer, in each case in accordance with the terms of such 

Capital Securities, to the extent such Capital Securities Issuer has funds legally available therefor; and (iii) upon 

Liquidation of such Capital Securities Issuer (other than in connection with the distribution of the Corresponding 

Debentures to holders of such Capital Securities in exchange therefor), the lesser of (a) the aggregate of the 

liquidation amount and all accrued and unpaid distributions on such Capital Securities to the date of payment, to the 

extent such Capital Securities Issuer has funds legally available therefor, and (b) the amount of assets of such 

Capital Securities Issuer remaining legally available for distribution to holders of its Capital Securities in 

Liquidation of such Capital Securities Issuer after satisfaction of liabilities to creditors of such Capital Securities 

Issuer as required by applicable law. The obligation to make a payment under a Guarantee may be satisfied by 

direct payment of the required amounts to the holders of the related Capital Securities or by causing such Capital 

Securities Issuer to pay such amounts to such holders. 

Because each Guarantee is a guarantee of payment and not of collection, if the guarantee trustee fails to 

enforce the applicable Guarantee, holders of the related Capital Securities may proceed directly against the 

Affiliated Insurance Institution Parent, rather than having to proceed against the related Capital Securities Issuer 

before attempting to collect from such Affiliated Insurance Institution or Affiliated Insurance Institution Parent, as 

applicable, under its Guarantee, and such Affiliated Insurance Institution and, if applicable, Affiliated Insurance 

Institution Parent has waived any right or remedy to require that any action be brought against such Capital 

Securities Issuer or any other person or entity before proceeding against such Affiliated Insurance Institution or 

Affiliated Insurance Institution Parent. 

Each Guarantee has been deposited with the same trust company as the Institutional Trustee, as guarantee 

trustee to be held for the benefit of the holders of the related Capital Securities. Except as otherwise noted herein, 

the guarantee trustee has the right to enforce the Guarantee on behalf of holders of the related Capital Securities. 

The obligations of the Affiliated Insurance Institution or Affiliated Insurance Institution Parent under its 

Guarantee are subordinate and junior in right of payment to all of its present and future Senior Indebtedness and are 

also effectively subordinated to claims of creditors and preferred equity holders of its subsidiaries, and claimants 

should look only to the assets of such Affiliated Insurance Institution or Affiliated Insurance Institution Parent, as 

applicable, for payments thereunder. Also, as a holding company, each Affiliated Insurance Institution or Affiliated 

Insurance Institution Parent relies primarily on dividends, interest and fees from its subsidiaries to meet its 

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obligations and corporate expenses, payment of which is subject to statutory, contractual and regulatory limitations 

and business considerations. See “Risk Factors— Nature of the Insurance Capital Securities and Corresponding 

Debentures.” 

Effect of Obligations Under the Insurance Capital Securities, the Corresponding Debentures and the 

Guarantees 

As long as payments of interest and other amounts are made when due on the Corresponding Debentures of 

an Affiliated Insurance Institution, such payments will be sufficient to cover distributions and other amounts due on 

the related Insurance Capital Securities because of the following factors: (i) the aggregate principal amount of such 

Corresponding Debentures is equal to the aggregate liquidation amount of the related Insurance Capital Securities 

Issuer Securities; (ii) the interest rate (or manner of calculating such rate) and payment dates on the Corresponding 

Debentures correspond to the distribution rate (or manner of calculating such rate) and payment dates for such 

Insurance Capital Securities; and (iii) such Affiliated Insurance Institution is obligated to pay all, and its subsidiary 

Insurance Capital Securities Issuer will not be obligated to pay directly or indirectly any, costs, expenses, debts and 

other obligations of such Insurance Capital Securities Issuer (other than payments due on its Insurance Capital 

Securities Issuer Securities). 

The Guarantee of an Affiliated Insurance Institution or, if applicable, Affiliated Insurance Institution Parent 

(and, if applicable, Parent Guarantee) and such Affiliated Insurance Institution’s obligations under its Corresponding 

Debentures, the related Declaration and the related Affiliated Insurance Institution Indenture, including its 

obligations to pay costs, expenses, debts and other obligations of its subsidiary Insurance Capital Securities Issuer 

(other than with respect to the related Capital Securities Issuer Securities), collectively provide a full and 

unconditional guarantee on a subordinated basis of amounts when due on the related Insurance Capital Securities. 

However, if an Affiliated Insurance Institution does not make interest or other payments on its Corresponding 

Debentures and an Affiliated Insurance Institution Parent fails to make the required payment under any applicable 

Parent Guarantee, it is expected that its subsidiary Insurance Capital Securities Issuer will not have sufficient funds 

to pay the related amounts on its Insurance Capital Securities. A Guarantee itself will not apply to any payment due 

on the related Insurance Capital Securities except to the extent that the related Insurance Capital Securities Issuer 

has funds legally available for such payment. A Guarantee covers the payment of distributions and other payments 

on the Insurance Capital Securities only if and to the extent that the parent Affiliated Insurance Institution has made 

the related payments on the Corresponding Debentures held by an Insurance Capital Securities Issuer as its sole 

assets. 

If an Affiliated Insurance Institution fails to make interest or other payments on its Corresponding 

Debentures when due (after giving effect to any grace period or Extension Period) or another event of default under 

the related Affiliated Insurance Institution Indenture has occurred and is continuing, the Declaration provides a 

mechanism whereby a holder of the Insurance Capital Securities (one of which will be the Trustee) may direct the 

Institutional Trustee, to the fullest extent permitted by law, to enforce its rights under such Corresponding 

Debentures. If the Institutional Trustee fails to enforce its rights under such Corresponding Debentures after a 

majority in liquidation amount of the Insurance Capital Securities have so directed, the Trustee, as a holder of the 

Insurance Capital Securities, may, to the fullest extent permitted by law, institute a legal proceeding against the 

applicable Affiliated Insurance Institution to enforce the Institutional Trustee’s rights under such Corresponding 

Debentures without first instituting any legal proceedings against the Institutional Trustee or any other person or 

entity. Notwithstanding the foregoing, if a Declaration Event of Default has occurred and is continuing and such 

event is attributable to the failure of the applicable Affiliated Insurance Institution to pay principal of or premium, if 

any, or interest on the related Corresponding Debentures on the respective due dates (or, in the case of redemption, 

on the Redemption Date), then a holder of the Insurance Capital Securities may institute a direct cause of action 

against such Affiliated Insurance Institution for payment on or after the respective due dates (or, in the case of 

redemption, the Redemption Date) specified in the Corresponding Debentures. 

The provisions described above are intended to enable the Trustee to effectively enforce the Noteholders’ 

rights if a default occurs on any Insurance Capital Securities or Corresponding Debentures. For a description of the 

rights of the Collateral Manager and the Requisite Noteholders to take actions with respect to defaulted Collateral 

Debt Securities, see “—Exercise of Rights as Holder of Collateral Debt Securities; Enforcement of Defaulted 

Collateral Debt Securities”. 

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Description of the Insurance Surplus Note 

The Issuer expects to acquire a U.S.$8,000,000 aggregate Principal Balance Insurance Surplus Note issued 

by the Insurance Surplus Note Issuer. 

The following is a summary of the material terms and provisions generally applicable to the Insurance 

Surplus Note and does not purport to be complete. Accordingly, this summary is subject to, and qualified in its 

entirety by reference to, the actual terms of the Insurance Surplus Note Indenture governing the Insurance Surplus 

Note. 

The Insurance Surplus Note has been issued pursuant to an Indenture (the “Insurance Surplus Note 

Indenture”). The Insurance Surplus Note has been or will be issued in definitive and/or global form. 

For certain specific variable terms of the Insurance Surplus Note, see “—Portfolio Statistics— Statistics 

with respect to the Insurance Surplus Note.” 

Subordination 

Subject to the applicable law and regulations of the applicable state whose laws govern the payment of the 

Insurance Surplus Note by the Insurance Surplus Note Issuer, the Insurance Surplus Note will be subordinated and 

junior in right of payment to all present and future Senior Indebtedness and Senior Claims of the Insurance Surplus 

Note Issuer. No payment of principal of or premium, if any, or interest on the Insurance Surplus Note may be made 

if (i) any payment due in respect of any Senior Indebtedness of the Insurance Surplus Note Issuer is not paid when 

due and any applicable grace period with respect to a payment default under such Senior Indebtedness has ended 

and such default has not been cured or waived or ceased to exist or (ii) the maturity of any Senior Indebtedness of 

the Insurance Surplus Note Issuer has been accelerated because of a default and such acceleration has not been 

rescinded or cancelled and such Senior Indebtedness has not been paid in full. In addition, the Insurance Surplus 

Note Issuer may be party to agreements with holders of Senior Indebtedness that have the practical effect of further 

subordinating the rights of the holders of the Insurance Surplus Note to such holders of Senior Indebtedness under 

certain circumstances. 

Upon any distribution of assets of the Insurance Surplus Note Issuer to creditors upon any rehabilitation, 

liquidation, conservation or dissolution, whether voluntary or involuntary, or in insolvency or other proceedings, all 

Senior Claims and all amounts due on all Senior Indebtedness of the Insurance Surplus Note Issuer must be paid in 

full before the holders of the Insurance Surplus Note are entitled to receive or retain any payment. Subject to the 

Insolvency Law, upon payment in full or satisfaction of all Senior Claims and all Senior Indebtedness of the 

Insurance Surplus Note Issuer then outstanding, the holders of the Insurance Surplus Note will be subrogated to the 

rights of the persons to whom the Insurance Surplus Note Issuer is obligated under such Senior Claims and such 

Senior Indebtedness to receive payments or distributions applicable to such Senior Claims or Senior Indebtedness 

until all amounts owing on the Insurance Surplus Note are paid in full. 

The Insurance Surplus Note Indenture does not (i) limit the Insurance Surplus Note Issuer from incurring 

future indebtedness, liabilities and obligations, including secured debt and Senior Indebtedness, (ii) limit the 

aggregate amount of Senior Claims to which the Insurance Surplus Note Issuer is subject or (iii) afford the Trustee, 

as the holder of the Insurance Surplus Note, protection in the event of highly leveraged transaction or other 

transaction involving the Insurance Surplus Note Issuer that may adversely affect it. 

Interest 

Subject to satisfaction of any Payment Restrictions, interest on the Insurance Surplus Note will be payable 

quarterly in arrears on the respective payment dates set forth in the Insurance Surplus Note Indenture (each such 

date, subject to the applicable Business Day convention, an “Insurance Surplus Note Interest Payment Date”), at the 

“Applicable Insurance Surplus Note Interest Rate”, which is a floating rate. The Insurance Surplus Note will accrue 

interest at LIBOR, reset quarterly, plus a specified spread, as set forth in the Insurance Surplus Note Indenture. The 

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amount of interest payable for any period will be computed on the basis of the actual number of days in the related 

accrual period and a 360-day year. 

Notwithstanding anything to the contrary set forth in the Insurance Surplus Note Indenture, payments of 

principal of and premium, if any, and interest on the Insurance Surplus Note may be subject to certain restrictions 

under Applicable Insurance Laws or in the order, permit or the approval letter of the Applicable Regulator 

authorizing the issuance of the Insurance Surplus Note (“Payment Restrictions”). In order to qualify as surplus 

notes under, and otherwise comply with, Applicable Insurance Laws, the Insurance Surplus Note Indenture and 

Insurance Surplus Note generally provide that payments of principal of and premium, if any, and interest on the 

Insurance Surplus Note may be made only (i) with the prior approval of the Applicable Regulator, (ii) from the 

funds available to make payments with respect to the Insurance Surplus Note after adequate provision has been 

made for payment of all other obligations owed by the Insurance Surplus Issuer to any of its creditors (other than 

holders of other surplus notes of the Insurance Surplus Note Issuer which by their terms are expressly made pari 

passu to the Insurance Surplus Note. In addition, the approval letter of the Applicable Regulator approving the 

issuance of the Insurance Surplus Note provides a cap on the amount of interest that may be paid on the Insurance 

Surplus Note. In such event, the Insurance Surplus Note Issuer may be required by the Applicable Regulator or 

otherwise by Applicable Insurance Laws to take certain other actions in connection with its issuance of the 

Insurance Surplus Note (e.g., enter into an interest rate swap or other financial undertaking) as a condition to the 

Issuer’s purchase thereof; provided, however, that there is no assurance that the Insurance Surplus Note Issuer has 

taken or will take any such actions. 

The Insurance Surplus Note Issuer will covenant and agree that it will (x) use its best efforts to obtain the 

approval of the Applicable Regulator to make payments of principal of or premium, if any, or interest on its 

Insurance Surplus Note and (y) subject to the Payment Restrictions, duly and punctually pay or cause to be paid the 

principal of and premium, if any, and interest on such Insurance Surplus Note at the place, at the respective times 

and in the manner provided in the Insurance Surplus Note Indenture and such Insurance Surplus Note. To the extent 

that a payment of all or a portion of the principal of or premium, if any, or interest on an Insurance Surplus Note is 

prohibited by any Payment Restriction, such prohibition shall not be considered to be a forgiveness of such payment, 

and, to the extent not prohibited by Applicable Insurance Law, interest shall continue to accrue on such unpaid 

principal or premium, if any, at the Applicable Insurance Surplus Note Interest Rate (provided, however, that no 

interest shall accrue or be payable on any payment of interest that is not paid when due as a result of a Payment 

Restriction), and promptly (and in no event later than 30 days) after the removal of any such prohibition the 

Insurance Surplus Note Issuer, shall make payment of all amounts (including Deferred Interest) then past due and 

owing under its Insurance Surplus Note that are no longer prohibited by a Payment Restriction; provided, however, 

that any payment of interest that is not made when due as a result of a Payment Restriction shall not accrue interest. 

Furthermore, the Insurance Surplus Note Issuer will not be required to make any payment of interest on the 

Insurance Surplus Note for any Interest Period that is in excess of the Regulatory Interest Rate Limitation, if any, 

applicable to such Interest Period. In calculating the Applicable Insurance Surplus Note Interest Rate for any 

Interest Period, in the event that there is any Insurance Surplus Note Excess Interest as of such Interest Period to the 

extent permitted by Applicable Insurance Laws, the Applicable Insurance Surplus Note Interest Rate will be 

increased, to the extent necessary, but subject to any Regulatory Interest Rate Limitation applicable to such Interest 

Period, such that the amount of interest payable for such Insurance Surplus Note Interest Period is increased by the 

amount of Insurance Surplus Note Excess Interest. “Insurance Surplus Note Excess Interest” means the cumulative 

amount of interest on the Insurance Surplus Note, if any, that is not paid as a result of any Regulatory Interest Rate 

Limitations, minus the amount of interest paid on the Insurance Surplus Note as a result of adjustments to the 

Applicable Insurance Surplus Note Interest Rate to account for Insurance Surplus Note Excess Interest. 

Maturity; Redemption 

Subject to the satisfaction of any Payment Restrictions, the Insurance Surplus Note Issuer will repay the 

Insurance Surplus Note on January 8, 2035 (the “Insurance Surplus Note Maturity Date”). The Insurance Surplus 

Note Issuer may redeem the Insurance Surplus Note, in whole or from time to time in part on or after the initial 

optional redemption date specified in the Insurance Surplus Note Indenture, at the applicable Optional Redemption 

Price. The Insurance Surplus Note Issuer may also redeem the Insurance Surplus Note at the applicable Special 

Redemption Price, in whole but not in part, at any time, upon the occurrence and continuation of an Insurance 

83

Surplus Note Special Event, within 90 days following the occurrence of such Insurance Surplus Note Special Event. 

In all cases, the right of the Insurance Surplus Note Issuer to redeem the Insurance Surplus Note is subject to the 

giving of not less than 30 nor more than 60 days’ prior written notice and to the satisfaction of any Payment 

Restriction applicable to such redemption. 

Certain Covenants 

If there shall have occurred and be continuing an event of default under the Insurance Surplus Note 

Indenture or there is failure to make a payment of principal, premium, if any or interest with respect to the Insurance 

Surplus Note as a result of a Payment Restriction, then the Insurance Surplus Note Issuer shall not (i) declare or pay 

any dividends (other than dividends that would qualify as Senior Claims under Applicable Insurance Laws) to any of 

its policyholders or members or any other Person, or (ii) make any payment of principal of or premium, if any, or 

interest on or repay, repurchase or redeem any surplus notes issued by the Insurance Surplus Note Issuer that rank in 

all respects pari passu with or junior in interest to the Insurance Surplus Note, other than as may be required under 

Applicable Insurance Laws. 

Limitation on Conversion, Mergers and Sales of Assets 

The Insurance Surplus Note Issuer may not convert into a stock insurance company or any other form of 

entity, whether by demutualization, mutual holding company conversion or otherwise (any such conversion a 

“Demutualization”) or merge or consolidate with or into any other entity or sell, convey, transfer or otherwise 

dispose of all or substantially all of its assets to any entity unless (a) the successor entity shall be an entity organized 

and existing under the laws of the United States or any state thereof or the District of Columbia (unless such entity 

has (i) agreed to make all payments due in respect of the Insurance Surplus Note without withholding or deduction 

for, or on account of, any taxes, duties, assessments or other governmental charges under the laws or regulations of 

the jurisdiction of organization or residence (for tax purposes) of such entity or any political subdivision or taxing 

authority thereof or therein unless required by applicable law, in which case such entity shall have agreed to pay 

such additional amounts as shall be required so that the net amounts received and retained by the holders of the 

Insurance Surplus Note, after payment of all taxes (including withholding taxes), duties, assessments or other 

governmental charges, will be equal to the amounts that such holders would have received and retained had no such 

taxes (including withholding taxes), duties, assessments or other governmental charges been imposed, (ii) 

irrevocably and unconditionally consented and submitted to the jurisdiction of any United States federal court or 

New York state court, in each case located in the Borough of Manhattan, The City of New York, in respect of any 

action, suit or proceeding against it arising out of or in connection with the Insurance Surplus Note Indenture or the 

Insurance Surplus Note and irrevocably and unconditionally waived, to the fullest extent permitted by law, any 

objection to the laying of venue in any such court or that any such action, suit or proceeding has been brought in an 

inconvenient forum and (iii) irrevocably appointed an agent in The City of New York for service of process in any 

action, suit or proceeding referred to in clause (ii) above), and such entity expressly assumes all obligations of the 

Insurance Surplus Note Issuer under the Insurance Surplus Note and under the Insurance Surplus Note Indenture, (b) 

immediately after such transaction, the successor entity has an A.M. Best financial strength rating and S&P public 

financial strength rating equal to or higher than those ratings assigned to the Insurance Surplus Note Issuer, 

immediately prior to such transaction, (c) the Payment Restrictions to which the successor entity is subject, based on 

its jurisdiction of domicile or otherwise, are not materially more restrictive, with respect to the financial terms of the 

Insurance Surplus Note, than those to which the Insurance Surplus Note Issuer was subject upon original issuance of 

the Insurance Surplus Note, (d) the successor entity shall have received an opinion of a nationally recognized 

independent counsel experienced in such matters to the effect that such transaction will not affect the federal income 

tax treatment of the Insurance Surplus Note, (e) after giving effect to such transaction, no default or event of default 

under the Insurance Surplus Note Indenture shall have occurred and be continuing, and (f) the Insurance Surplus 

Note Issuer shall have obtained from the Applicable Insurance Regulator any approval required under the 

Applicable Insurance Laws. The Insurance Surplus Note Issuer may request a waiver of conditions (b) and (c) 

above by providing written notice of such request to all holders of the Insurance Surplus Note at least thirty (30) 

Business Days prior to the effective date of the proposed consolidation, merger, Demutualization, sale, conveyance, 

transfer or other disposition. The holders of the Insurance Surplus Note shall, within such thirty (30) Business Day 

period, vote on this issue and may, in their reasonable discretion, approve such waiver, upon the affirmative vote of 

holders of the Insurance Surplus Note holding a majority in aggregate principal amount of the Insurance Surplus 

Note then outstanding. 

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Events of Default, Waiver of Notice 

The Insurance Surplus Note Indenture provides that any event described below which has occurred and is 

continuing with respect to the Insurance Surplus Note constitutes an “event of default” with respect to the Insurance 

Surplus Note: 

(i) failure to pay, for 30 days, any interest on the Insurance Surplus Note when due (it being 

understood that the failure to make a payment of interest as a result of a Payment Restriction shall not 

constitute an event of default); 

(ii) failure to pay all or any part of the principal of or premium, if any, on the Insurance 

Surplus Note when due, whether at maturity, upon redemption, by acceleration of maturity or otherwise (it 

being understood that the failure to make a payment of principal or premium, if any, as a result of a 

Payment Restriction shall not constitute an event of default); 

(iii) failure by the Insurance Surplus Note Issuer to perform certain of its covenants or 

agreements in such Insurance Surplus Note Indenture, which shall not have been remedied for a period of 

90 days after written notice to the Insurance Surplus Note Issuer by the Insurance Surplus Note Trustee or 

to the Insurance Surplus Note Issuer and the Insurance Surplus Note Trustee by the holders of not less than 

25% in aggregate principal amount of such Insurance Surplus Note then outstanding; 

(iv) a state or federal regulator or agency having jurisdiction over the applicable Insurance 

Surplus Note Issuer shall obtain or issue an order for the rehabilitation, liquidation, conservation, 

supervision or dissolution and such order shall remain unstayed and in effect for a period of 90 consecutive 

days; or 

(v) the Insurance Surplus Note Issuer shall volunteer with respect to, or consent or agree to 

an order for, its rehabilitation, liquidation, conservation, supervision or dissolution. 

If an event of default referenced under clause (i), (ii) or (iii) above shall have occurred and be continuing, 

either the Insurance Surplus Note Trustee or the holders of not less than 25% in aggregate principal amount of the 

Insurance Surplus Note then outstanding may declare the principal of and premium, if any, and accrued, but unpaid, 

interest, on the Insurance Surplus Note to be due and payable immediately, subject to any Payment Restrictions, but 

upon certain conditions any such declaration may be annulled and past defaults may be waived (except defaults in 

payments of principal of or premium, if any, or interest on the Insurance Surplus Note, which must be cured or paid 

in full) by the holders of a majority in aggregate principal amount of the Insurance Surplus Note then outstanding. If 

an event of default referenced under clause (iv) or (v) above shall have occurred, the principal of and premium, if 

any, and accrued, but unpaid, interest, on the Insurance Surplus Note will automatically become immediately due 

and payable without further action, subject to any Payment Restrictions. 

For a description of the rights of the Collateral Manager and the Requisite Noteholders to take actions with 

respect to defaulted Collateral Debt Securities, see “—Exercise of Rights as Holder of Collateral Debt Securities; 

Enforcement of Defaulted Collateral Debt Securities”. 

Exercise of Rights as Holder of Collateral Debt Securities; Enforcement of Defaulted Collateral Debt 

Securities 

The Collateral Manager will, subject to and in accordance with the Indenture, on behalf of the Issuer, direct 

the Trustee as to whether to tender a Collateral Debt Security or Eligible Investment pursuant to any tender offer 

therefor or consent to or refuse to consent to any proposed amendment, modification or waiver pursuant to any 

solicitation therefor; provided, however that if such Collateral Debt Security is a defaulted Collateral Debt Security 

(as described in the following paragraph), the Collateral Manager shall give directions only to the extent permitted 

by and in accordance with the following paragraph. 

85

If the Issuer is permitted to take any action as holder of any defaulted Collateral Debt Security or with 

respect to any related Underlying Instrument (including granting any waiver or consent or exercising any voting or 

other right) or if any Collateral Debt Security or Underlying Instrument is in default of any covenant or other 

obligation (in each case whether or not such default constitutes a “default” or “event of default” (as defined in any 

applicable Underlying Instrument), (a) with the consent of the Majority Noteholders, the Collateral Manager may, 

and, at the direction of the Requisite Noteholders, the Collateral Manager will, instruct the Trustee (and, if 

applicable, the Issuer) to take such action as the the Collateral Manager may deem advisable to protect the interests 

of the Noteholders and to attempt to maximize the recovery value to the Noteholders, including engaging in 

restructuring efforts, bringing enforcement proceedings or taking any other measures that the Collateral Manager 

may deem appropriate, (b) the Requisite Noteholders may direct the Trustee (and, if applicable, the Issuer) to take 

such action as they may deem advisable (notwithstanding any contrary determination of the Collateral Manager), (c) 

each of the Trustee and the Collateral Manager may retain advisors selected by it (including legal advisors and 

investment banking or asset management firms), whose fees will constitute Administrative Expenses payable from 

Collections in accordance with the Priority of Payments and each of the Trustee and the Collateral Manager will be 

fully protected with respect to any action taken by it in reasonable good faith reliance on advice provided by such 

advisors; provided, that notwithstanding any such advice the Trustee may receive, the Trustee will only be required 

to take any action directed by the Requisite Noteholders pursuant to clause (b) above if adequate indemnity shall 

have been provided to the Trustee in accordance with the terms of the Indenture and (d) the Issuer will take only 

such actions as are instructed by the Collateral Manager in accordance with clause (a) above or the Requisite 

Noteholders in accordance with clause (b) above. In addition, as discussed under “—Disposition of the Collateral 

Debt Securities”, the Collateral Manager has the right to sell any Defaulted Collateral Debt Security or Credit Risk 

Security. 

Because of the illiquid nature of the Collateral Debt Securities, it is unlikely that a sale of any defaulted 

Collateral Debt Security could be made on economically acceptable terms. In certain cases, the Trustee (as pledgee 

of the Issuer) will be the holder of a substantial portion of the Collateral Debt Securities of any individual Collateral 

Debt Security Issuer and therefore the Collateral Manger or the Requisite Noteholders (as applicable in accordance 

with the preceding paragraph) will (subject to the terms of the related Underlying Instrument) be responsible for 

instructing the Trustee as to whether to approve or disapprove any waiver or material amendment of the terms of 

those Collateral Debt Securities that may be requested by a Collateral Debt Security Issuer, and the terms of those 

Collateral Debt Securities will require (subject to the terms of the related Underlying Instrument) the Trustee’s 

consent to any waiver or material amendment to those Collateral Debt Securities. In certain other cases, the Trustee 

will not own a substantial portion of the Collateral Debt Securities of any individual Collateral Debt Security Issuer 

and therefore the Collateral Manager or the Requisite Noteholders, as applicable, may not be able to control matters 

as to which holders thereof are entitled to vote, give their consent or take action. 

Portfolio Statistics 

The Issuer expects to acquire U.S.$300,000,000 in aggregate Principal Balance of Collateral Debt 

Securities from 54 different Collateral Debt Securities Issuers representing 47 different Affiliated Depository 

Institutions, two Bank Subordinated Note Issuers, two Affiliated Insurance Institutions and one Insurance Surplus 

Note Issuer. 

Statistics with respect to the Bank Capital Securities 

Amount. The Issuer expects to acquire U.S.$259,000,000 in aggregate Principal Balance of Capital 

Securities issued by Bank Capital Securities Issuers of 47 different Affiliated Depository Institutions. The amount 

of Bank Capital Securities (by Principal Balance) issued by any single Bank Capital Securities Issuer ranges from 

U.S.$500,000 to U.S.$10,000,000 with a mean and median amount equal to approximately U.S.$5,285,714 and 

U.S.$5,000,000, respectively. 

Distributions. Approximately (i) U.S.$155,350,000 Principal Balance of the Bank Capital Securities are 

Floating Rate Bank Capital Securities, (ii) U.S.$22,820,000 Principal Balance of the Bank Capital Securities are 

Fixed Rate Bank Capital Securities, and (iii) U.S.$80,830,000 Principal Balance of the Bank Capital Securities are 

Fixed/Floating Rate Bank Capital Securities. 

86

The weighted average spread over LIBOR with respect to the Floating Rate Bank Capital Securities is 

approximately 2.02% per annum; the weighted average fixed rate coupon with respect to the Fixed Rate Bank 

Capital Securities is approximately 8.07% per annum; the weighted average fixed rate coupon with respect to the 

Fixed/Floating Rate Bank Capital Securities during their respective Fixed Rate Periods is approximately 6.11% per 

annum; and the weighted average spread over LIBOR with respect to the Fixed/Floating Rate Bank Capital 

Securities after their respective Fixed Rate Periods is approximately 1.75% per annum. 

Distributions with respect to U.S.$238,180,000 Principal Balance of the Bank Capital Securities are 

payable quarterly and U.S.$20,820,000 Principal Balance of the Bank Capital Securities are payable semiannually. 

Maturity. The maturity dates of the Corresponding Debentures relating to the Bank Capital Securities 

range from September 15, 2028 to November 23, 2035. The aggregate Principal Balance of Bank Capital Securities 

relating to the Corresponding Debentures that mature in each such year is set forth in the table below: 

Year 

Aggregate Principal Balance 

2028 U.S.$1,000,000 

2029 12,820,000 

2031 2,000,000 

2032 2,500,000 

2033 6,000,000 

2034 47,350,000 

2035 187,330,000 

Special Redemption. Approximately U.S.$38,000,000 Principal Balance of the Bank Capital Securities 

provide for a Par Special Redemption Price; approximately U.S.$218,180,000 Principal Balance of the Bank Capital 

Securities provide for a Declining Premium Special Redemption Price; and approximately U.S.$2,820,000 Principal 

Balance of the Bank Capital Securities provide for a Make-Whole Special Redemption Price. 

Optional Redemption. Approximately U.S.$247,180,000 Principal Balance of the Bank Capital Securities 

provide for an Optional Redemption Price of 100%, and approximately U.S.$11,820,000 Principal Balance of the 

Bank Capital Securities provide for an Optional Redemption Price in excess of 100%. All of the Bank Capital 

Securities permit optional redemption after November 23, 2010. Approximately U.S.$70,670,000 Principal Balance 

of the Bank Capital Securities permit optional redemption on or prior to November 23, 2009, and approximately 

U.S.$259,000,000 Principal Balance of the Bank Capital Securities permit optional redemption on or prior to 

November 23, 2010. 

Statistics with respect to the Bank Subordinated Notes 

Amount. The Issuer expects to acquire U.S.$15,000,000 in aggregate Principal Balance of Bank 

Subordinated Notes issued by two different Bank Subordinated Note Issuers. 

Interest. Approximately (i) U.S.$8,000,000 Principal Balance of the Bank Subordinated Notes are Fixed 

Rate Bank Subordinated Notes and (ii) U.S.$7,000,000 Principal Balance of the Bank Subordinated Notes are 

Floating Rate Bank Subordinated Notes. 

The spread over LIBOR with respect to the Floating Rate Bank Subordinated Notes is 1.55% per annum 

and the fixed rate coupon with respect to the Fixed Rate Bank Subordinated Notes is 6.80% per annum. 

Interest with respect to U.S.$7,000,000 Principal Balance of the Bank Subordinated Notes is payable 

quarterly and U.S.$8,000,000 Principal Balance of the Bank Subordinated Notes is payable semiannually. 

Maturity. The maturity dates of the Bank Subordinated Notes are April 1, 2015 (U.S.$8,000,000) and 

August 23, 2015 (U.S.$7,000,000). 

87

Special Redemption. Approximately U.S.$7,000,000 Principal Balance of the Bank Subordinated Notes 

provide for a Declining Premium Special Redemption Price; and approximately U.S.$8,000,000 Principal Balance 

of the Bank Subordinated Notes are not redeemable prior to maturity under any circumstances. 

Optional Redemption. Approximately U.S.$7,000,000 Principal Balance of the Bank Subordinated Notes 

permit optional redemption on or after August 23, 2010 and provide for an Optional Redemption Price of 100%; and 

approximately U.S.$8,000,000 Principal Balance of the Bank Subordinated Notes are not redeemable prior to 

maturity under any circumstances. 

Statistics with respect to the Insurance Capital Securities 

Amount. The Issuer expects to acquire U.S.$18,000,000 in aggregate Principal Balance of Capital 

Securities issued by Insurance Capital Securities Issuers of two Affiliated Insurance Institutions. 

Distributions. Approximately (i) U.S.$8,000,000 Principal Balance of the Insurance Capital Securities are 

Floating Rate Insurance Capital Securities and (ii) U.S.$10,000,000 Principal Balance of the Insurance Capital 

Securities are Fixed Rate Insurance Capital Securities. 

The spread over LIBOR with respect to the Floating Rate Insurance Capital Securities is 3.80% per annum 

and the fixed rate coupon with respect to the Fixed Rate Insurance Capital Securities is 8.55% per annum. 

Distributions with respect to U.S.$8,000,000 Principal Balance of the Insurance Capital Securities are 

payable quarterly and U.S.$10,000,000 Principal Balance of the Insurance Capital Securities are payable 

semiannually. 

Maturity. The maturity dates of the Corresponding Debentures relating to the Insurance Capital Securities 

are August 1, 2028 (U.S.$10,000,000) and July 23, 2034 (U.S.$8,000,000). 

Special Redemption. Approximately U.S.$8,000,000 Principal Balance of the Insurance Capital Securities 

provide for a Make-Whole Special Redemption Price; and approximately U.S.$10,000,000 Principal Balance of the 

Insurance Capital Securities are not redeemable prior to maturity under any circumstances. 

Optional Redemption. Approximately U.S.$8,000,000 Principal Balance of the Insurance Capital 

Securities permit optional redemption after July 23, 2009 and provide for an Optional Redemption Price of 100%; 

and approximately U.S.$10,000,000 Principal Balance of the Insurance Capital Securities are not redeemable prior 

to maturity under any circumstances. 

Statistics with respect to the Insurance Surplus Note 

Amount. The Issuer expects to acquire U.S.$8,000,000 in aggregate Principal Balance of the Insurance 

Surplus Note issued by the Insurance Surplus Note Issuer. 

Interest. The Insurance Surplus Note is a floating rate note. The spread over LIBOR with respect to the 

Insurance Surplus Note is 3.30% per annum. Interest with respect to the Insurance Surplus Note is payable 

quarterly. 

Maturity. The maturity date of the Insurance Surplus Note is January 8, 2035. 

Price. 

Special Redemption. The Insurance Surplus Note provides for a Declining Premium Special Redemption 

Optional Redemption. The Insurance Surplus Note provides for an Optional Redemption Price of 100%. 

The Insurance Surplus Note permits optional redemption on or after January 8, 2010. 

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Disposition of the Collateral Debt Securities 

Collateral Debt Securities may be retired prior to their respective final maturities due to, among other 

things, the existence and frequency of exercise of any redemption features of such securities. In addition, subject to 

the terms of the Indenture and the Collateral Management Agreement, including the restrictions described herein, 

the Collateral Manager may direct the Trustee to sell any Credit Risk Security or Defaulted Security. The Collateral 

Manager shall not direct the Trustee on behalf of the Issuer to sell a Credit Risk Security unless the Collateral 

Manager certifies to the Trustee that the Collateral Manager believes, in its reasonable business judgment, that such 

security constitutes a Credit Risk Security; provided, further, that the Issuer will provide notification to Fitch of such 

sale within 30 days thereafter. The proceeds from such sales of Collateral Debt Securities (and other Collections 

received with respect to the Collateral Debt Securities) will be reinvested in Eligible Investments maturing on or 

prior to the Payment Date following receipt thereof and are required to be distributed on such following Payment 

Date in accordance with the Priority of Payments. 

In the event of an Optional Notes Redemption or a Mandatory Auction Call, the Collateral Manager may 

direct the Trustee to sell Collateral Debt Securities without regard to the foregoing limitations, provided that (i) the 

proceeds therefrom will be at least sufficient to pay certain expenses and other amounts and redeem in whole but not 

in part all Class A Notes, Class B Notes and Class C Notes to be redeemed simultaneously and (ii) such proceeds are 

used to make such a redemption. See “Description of the Notes— Optional Notes Redemption” and “—Mandatory 

Auction Call.” 

The Issuer may not dispose of any Collateral Debt Securities unless such disposition is made on an “arm’slength 

basis” for fair market value (as determined at the time the Issuer first enters a binding commitment to dispose 

of such Collateral Debt Security). Any disposition of Collateral Debt Securities will be conducted in accordance 

with the requirements of the Indenture and the Collateral Management Agreement and, if effected with the 

Collateral Manager, the Issuer, the Trustee or any Affiliate of any of the foregoing, will be effected in a secondary 

market transaction on terms as favorable to the holders of the Notes as would be the case if such person were not so 

affiliated. Unless the Collateral Manager is required by the terms of the Indenture to sell a Collateral Debt Security 

or an Eligible Investment, the Collateral Manager may refrain from directing the sale of securities of (i) Persons of 

which the Collateral Manager, its Affiliates or any of its or its Affiliates’ officers, directors or employees are 

directors or officers; (ii) Persons for which the Collateral Manager or any of its Affiliates act as financial advisor or 

underwriter; or (iii) Persons about which the Collateral Manager or any of its Affiliates have information which the 

Collateral Manager deems confidential or non-public or otherwise might prohibit it from trading such securities in 

accordance with applicable law. If the Collateral Manager, any Affiliate or any account managed by the Collateral 

Manager or any Affiliate (such Person, a “Manager Party”), owns any security that is issued by the same issuer as, 

and is substantially similar in terms of seniority, security (including available guarantees or other credit support) and 

right of payment to, a Collateral Debt Security owned by the Issuer (such security owned by a Manager Party, a 

“Corresponding Security”) and a Manager Party intends to dispose of such Corresponding Security, the Collateral 

Manager shall have no obligation to cause the Issuer to sell the related Collateral Debt Security held by the Issuer 

and the Collateral Manager shall not be liable to the Issuer, any Noteholder or any other Person for its decision not 

to sell the related Collateral Debt Security held by the Issuer if in the reasonable business judgment of the Collateral 

Manager the retention of such Collateral Debt Security is in the best interests of the Issuer. The Trustee shall have 

no responsibility to oversee compliance with the above conditions by the other parties. 

The Indenture 

LEGAL STRUCTURE 

The following summaries generally describe certain provisions of the Indenture. The summaries do not 

purport to be complete and are subject to, and qualified in their entirety by reference to, the provisions of the 

Indenture. 

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Modification of Indenture 

Except as set forth below, with the consent of the Requisite Noteholders and each Hedge Counterparty (to 

the extent such Hedge Counterparty would be materially or adversely affected thereby), the Trustee and the Co- 

Issuers may execute a supplemental indenture to add provisions to, or change in any manner or eliminate any 

provisions of, the Indenture or modify in any manner the rights of the Holders of Notes. However, without the 

consent of the Holders of each Outstanding Note affected thereby, no supplemental indenture may: 

(i) change the Stated Maturity Date or Payment Date of any Note; reduce the principal 

amount thereof or the rate of interest thereon; change the provisions of the Indenture relating to the 

application of proceeds of the Trust Estate to the payment of the Notes; change any time when, or place 

where, or the coin or currency in which, any Note or any amount payable thereunder is payable; or impair 

the right to institute suit for the enforcement of any such payment on or after the maturity thereof; 

(ii) reduce the percentage of the Aggregate Principal Amount of Notes held by Noteholders 

whose consent is required (A) for the authorization of any supplemental indenture, (B) for any waiver of 

compliance with certain provisions of the Indenture or Events of Default and their consequences or (C) to 

direct the Trustee to take any action under the Indenture or consent to the taking of any action by the 

Trustee; 

(iii) 

impair or adversely affect the Trust Estate in any material respect; 

(iv) permit the creation of any lien with respect to any part of the Trust Estate or terminate the 

lien of the Indenture on any property at any time subject thereto (other than pursuant to the terms of the 

Indenture or as required by applicable law) or deprive any Noteholder of the security afforded by the lien of 

the Indenture; 

(v) reduce the percentage of the Aggregate Principal Amount of Notes whose consent is 

required to direct the Trustee to preserve or liquidate the Trust Estate as described under “—Events of 

Default” below; 

(vi) modify any of the provisions of the Indenture with respect to supplemental indentures or 

waiver of defaults and their consequences except to increase the percentage of the Aggregate Principal 

Amount of Notes whose consent is required for any such action or to provide that other provisions of the 

Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Note 

affected thereby; 

(vii) modify the provisions thereof relating to Priority of Payments or subordination or the 

definitions of the terms “Holder” or “Outstanding”; or 

(viii) modify any of the provisions of the Indenture in such a manner as to affect the calculation 

of the amount of any payment of principal of or interest on or other amount in respect of any Note 

(including the calculation of any of the individual components of such calculations) or to adversely affect 

the right of the Noteholders to the benefit of any provisions for the redemption of such Notes (including the 

redemption price) contained therein. 

The Co-Issuers and the Trustee may also enter into supplemental indentures, without obtaining the consent 

of Noteholders, in order to (i) add to the covenants of the Co-Issuers for the benefit of the Secured Parties or to 

surrender any right or power conferred upon the Co-Issuers, (ii) pledge any property to or with the Trustee, (iii) 

evidence and provide for the acceptance of appointment by a successor trustee and to add to or change any of the 

provisions of the Indenture as shall be necessary to facilitate the administration of the Trust Estate by more than one 

trustee, (iv) correct or amplify the description of any property at any time subject to the lien of the Indenture, or 

better assure, convey and confirm unto the Trustee any property subject to the lien of the Indenture, (v) cure any 

ambiguity, or correct, modify or supplement any provision which is defective or inconsistent with any other 

provision in the Indenture; provided, that such amendment shall not, as evidenced by an opinion of counsel, 

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adversely affect in any material respect the interests of the Secured Parties, (vi) modify transfer restrictions on the 

Notes, in compliance with the Securities Act and the Investment Company Act and subject to ERISA limitations, or 

(vii) take any action necessary or helpful to prevent the Issuer or the Trustee from becoming subject to any 

withholding or other taxes or assessments or to reduce the risk that the Issuer will be engaged in a United States 

trade or business or otherwise subject to tax on a net income basis or to modify any provisions included in the 

Indenture for any such purpose that, as evidenced by an opinion of nationally recognized counsel, are no longer 

necessary for such purpose. 

Pursuant to the terms of the Indenture, the Noteholders, each Hedge Counterparty and the Rating Agencies 

will receive notice of any supplemental indentures. The Trustee will not be permitted to enter into any such 

supplemental indenture if, as a result of such supplemental indenture, any rating of the Class A-1 Notes (if then 

Outstanding and rated), the Class A-2 Notes (if then Outstanding and rated), the Class B Notes (if then Outstanding 

and rated), the Class C-1 Notes (if then Outstanding and rated) or the Class C-2 Notes (if then Outstanding and 

rated) would be reduced or withdrawn by Moody’s or S&P. In addition, the Trustee may not enter into any 

supplemental indenture which could reasonably be expected to materially and adversely affect the Collateral 

Manager unless the Collateral Manager gives written consent to the Trustee and the Issuer to such supplemental 

indenture at least one (1) Business Day prior to such execution and delivery (which consent shall not be 

unreasonably withheld). 

Consolidation, Merger or Transfer of Assets, Incurring of Indebtedness, Conduct of Business 

The Co-Issuers may not consolidate with, merge into, or transfer or convey all or substantially all of their 

assets to, any Person. In addition, the Co-Issuers may not incur any indebtedness other than the Notes and trade debt 

incidental to the performance of their obligations under the Indenture or engage in any business or activity other 

than the issuance of the Notes, the Ordinary Shares and the Co-Issuer’s common stock and the other transactions and 

activities contemplated herein. 

Events of Default 

An event of default (“Event of Default”) is defined in the Indenture as being: 

(i) a default for five days in the payment, when due and payable, of any Periodic Interest on 

the Class A-1 Notes, Class A-2 Notes or Class B Notes, or, if no Class A Notes or Class B Notes are 

Outstanding, on the Class C-1 Notes or Class C-2 Notes then Outstanding (or, in the case of a default in 

payment resulting solely from an administrative error or omission by the Trustee or any Paying Agent, such 

five days shall be calculated beginning on the date such party became aware of such administrative error; 

provided, however, that in no event shall such grace period continue for more than seven days); 

(ii) 

redemption date; 

a default in the payment of principal of any Note at its Stated Maturity Date or any 

(iii) a failure after five days to apply available amounts in accordance with the Priority of 

Payments (or, in the case of a default in payment resulting solely from an administrative error or omission 

by the Trustee or any Paying Agent, such five days shall be calculated beginning on the date such party 

became aware of such administrative error; provided, however, that in no event shall such grace period 

continue for more than seven days); 

(iv) either of the Co-Issuers or the Trust Estate becoming an investment company required to 

be registered under the Investment Company Act; 

(v) a default in any material respect in the performance, or a breach of any covenant, 

warranty or other agreement of the Issuer or the Co-Issuer in the Indenture, or the failure of any 

representation or warranty of the Issuer or the Co-Issuer made in the Indenture or in any certificate or other 

writing delivered pursuant to or in connection with the Indenture to be correct in all material respects when 

the same shall have been made, and the continuance of such default, breach or failure for a period of 30 

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days after notice to the Co-Issuers and the Collateral Manager by the Trustee or to the Co-Issuers, the 

Collateral Manager and the Trustee by the Holders of at least a majority in Aggregate Principal Amount of 

the Class A-1 Notes, for so long as the Class A-1 Notes are Outstanding, and thereafter at least a majority 

in Aggregate Principal Amount of the Class A-2 Notes, for so long as the Class A-2 Notes are Outstanding, 

and thereafter at least a majority in Aggregate Principal Amount of the Class B Notes, for so long as the 

Class B Notes are Outstanding, and thereafter at least a majority in Aggregate Principal Amounts of the 

Class C-1 Notes and Class C-2 Notes (voting as a single class for such purpose), for so long as the Class 

C-1 Notes or Class C-2 Notes are Outstanding, and thereafter, at least a majority in Aggregate Principal 

Amount of the Income Notes; or 

(vi) 

Co-Issuers. 

certain events of bankruptcy, insolvency, receivership or reorganization of either of the 

The Issuer shall promptly notify the Rating Agencies of the occurrence of an administrative error as 

referenced in clauses (i), (ii) and (iii) above. 

An event of insolvency could result if relief has been ordered against either of the Co-Issuers in a case 

under applicable bankruptcy law or the trustee, if any, for the Co-Issuers or a creditor of the Co-Issuers were to file 

an involuntary petition against the Co-Issuers. The filing of a petition against the Co-Issuers under applicable 

bankruptcy law could adversely affect the rights of the Noteholders to receive timely payments. 

If an Event of Default under the Indenture (other than an Event of Default of the type described in (vi) 

above) should occur and be continuing with respect to the Notes, with the consent of the Requisite Noteholders the 

Trustee may, and at the direction of the Requisite Noteholders the Trustee shall, declare the principal of and accrued 

and unpaid interest on the Notes to be immediately due and payable. If an Event of Default of the type described in 

(vi) above occurs, the Notes will automatically become immediately due and payable without any further action. 

At any time after such a declaration of or automatic acceleration of maturity has been made or occurs and 

before a judgment or decree for payment of the money due has been obtained by the Trustee, the Requisite 

Noteholders may rescind and annul such declaration and its consequences if (i) the Issuer has paid or deposited with 

the Trustee a sum sufficient to pay (A) all overdue amounts payable on or in respect of the Notes (other than 

amounts due solely as a result of the acceleration), (B) to the extent that payment of interest on such amount is 

lawful, interest on such overdue amounts at the Applicable Periodic Rate, and (C) all unpaid fees and expenses of 

the Issuer, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents 

and counsel; (ii) the Trustee has determined that all Events of Default, other than the nonpayment of such amount 

that has become due solely by such acceleration, have been (A) cured, and the Requisite Noteholders have agreed 

with such determination (which agreement shall not unreasonably be withheld), or (B) waived as provided in the 

Indenture; and (iii) all Hedge Agreements are still in effect or, if any Hedge Agreement has been terminated, it shall 

have been replaced by another Hedge Agreement on substantially identical terms. 

If the Notes are accelerated, or if the Stated Maturity Date has occurred, the Holders of the Class A Notes, 

Class B Notes and Class C Notes shall be entitled to receive the Aggregate Principal Amount for each such class, as 

well as the Periodic Interest for such class accrued since the previous Payment Date, and the Income Notes will be 

entitled to receive any remaining amounts after payment of all other obligations and expenses, all in the following 

order of priority: 

FIRST: in the following order, (a) to pay taxes and governmental fees payable by the Co-Issuers, if any; 

and then (b) to pay the Trustee the amount of any due and unpaid Trustee Fee; and then (c) to pay the Trustee the 

amount of any due and unpaid Trustee Expenses; and thereafter any other due and unpaid expenses (including other 

amounts payable to the Collateral Administrator under the Collateral Administration Agreement and other 

Administrative Expenses) of the Co-Issuers (including the Irish Stock Exchange fee but excluding the Collateral 

Management Fee (but including other amounts for which the Collateral Manager may claim reimbursement pursuant 

to the Collateral Management Agreement)); provided, however, that the cumulative amount paid under 

Subclause (c) (excluding any accounting fees that the Trustee is required to pay and any fees the Trustee pays in 

connection with Events of Default or any default of the Collateral Debt Securities) may not exceed U.S.$350,000 in 

the aggregate in any consecutive twelve (12) month period; 

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SECOND: to pay to the Collateral Manager any accrued and unpaid Collateral Management Fee; 

THIRD: to pay each Hedge Counterparty (a) any amounts due to such Hedge Counterparty under the 

related Hedge Agreement (other than termination payments) and (b) notwithstanding clause (a), any termination 

payments, which include any partial termination payments in connection with a Hedge Reduction, due to such 

Hedge Counterparty as a result of a Hedge Priority Event; 

FOURTH: to pay Periodic Interest on the Class A-1 Notes at the Applicable Periodic Rate (and Defaulted 

Interest on the Class A-1 Notes, if any); 

FIFTH: to pay Periodic Interest on the Class A-2 Notes at the Applicable Periodic Rate (and Defaulted 

Interest on the Class A-2 Notes, if any); 

SIXTH: to pay principal on the Class A-1 Notes until such Notes are paid in full; 

SEVENTH: to pay principal on the Class A-2 Notes until such Notes are paid in full; 

EIGHTH: to pay Periodic Interest on the Class B Notes at the Applicable Periodic Rate (and Defaulted 

Interest on the Class B Notes, if any); 

NINTH: to pay principal on the Class B Notes until such Notes are paid in full; 

TENTH: to pay Periodic Interest on the Class C-1 Notes at the Applicable Periodic Rate and the Class C-2 

Notes at the Applicable Periodic Rate, pro rata based on the respective amounts of Periodic Interest due thereon 

(including Defaulted Interest, but excluding any Class C-1 Note Deferred Interest and Class C-2 Note Deferred 

Interest with respect to the Class C-1 Notes and Class C-2 Notes, respectively); 

ELEVENTH: to pay principal on the Class C-1 Notes and Class C-2 Notes, pro rata (based on the 

respective Aggregate Principal Amounts thereof), until such Notes are paid in full (including Class C-1 Note 

Deferred Interest and Class C-2 Note Deferred Interest on the Class C-1 Notes and Class C-2 Notes, respectively); 

TWELFTH: to pay each Hedge Counterparty any termination payments to the extent not paid pursuant to 

clause THIRD above; 

THIRTEENTH: to pay any due and unpaid Trustee Expenses and expenses of the Co-Issuers to the extent 

not paid pursuant to clause FIRST above due to the limitations in the proviso to Subclause (c) thereof; and 

FOURTEENTH: all remaining amounts to the Holders of the Income Notes. 

If an Event of Default shall have occurred and be continuing or if the Stated Maturity Date has occurred, 

the Trustee shall retain the Trust Estate intact and collect and cause the collection of the proceeds thereof, including 

making a demand for payment under any Collateral Debt Security, Corresponding Debenture, Guarantee or Parent 

Guarantee, if applicable, and make and apply all payments and deposits and maintain all accounts in respect of the 

Notes in accordance with the provisions of the Indenture (including the priority described in the preceding paragraph 

if the Notes have been accelerated and the Priority of Payments described under “Description of the Notes— Priority 

of Payments” if the Notes have not been accelerated) unless a sale or liquidation of the Trust Estate has been 

directed by the Requisite Noteholders. If the Notes have been declared due and payable pursuant to the Indenture or 

if the Stated Maturity Date has occurred, any such retention may be rescinded at any time by written notice to the 

Trustee and the Co-Issuers from the Requisite Noteholders directing the Trustee to sell or liquidate the Trust Estate 

or any portion thereof. 

Pursuant to the Indenture, as security for the payment by the Issuer of the fees of the Trustee and any sums 

to which the Trustee may be entitled to receive as indemnification by the Issuer, the Issuer has granted the Trustee a 

lien on the Trust Estate. The Trustee’s lien is exercisable by the Trustee only if the Notes have been declared due 

93

and payable following an Event of Default, and the acceleration of the maturity of such Notes as a result of such 

Event of Default has not been rescinded or annulled. 

Subject to the provisions of the Indenture relating to the duties of the Trustee, in case an Event of Default 

with respect to the Notes shall occur and be continuing, the Trustee will be under no obligation to exercise any of 

the rights or powers under the Indenture at the request or direction of any Noteholders, unless such Noteholders shall 

have offered to the Trustee reasonable security or indemnity. Subject to such provisions for indemnification and 

certain limitations contained in the Indenture, the Requisite Noteholders will have the right to direct the time, 

method and place of conducting any proceeding of any remedy available to the Trustee or exercising any trust or 

power conferred on the Trustee with respect to the Notes and, in certain cases, to waive any default with respect to 

such Notes, except a default in payment of any amount payable in respect of any Note or a default in respect of a 

covenant or provision of the Indenture that cannot be modified without the waiver or consent of the Holder of each 

Outstanding Note affected thereby. 

Rights Under the Indenture 

No Noteholder will have the right to institute any proceeding with respect to the Indenture unless (1) such 

Holder previously has given to the Trustee written notice of a continuing Event of Default, (2) the Holders of at least 

25% of the Aggregate Principal Amount of the most senior class of Notes then Outstanding have made written 

request upon the Trustee to institute such proceedings in its own name as Trustee, (3) such Holder or Holders have 

offered the Trustee reasonable indemnity as provided in the Indenture, (4) the Trustee for 30 days after its receipt of 

such notice, request and offer of indemnity has failed to institute any such proceeding, and (5) no direction 

inconsistent with such written request has been given to the Trustee during such 30-day period by the Requisite 

Noteholders. 

Satisfaction and Discharge of the Indenture 

The Indenture will be discharged with respect to the Collateral securing the Notes upon delivery to the 

Trustee for cancellation of all of the Notes, or, with certain limitations (including the obligation to pay principal and 

interest and fees and expenses), upon deposit with the Trustee of cash or Eligible Investments sufficient for the 

payment thereof. 

Trustee 

JPMorgan Chase Bank, National Association will be the Trustee under the Indenture for the Notes. The 

Issuer and its Affiliates may maintain other banking relationships in the ordinary course of business with the 

Trustee. The Trustee and its Affiliates may receive compensation in connection with the Trustee’s investment of 

trust assets in certain Eligible Investments as provided in the Indenture. 

As compensation for the performance of its obligations under the Indenture, the Trustee will receive the 

Trustee Fee. The Trustee Fee will accrue if unpaid (but without the accrual of any interest thereon) and be payable 

on the next Payment Date on which funds are available therefor in accordance with the Priority of Payments. 

The Trustee will receive reimbursement for those expenses incurred by it in any Due Period in carrying out 

provisions of the Indenture (the “Trustee Expenses”). Trustee Expenses will be payable on the Payment Date 

related to each such Due Period (including without limitation a Final Maturity Date), or to the extent there are not 

sufficient funds available therefor on such Payment Date, on a subsequent Payment Date, in accordance with the 

Priority of Payments. 

The Indenture contains provisions for the indemnification of the Trustee and its officers, directors, 

employees and agents for any loss, liability or expense incurred without negligence, willful misconduct or bad faith 

on its part, arising out of or in connection with the acceptance or administration of the Indenture. 

The Trustee may resign at any time by providing 30 days’ notice to the Issuer, the Noteholders and the 

Rating Agencies, for so long as the Class A-1 Notes, Class A-2 Notes, Class B Notes, Class C-1 Notes or Class C-2 

94

Notes are rated by such Rating Agencies. The Trustee may be removed at any time by the Requisite Noteholders or 

by a court of competent jurisdiction under the conditions set forth in the Indenture. No resignation or removal of the 

Trustee will become effective until a successor Trustee has accepted its appointment. 

The Trustee will undertake to perform only such duties as are specifically set forth in the Indenture and, in 

case a default with respect to the Notes has occurred, prior to the receipt of directions, if any, from the Requisite 

Noteholders, must exercise in respect of such default the same degree of care and skill as a prudent person would 

exercise or use in the conduct of his or her own affairs. However, the Trustee shall be under no obligation to 

exercise any of the rights or powers vested in it by the Indenture or to honor the request or direction of the 

Noteholders unless the Noteholders shall have offered to the Trustee reasonable security or indemnity against all 

costs, expenses and liabilities which might reasonably be incurred by it in compliance with such request or direction. 

Governing Law 

The Indenture, the Collateral Management Agreement, the Notes and the other documents relating to the 

Notes will be construed in accordance with the laws of the State of New York. 

Reports 

Quarterly Reports. Not later than the second Business Day prior to each Payment Date commencing 

December 2005, the Trustee, the Initial Purchasers, the Placement Agents, the Collateral Manager, the Rating 

Agencies, each Hedge Counterparty, the Holders of the Income Notes and, upon written request, any Holder of a 

Class A Note, Class B Note or Class C Note will receive a quarterly report with respect to such Payment Date (the 

“Quarterly Report”), which may be combined with the Note Valuation Report for such period, containing the 

following information determined as of the related Calculation Date: 

? The Aggregate Principal Amount of the Collateral Debt Securities and the principal balance, the 

current interest rate, maturity date and Geographical Region of each Collateral Debt Security in 

the Trust Estate, the first call date of each Collateral Debt Security, if applicable, whether each 

Collateral Debt Security is a Bank Capital Security, a Bank Subordinated Note, an Insurance 

Capital Security or an Insurance Surplus Note, the identity of each Collateral Debt Security that 

has been sold, including its par value and Sale Proceeds, the identity of each Collateral Debt 

Security that has been called, including its par value and call proceeds 

? The balance of Eligible Investments in each account, the Principal Balance of each Eligible 

Investment in each account, the annual interest rate, maturity date, the rating and the issuer of each 

Eligible Investment in the Trust Estate 

? The nature, source and amount of any Collections received since the date as of which information 

was given in the last Quarterly Report 

? The identity of each Collateral Debt Security which is a Defaulted Security; the identity of each 

Collateral Debt Security which ceased to be a Defaulted Security since the date as of which 

information was given in the last Quarterly Report; and the identity of each Collateral Debt 

Security that has been sold since the last Quarterly Report 

? The calculation of each of the Coverage Tests, whether or not each such test is satisfied and the 

amount or percentage required for such test to be satisfied, and the calculation of the Moody’s 

total diversity score 

? To the extent the Collateral Administrator is in receipt of such information, financial data for each 

Affiliated Depository Institution and Bank Subordinated Note Issuer (which will not be identified 

by name in the report) and financial data for all Affiliated Depository Institutions and Bank 

Subordinated Note Issuers in the aggregate (by weighted average Principal Balance) as follows: 

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Capital: ratio of “Tier 1 Capital” to risk weighted assets, the leverage ratio and the ratio of double 

leverage (except in the case of Bank Subordinated Note Issuers that are not holding companies) 

Asset Quality: ratio of non-performing assets to loans and other real estate owned, ratio of 

reserves to non-performing loans, and ratio of net charge-offs to loans 

Earnings: return on assets, return on equity, net interest margin, and efficiency ratio 

Liquidity: ratio of loans to assets, ratio of loans to deposits, total assets, and net income 

Assets and Deposits: total assets of each issuer and total deposits of each issuer 

?? To the extent the Collateral Administrator is in receipt of such information, the following financial 

data with respect to each Affiliated Insurance Institution and Insurance Surplus Note Issuer, in each 

case for the most currently available quarter, the previously reported quarter, the 12 months preceding 

and the initial 12-month period following the Closing Date: 

Capital: On an annual basis, the NAIC risk based capital ratio (i.e., the ratio of “total adjusted 

capital” to “calculated authorized control level risk based capital”, in each case as such terms are 

defined under the NAIC Risk Based Capital Model Act) and on a quarterly basis, total admitted 

assets, the ratio of consolidated debt and preferred stock to total capital for the insurance company 

and total policyholders’ surplus, which, in the case of life and health insurance companies, shall 

include asset valuation reserves 

Asset Quality: On a quarterly basis, total assets, the ratio of NAIC Class 1 and Class 2 rated 

investments to total fixed income investments and the ratio of NAIC Class 1 and Class 2 rated 

investments to total investments 

Operating Performance: On a quarterly basis, return on policyholders’ surplus (trailing twelve 

month period) and, for property and casualty insurance company issuers, expense ratio, loss and 

loss adjustment expense ratio, combined ratio and the ratio of net premiums written (trailing 

twelve month period) to policyholders’ surplus 

? The Aggregate Principal Amount of the Fixed Rate Collateral Debt Securities, Fixed/Floating Rate 

Collateral Debt Securities and the Floating Rate Collateral Debt Securities (expressed as a dollar 

amount and as a percentage of the Aggregate Principal Amount of Collateral Debt Securities) 

? The Swap Notional Amount and the Cap Notional Amount 

? The ratings of each Hedge Counterparty or its guarantor, as applicable 

? The results of the S&P CDO Monitor Test (as defined in the Indenture) 

Note Valuation Report. With respect to each Payment Date, the Trustee, the Initial Purchasers, the 

Placement Agents, the Collateral Manager, the Rating Agencies, the Holders of the Income Notes, and so long as 

any Notes are listed on the Irish Stock Exchange, the Irish Stock Exchange or its agent and, upon written request, 

any Holder of a Class A Note, Class B Note or Class C Note, not later than the second Business Day prior to such 

Payment Date will receive a Note Valuation Report (which may be combined with the Quarterly Report for such 

period) containing the following information determined as of the related Calculation Date: 

? The Aggregate Principal Amount of the Collateral Debt Securities as of the close of business on 

such Calculation Date after giving effect to Principal Collections received during the related Due 

Period 

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? The Aggregate Principal Amount of each Class of Notes, the amount of principal payments to be 

made on such Class on the Payment Date and the Aggregate Principal Amount of such Class after 

giving effect to such principal payments (expressed as a dollar amount and as a percentage of the 

original Aggregate Principal Amount of such Class) 

? The Periodic Interest Amount for each of the Class A-1 Notes, Class A-2 Notes, Class B Notes, 

Class C-1 Notes and Class C-2 Notes and the Shortfall Amount, if any 

? The amount of Interest Collections and Principal Collections received during the related Due 

Period 

? The Trustee Fees, the Collateral Management Fee and the Administrative Expenses 

? The balance of all cash and Eligible Investments in the Interest Collection Account and the 

Principal Collection Account, the amounts payable on such Payment Date, and the balance of all 

cash and Eligible Investments remaining in the Interest Collection Account and the Principal 

Collection Account after giving effect to such payments 

? The balance of all cash and Eligible Investments in the Class A/B Reserve Account, the amounts 

payable on such Payment Date, and the balance of all cash and Eligible Investments remaining in 

the Class A/B Reserve Account after giving effect to such payments 

? The balance of all cash and Eligible Investments in the Expense Reserve Account, the amounts 

payable on such Payment Date, and the balance of all cash and Eligible Investments remaining in 

the Expense Reserve Account after giving effect to such payments 

? The balance of all cash and Eligible Investments in the Semiannual Receipts Account as of such 

Calculation Date 

? The results of the Coverage Tests and whether or not the Coverage Tests are satisfied and the 

percentage required for each such test to be satisfied. If any Coverage Test is not met, the amount 

of the Coverage Prepayment necessary to cause such Coverage Test to be met, and the results of 

such Coverage Test after giving effect to such Coverage Prepayment and other payments, if any 

? The identity of each Pledged Security that is a Defaulted Security 

? The percentages of the Aggregate Principal Amount of the Collateral Debt Securities by issuer and 

by Affiliated Depository Institution and Affiliated Insurance Institution, if applicable, (which will 

not be identified by name in the report) and Geographical Region 

? The amount distributable pursuant to each step in the Priority of Payments 

Notices 

Notices to the Holders of the Notes shall be given by first-class mail, postage prepaid, to the registered 

Holders of such Notes at their addresses appearing in the Note Register. In addition, for so long as any of the Notes 

are listed on the Irish Stock Exchange and the rules of the Irish Stock Exchange so require, notices to the holders of 

such Notes will also be published in the Irish Stock Exchange’s Official List. 

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DESCRIPTION OF THE HEDGE AGREEMENTS 

General 

The Issuer will on the Closing Date enter into two interest rate hedge agreements (such agreements, and 

any replacements therefor entered into in accordance with the Indenture, the “Hedge Agreements”) with 

Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A. (the initial “Hedge Counterparty”) consisting of an interest 

rate swap and an interest rate cap. The rights of the Issuer under the Hedge Agreements will be pledged to the 

Trustee pursuant to the Indenture as security for the payments due on the Notes. Scheduled payments required to be 

made by the Issuer under the Hedge Agreements, together with any other amounts due to a Hedge Counterparty 

under the Hedge Agreements, will be paid in accordance with the Priority of Payments as described under 

“Description of the Notes— Priority of Payments.” The Hedge Agreements will be governed by and construed in 

accordance with New York law and will be documented on standard forms published by the International Swaps and 

Derivatives Association, Inc., including the 1992 ISDA Master Agreement (Multicurrency-Cross Border) form, with 

the related Hedge Counterparty. The following summary as well as other pertinent information included elsewhere 

in this Offering Circular describes certain terms of the Hedge Agreements but does not purport to be complete and is 

subject to, and is qualified in its entirety by reference to, all of the provisions of the Hedge Agreements. 

The Hedge Counterparty and the Issuer will be required in accordance with the terms of the Hedge 

Agreement to pay additional amounts sufficient to cover any Indemnifiable Tax (as such terms are defined in the 

ISDA Master Agreement) withheld from payments made under such Hedge Agreement. The Hedge Agreement 

contains “limited recourse” and “non-petition” provisions equivalent to the “limited recourse” and “non-petition” 

provisions set forth in the Indenture. The Issuer will not enter into any Hedge Agreement the acquisition, ownership 

or disposition of which would subject the Issuer to tax on a net income basis in any jurisdiction outside the Issuer's 

jurisdiction of incorporation. The Issuer will not enter into any replacement Hedge Agreement unless the Rating 

Condition has been satisfied (and the Issuer will provide Fitch with notification of the entry by the Issuer into such 

replacement Hedge Agreement within 30 days thereafter). 

The Interest Rate Swap 

Under the interest rate swap agreement (the “Swap”), for each Payment Date prior to the termination of the 

Swap, the initial Hedge Counterparty will pay to the Issuer a quarterly floating amount equal to the product of: (a) 

the 3-month LIBOR rate for the relevant calculation period as determined under the Swap; (b) the Swap Notional 

Amount for the relevant calculation period; and (c) the quotient of the actual number of days in that calculation 

period divided by 360. In exchange for the floating amounts due from the Hedge Counterparty under the Swap, for 

each Payment Date prior to the termination of the Swap, the Issuer will pay to the Hedge Counterparty a quarterly 

fixed amount equal to the product of: (a) 4.666%; (b) the Swap Notional Amount for the relevant calculation period; 

and (c) the quotient of 90 days divided by 360, adjusted for months where the Payment Date is not a Business Day. 

The Swap effective date will be September 8, 2005. The “Swap Notional Amount” will be equal to $95,000,000 for 

the calculation periods relating to the Payment Dates from and including the Payment Date in December 2005 to and 

including the Payment Date in September 2008, $85,000,000 for the calculation periods relating to the Payment 

Dates from and including the Payment Date in December 2008 to and including the Payment Date in September 

2010, and $30,000,000 for the calculation periods relating to the Payment Dates from and including the Payment 

Date in December 2010 to and including the Payment Date in September 2015. 

Under the Swap, the Issuer will receive an upfront payment from the initial Hedge Counterparty of 

$660,500 on the Closing Date (the “Upfront Payment”), which will be used by the Issuer, together with the proceeds 

of the offering, to purchase the Collateral Debt Securities and pay certain fees and expenses. See “Use of Proceeds.” 

As a result, the fixed rate payments made by the Issuer during the term of the Swap will be higher than they would 

have been if no Upfront Payment were made by the initial Hedge Counterparty. If the Hedge Agreements with the 

initial Hedge Counterparty are terminated early, a termination payment owed by the Issuer to the initial Hedge 

Counterparty will be higher than it would have been if the Upfront Payment had not been made, and such payment 

will be made to the initial Hedge Counterparty before any payments are made to Noteholders. 

On any Payment Date, the Collateral Manager acting on behalf of the Issuer, will have the right to 

terminate the Swap in whole or in part by giving prior notice to the Hedge Counterparty and indicating the portion 

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of the Swap Notional Amount with respect to which the Swap is to be terminated, if not terminated in whole, and 

provided that there is satisfaction of the Rating Condition as of such Payment Date (a “Hedge Reduction”). Any 

such reduction of the Swap Notional Amount will reduce periodic payments under the Swap beginning on the 

Payment Date following such reduction. Following such reduction the Issuer or the Hedge Counterparty may be 

obligated to make a termination payment under the Swap. 

The Interest Rate Cap 

Under the interest rate cap agreement (the “Cap”), the initial Hedge Counterparty will be required to pay to 

the Issuer on each Payment Date occurring on or after the Payment Date in March 2012 and on or prior to the 

Payment Date in June 2019, a floating amount equal to the product of (i) the excess of 3-month LIBOR rate for the 

relevant calculation period as determined under the Cap over 8.50%, (ii) the Cap Notional Amount for the relevant 

calculation period, and (iii) the quotient of the actual number of days in that calculation period divided by 360. In 

exchange for the floating amounts due from the Hedge Counterparty under the Cap, the Issuer will make a payment 

to the Hedge Counterparty of U.S.$72,250 on each Payment Date prior to and including the Payment Date in 

September 2007 in accordance with the Priority of Payments. The Cap effective date will be December 1, 2011. The 

“Cap Notional Amount” will be equal to $65,000,000 for the calculation periods relating to the Payment Dates from 

and including the Payment Date in March 2012 to and including the Payment Date in June 2014, $0 for the 

calculation periods relating to the Payment Dates from and including the Payment Date in September 2014 to and 

including the Payment Date in September 2016, and $70,000,000 for the calculation periods relating to the Payment 

Dates from and including the Payment Date in December 2016 to and including the Payment Date in June 2019. 

Early Termination 

The Swap may be partially terminated in connection with a Hedge Reduction as described above. Each of 

the Hedge Agreements may be terminated by the Issuer or by the relevant Hedge Counterparty, as applicable, upon 

the occurrence of certain Hedge Agreement Events of Default or Hedge Termination Events relating thereto (any 

such termination, an “Early Termination”). “Hedge Agreement Events of Default” include, among other things, a 

failure to make payments when due; certain breaches of representations; and bankruptcy. “Hedge Termination 

Events” include, among other things, certain changes in law that would render it illegal for a party to perform its 

obligations under the related Hedge Agreement; redemption in whole of the Notes; certain events resulting from an 

Event of Default under the Indenture; and certain additional termination events specified in the related Hedge 

Agreement, including an Optional Notes Redemption or Mandatory Auction Call (in the case of such an Optional 

Notes Redemption or Mandatory Auction Call, with the Issuer designated the sole Affected Party (as defined in the 

Hedge Agreement)). Early Termination of one Hedge Agreement will cause an Early Termination of all of the 

Hedge Agreements with the same Hedge Counterparty. Upon a termination of a Hedge Agreement, whether or not 

caused by the Issuer, the Issuer may be obligated to make a termination payment to the Hedge Counterparty which 

payment will be made in accordance with the Priority of Payments. 

Each Hedge Agreement will provide that in the event that (i) with respect to the relevant Hedge 

Counterparty (A) the short-term rating of such Hedge Counterparty or its guarantor, as applicable, is suspended, 

withdrawn or downgraded below “P-1” (including “P-1” on negative credit watch) from Moody’s or “A-1” from 

S&P or is reduced below “F1” by Fitch or the long-term rating of such Hedge Counterparty or its guarantor, as 

applicable, falls below “Aa3” from Moody’s, “A+” from S&P or “A” by Fitch or (B) with respect to any person that 

becomes a Hedge Counterparty after the Closing Date, (1) the short-term issuer credit rating of such Hedge 

Counterparty or its guarantor, as applicable, is suspended, withdrawn or downgraded below “P-1” (including “P-1” 

on negative credit watch) from Moody’s or “A-1” from S&P or is reduced below “F1” by Fitch or the long-term 

rating of such Hedge Counterparty or its guarantor, as applicable, is withdrawn, suspended or downgraded below 

“A1” (including “A1” on negative credit watch) from Moody’s or “A+” from S&P (unless such Hedge Counterparty 

also has a short-term rating of at least “A-1” from S&P) or is reduced below “A” by Fitch or (2) if no short-term 

rating is available from Moody’s, the long-term rating of such Hedge Counterparty or its guarantor, as applicable, 

from Moody’s is withdrawn, suspended or downgraded below “Aa3” (each, a “Collateralization Event”), such 

Hedge Counterparty will be required, following such Collateralization Event, to maintain eligible collateral 

satisfactory to each Rating Agency then rating each such Class of Notes as certified by each Rating Agency then 

rating such Notes or to assign its rights and obligations in accordance with the terms of such Hedge Agreement, and 

(ii) if either (A) the short-term issuer credit rating of such Hedge Counterparty or its guarantor, as applicable, from 

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Fitch is reduced below “F2” or, if no short-term rating is available, the long-term unsecured debt rating of such 

Hedge Counterparty or its guarantor, as applicable, from Fitch is reduced below “BBB+”; (B) the short-term issuer 

credit rating of such Hedge Counterparty or its guarantor, as applicable, from S&P is suspended, withdrawn or 

downgraded below “A-3” or if the long-term rating of such Hedge Counterparty or its guarantor, as applicable, from 

S&P is withdrawn, suspended or downgraded below “BBB-”; or (C) (1) with respect to the initial Hedge 

Counterparty as of the Closing Date, the long-term issuer credit rating of such Hedge Counterparty or its guarantor, 

as applicable, from Moody’s is withdrawn, suspended or downgraded below “A3”; or (2) with respect to any person 

that becomes a Hedge Counterparty after the Closing Date, (x) the short-term issuer credit rating of such Hedge 

Counterparty or its guarantor, as applicable, from Moody’s is withdrawn, suspended or downgraded below “P-1” or 

the long-term rating of such Hedge Counterparty or its guarantor, as applicable, from Moody’s is withdrawn, 

suspended or downgraded below “A2” or (y) if no short-term rating is available, the long-term rating of such Hedge 

Counterparty or its guarantor, as applicable, from Moody’s is withdrawn, suspended or downgraded below “A1” 

(each, a “Substitution Event”), then such Hedge Counterparty will be required, immediately following such 

Substitution Event, to assign its rights and obligations under the related Hedge Agreement to a new Hedge 

Counterparty (the “Substitute Party”) selected by the Hedge Counterparty in accordance with the terms of such 

Hedge Agreement provided that such an assignment will not comply with this provision unless as of the date of such 

transfer, neither the other Hedge Counterparty nor the Issuer will be required to withhold or deduct on account of 

any Tax (as defined in the relevant Hedge Agreement) from any payments under the relevant Hedge Agreement; 

provided, further, that if the Hedge Counterparty fails to assign to a Substitute Party within 5 Business Days after 

the Substitution Event, the Substitute Party may be selected by the Issuer; and provided, further, that such right shall 

be subject to the assumption by the Substitute Party of all of such Hedge Counterparty’s obligations thereunder and 

subject to the payment to such Hedge Counterparty or by such Hedge Counterparty (as applicable) of a termination 

payment. Any failure to take the remedial action described herein within 30 days following a Collateralization 

Event or 7 Business Days following a Substitution Event will constitute an additional Hedge Termination Event 

with the Hedge Counterparty designated the sole Affected Party (as defined in the Hedge Agreement). 

The Trustee shall deposit all collateral received from a Hedge Counterparty into a separate trust account 

(each, a “Hedge Counterparty Collateral Account”) established in the name of the Trustee for the benefit of the 

Noteholders and such Hedge Counterparty. The only permitted withdrawal from or application of funds on deposit 

in, or otherwise to the credit of, a Hedge Counterparty Collateral Account shall be (i) for application to obligations 

of the relevant Hedge Counterparty to the Issuer under the related Hedge Agreement if the Hedge Agreement 

becomes subject to early termination or (ii) to return collateral to the relevant Hedge Counterparty when and as 

required by the related Hedge Agreement. Funds on deposit in each Hedge Counterparty Collateral Account will be 

invested in Eligible Investments. 

Any payments received from the Hedge Counterparty in connection with a termination of the Hedge 

Agreements, including a Hedge Reduction, (other than amounts applied or to be applied to enter into replacement 

Hedge Agreements) will be deposited into the Interest Collection Account as Interest Collections immediately upon 

receipt and applied on the related Payment Date in accordance with the Priority of Payments. 

Without the consent of any Noteholder, the Issuer and the Hedge Counterparty may make changes to any of 

the terms of the Hedge Agreements prior to its execution, so long as the Rating Condition is satisfied with respect to 

the change (and the Issuer provides Fitch notification of such changes within 30 days thereafter). 

The Notes do not represent an obligation of any Hedge Counterparty. Noteholders will not have any right 

to proceed directly against any Hedge Counterparty in respect of such counterparty’s obligations under any related 

Hedge Agreement. 

THE COLLATERAL MANAGER 

The information appearing in this section has been prepared by the Collateral Manager and has not been 

independently verified by the Initial Purchasers, the Placement Agents or the Co-Issuers and none of the foregoing 

(other than the Collateral Manager) assumes any responsibility for the accuracy, completeness or applicability of 

such information; provided, however, that the Co-Issuers assume responsibility for the accurate reproduction herein 

of such information provided by the Collateral Manager. 

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General Information 

Sandler O’Neill Advisors, L.P. (“Sandler O’Neill Advisors” or the “Collateral Manager”), a Delaware 

limited partnership, is an Affiliate of Sandler O’Neill & Partners, L.P., one of the Initial Purchasers and Placement 

Agents. The duties and obligations of the Collateral Manager are solely those of the Collateral Manager and are not 

guaranteed by any Affiliate of the Collateral Manager, including Sandler O’Neill & Partners, L.P. 

The Collateral Manager was formed in January, 2005. Since its formation the Collateral Manager has not 

managed the assets of any other issuer or person, however, it expects to in the future. The Collateral Manager does 

not currently have any employees but has entered into a services contract with Sandler O’Neill & Partners, L.P. 

pursuant to which Sandler O’Neill & Partners, L.P. will provide certain administrative services to the Collateral 

Manager. Pursuant to this services agreement Sandler O’Neill & Partners, L.P. will make available to the Collateral 

Manager the services of certain professionals that are employed by Sandler O’Neill & Partners, L.P. to perform the 

Collateral Manager’s obligations under the Collateral Management Agreement. The Collateral Manager is located at 

919 Third Avenue, 6 th floor, New York, New York 10019. 

The Collateral Manager is registered as an investment adviser with the SEC. Copies of the Collateral 

Manager’s Form ADV Part II may be obtained from the Collateral Manager by written request. 

Key Personnel 

Set forth below is information regarding the background, principal occupations and other affiliations for the 

key individuals whose services the Collateral Manager will use in connection with its performance under the 

Collateral Management Agreement, although it may not necessarily continue to use their services during the entire 

term of the Collateral Management Agreement. 

Thomas W. Killian, a Principal for the Collateral Manager, is currently a Principal of the Investment 

Banking Group of Sandler O’Neill & Partners, L.P. Mr. Killian, who joined Sandler O’Neill & Partners, L.P. in 

January 1992, is a member of the Capital Commitments Committee and has been one of the Partners of the firm 

responsible for overseeing the capital raising process across all product lines, including debt, equity, trust preferred 

securities and structured finance. He has co-managed the Sandler O’Neill & Partners, L.P. team responsible for 

successfully completing 16 pooled trust preferred transactions that collectively have raised over $6.5 billion for 

approximately 650 financial institutions. In addition, he has personally been responsible for managing the 

successful execution of over $8.2 billion of capital raising transactions. A frequent speaker at industry and 

regulatory conferences (including the Federal Reserve Bank and the FDIC) on issues impacting financial institutions 

and capital markets, Mr. Killian is a graduate of the University of North Carolina at Chapel Hill and Northwestern 

University's J.L. Kellogg Graduate School of Management. 

Robert A. Kleinert, a Principal for the Collateral Manager, is currently a Principal and Head of Syndicate 

at Sandler O’Neill & Partners, L.P. Mr. Kleinert, who joined Sandler O’Neill & Partners, L.P. in September 2001, 

is responsible for managing the capital raising process across all product lines, including debt, equity, trust preferred 

securities and structured finance. Prior to joining Sandler O’Neill & Partners, L.P., Mr. Kleinert was Chairman of 

CSJ Investments, and he was also the Head of Debt and Equity Syndicate at Salomon Brothers for nearly 20 years, 

concentrating on Emerging Markets, High Yield and High Grade issuances. Mr. Kleinert has a B.S. in Engineering 

from Princeton University. 

Conrad M. Chanzit, Portfolio Manager for the Collateral Manager, joined Sandler O’Neill & Partners, 

L.P. in October 2001 as Associate Director of Fixed Income Research, and is currently Managing Director of the 

Investment Strategy Group. He came to Sandler O’Neill & Partners, L.P. from Back Bay Advisors, where he was 

Senior Vice President and Director of Research covering banks and financial service companies as an analyst from 

1995 – 2001. Previously, Mr. Chanzit held a variety of senior investment advisory and analytical roles at Aetna in 

Hartford, Connecticut and at Salomon Brothers. Mr. Chanzit received a B.A. in History and Economics from 

Northwestern University in 1976, and an M.B.A in Finance and Marketing from the University of Chicago in 1978. 

Jason H. Mendelson, Assistant Portfolio Manager for the Collateral Manager, has been with Sandler 

O’Neill & Partners, L.P. since June 2003. He was initially hired as an associate in Sandler O’Neill & Partners’ 

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Equity Research Department and now works in that firm’s Investment Strategy Department. Prior to joining Sandler 

O’Neill & Partners, L.P., Mr. Mendelson was a management consultant to Alliance Capital. He also held senior 

roles at start-up technology companies and spent his early career in the Strategy Group at Ernst & Young. Mr. 

Mendelson received a B.S.B.A in Finance with an Engineering minor in Computer Science from Washington 

University in St. Louis. 

Peeyush Varshney, Associate Director for the Collateral Manager, is currently an Associate Director in 

Fixed Income at Sandler O’Neill & Partners, L.P. Prior to joining Sandler O’Neill & Partners, L.P., Mr. Varshney 

was a Vice President in Credit Risk Management at JP Morgan Chase. He was involved in conducting numerous 

analytical studies looking at the bank’s internal wholesale portfolio and determining key aspects of the associated 

risk. Prior to his work at JP Morgan Chase, Mr. Varshney had a 6-year career in environmental consulting in 

Houston, Texas. Mr. Varshney holds an M.B.A. in Finance from the Graduate School of Business at the University 

of Chicago and a Ph.D. in Civil Engineering from Iowa State University. 

Jared Luft, Associate Director for the Collateral Manager, is currently an Associate Director in Fixed 

Income at Sandler O’Neill & Partners, L.P. He is responsible for conducting quantitative analytics for the Fixed- 

Income division. He is also instrumental in management and development of Sandler O’Neill & Partners, L.P.’s 

various Fixed-Income portfolio analytics platforms. Prior to joining Sandler O’Neill & Partners, L.P., Mr. Luft 

attended the University at Albany, where he acquired a B.S. in Finance/MIS and a B.A. in Communication. 

General 

THE COLLATERAL MANAGEMENT AGREEMENT 

The Collateral Manager will perform on behalf of the Issuer certain duties specifically delegated to it in 

accordance with the Collateral Management Agreement, the Collateral Administration Agreement and the Indenture. 

The Collateral Manager will advise the Issuer with respect to the selection and acquisition of (i) the Collateral Debt 

Securities to be acquired by the Issuer on the Closing Date and (ii) the Eligible Investments to be acquired by the 

Issuer from time to time and will advise the Issuer with respect to the disposition of any Collateral Debt Securities 

and Eligible Investments. The Collateral Manager will advise the Issuer with respect to entering into, assigning, 

transferring, terminating and reducing the notional amount of the Hedge Agreements. 

The Collateral Manager will perform its duties and functions under the Collateral Management Agreement, 

the Collateral Administration Agreement and the Indenture, subject to the terms and conditions thereof, with 

reasonable care and in good faith using a degree of skill and attention (i) no less than that which the Collateral 

Manager exercises with respect to comparable assets that it administers for itself and for others and (ii) consistent 

with practices and procedures as are customarily followed by reasonable and prudent institutional managers of assets 

of the nature and character of the Trust Estate in substantially similar types of transactions. To the extent consistent 

with the foregoing, the Collateral Manager may follow its existing procedures relating to assets of the nature and 

character of the Trust Estate in performing its duties under the Collateral Management Agreement, the Collateral 

Administration Agreement and the Indenture. The Collateral Manager will be entitled to indemnification by the 

Issuer under certain circumstances (as described more fully below), which amounts will be payable in accordance 

with the Priority of Payments. The Collateral Manager may delegate to an agent selected with reasonable care any 

of the duties assigned to it under the Collateral Management Agreement; provided that (i) no delegation by the 

Collateral Manager of any of its duties under the Collateral Management Agreement will relieve the Collateral 

Manager of any of its duties under the Collateral Management Agreement nor relieve the Collateral Manager of any 

liability with respect to the performance of such duties, (ii) the Collateral Manager will be solely responsible for the 

fees and expenses payable to any such third party, (iii) such delegation does not constitute an “assignment” under 

the Investment Advisers Act of 1940 and (iv) such delegation will not cause the Issuer to be subject to tax that 

would not have been imposed but for the existence of any present or former connection between such delegate and 

the taxing jurisdiction. 

Pursuant to the terms of the Collateral Management Agreement, the Collateral Manager will not assume 

any liability other than to render the services called for thereunder and under the terms of the Indenture applicable to 

it in good faith and, subject to the standard of conduct described therein, will not be liable for any action of the 

102

Issuer or the Trustee in following or declining to follow any advice, recommendation or direction of the Collateral 

Manager. The Collateral Manager and its members, managers, partners, directors, officers, employees and Affiliates 

will not be liable to the Issuer, the Trustee, the Noteholders or any other person for any expenses, losses, claims, 

damages, judgments, assessments, costs or other liabilities (collectively, “Liabilities”) incurred by any such person 

that arise out of or in connection with the actions taken or recommended, or for any omissions, by the Collateral 

Manager, its members, managers, partners, directors, officers, employees or Affiliates under the Collateral 

Management Agreement or under the Indenture, or for any decrease in the value of the Collateral Debt Securities, 

except, by reason of (i) acts constituting bad faith, willful misconduct, fraud or gross negligence in the performance, 

or reckless disregard, of the obligations of the Collateral Manager under the Collateral Management Agreement or 

under the terms of the Indenture applicable to it or (ii) a material misstatement or omission with respect to the 

information under the heading “The Collateral Manager” herein. The Collateral Manager and its members, 

managers, partners, directors, officers, employees and Affiliates will not be liable for any consequential, special, 

punitive, exemplary or treble damages or lost profits. 

The Collateral Manager will not be responsible for any failure to fulfill its duties under the Collateral 

Management Agreement if such failure is caused by or directly or indirectly due to a Force Majeure Event, provided 

that the Collateral Manager uses commercially reasonable efforts to minimize the effect of such event. For these 

purposes, the term “Force Majeure Event” means such an operation of the forces of nature as reasonable foresight 

and ability could not foresee or reasonably provide against and includes acts of God, flood, war, terrorism, fire, 

strikes or work stoppages, embargo, government action, any laws, ordinances, regulations or the like which restrict 

or prohibit the providing of the services contemplated by the Collateral Management Agreement, inability to obtain 

material, equipment, or communications or computer facilities, or the failure of equipment or interruption of 

communications or computer facilities, and other causes beyond a party’s control. 

Pursuant to the terms of the Collateral Management Agreement, the Issuer will indemnify and hold 

harmless the Collateral Manager, Affiliates of the Collateral Manager and the directors, managers, officers, 

stockholders, members, partners, agents and employees of the Collateral Manager (each such party being in such 

case, an “Indemnified Party”) from and against any and all Liabilities, and will promptly reimburse each such 

Indemnified Party for all reasonable fees and expenses (including reasonable fees and expenses of counsel) 

(collectively, the “Expenses”) incurred in connection with any claim or investigation with respect to any pending or 

threatened litigation , caused by, or arising out of or in connection with the issuance of the Notes (including, without 

limitation, any untrue statement of material fact contained herein or omission or alleged omission to state a material 

fact necessary in order to make the statements herein, in light of the circumstances under which they were made, not 

misleading), the transactions contemplated by this Offering Circular, the Indenture or the Collateral Management 

Agreement and any acts or omissions of any such Indemnified Party; provided, however, that such Indemnified 

Party will not be indemnified for any Liabilities or Expenses (i) incurred as a result of any acts or omissions by any 

such Indemnified Party that constitute bad faith, willful misconduct, gross negligence in the performance, or 

reckless disregard, of the obligations of the Collateral Manager under the Collateral Management Agreement or 

under the terms of the Indenture applicable to it or (ii) incurred as a result of the information herein under the 

heading “The Collateral Manager” containing any untrue statement of material fact or omitting to state a material 

fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, 

not misleading. The obligations of the Issuer to indemnify any Indemnified Party for any Liabilities or Expenses 

will be payable solely out of the Trust Estate in accordance with the Priority of Payments. 

The Collateral Manager may not enter into an assignment (within the meaning of the Investment Advisers 

Act of 1940) of its rights or responsibilities under the Collateral Management Agreement, (a) unless the Rating 

Condition is satisfied in respect of such assignment as a result of such assignment and (b) without the consent of the 

Issuer and the Holders of a majority of the Aggregate Principal Amount (a “Majority-in-Interest”) of the 

Outstanding Income Notes. The Collateral Manager will be permitted, without the consent of the Issuer or any of 

the Noteholders or satisfaction of the Rating Condition, to assign its rights and obligations under the Collateral 

Management Agreement to an Affiliate, so long as (i) such assignment is not an assignment within the meaning of 

the Investment Advisers Act of 1940 and (ii) such Affiliate (A) has the ability to professionally and competently 

perform duties similar to those imposed upon the Collateral Manager under the Collateral Management Agreement, 

(B) is legally qualified and has the capacity to act as Collateral Manager under the Collateral Management 

Agreement and (C) immediately after the assignment, employs, or has access to the services of, principal personnel 

performing the duties required under this Agreement who have skills and experience substantially commensurate 

103

with that of the individuals who would have performed such duties had the assignment not occurred. The Collateral 

Manager may not assign the Collateral Management Agreement to any Person unless such Person represents that it 

can perform its obligations thereunder without subjecting the Issuer to tax that would not have been imposed but for 

the existence of any present or former connection between such Person and the taxing jurisdiction. Subject to the 

terms of the Collateral Management Agreement, the Collateral Manager may retain advisors to assist it in the 

performance of its obligations under the Collateral Management Agreement. 

The Collateral Management Agreement may not be amended or modified without the prior written consent 

of the Holders of Notes that would be sufficient to meet the voting requirements for such an amendment or 

modification if it were made to the Indenture. 

The Collateral Manager may be removed and the Collateral Management Agreement terminated by the 

Issuer or the Trustee upon at least 90 days’ prior written notice to the Collateral Manager at the direction of Holders 

of not less than 75% (by Aggregate Principal Amount) of the Outstanding Class A Notes and Class B Notes (voting 

as a combined class) in the event that each of the Class A/B Coverage Tests as of any Calculation Date are less than 

100% or, if no Class A Notes or Class B Notes are Outstanding, at the direction of the holders of not less than 75% 

(by Aggregate Principal Amount) of the Outstanding Class C Notes in the event that each of the Class C Coverage 

Tests as of any Calculation Date are less than 100%. The Collateral Manager may resign and the Collateral 

Management Agreement may be terminated without cause by the Collateral Manager upon 90 days’ written notice 

to the Issuer (or such shorter notice as is acceptable to the Issuer), the Trustee and the Rating Agencies. The 

Collateral Management Agreement may be terminated without cause by the Issuer or the Trustee upon at least 90 

days’ prior written notice to the Collateral Manager, at the direction of the Holders of at least 66-2/3% of the 

Aggregate Principal Amount of the Outstanding Notes of each Class of Notes, voting separately; provided, however, 

that the Rating Condition (with respect to S&P) is satisfied with respect to such termination. 

The Collateral Manager will be automatically removed and the Collateral Management Agreement 

terminated in the event the Collateral Manager or the Issuer takes any action that would require a registration of the 

Issuer or the Co-Issuer or of the Trust Estate under the provisions of the Investment Company Act, and the Issuer 

notifies the Collateral Manager thereof. 

The Collateral Manager may be removed and the Collateral Management Agreement terminated for Cause 

(as defined below) upon 10 days’ prior written notice to the Collateral Manager by the Issuer or Trustee, at the 

written direction of (a) the Requisite Noteholders or (b) the Holders of at least 66-2/3% of the Aggregate Principal 

Amount of the Outstanding Income Notes. For purposes of the Collateral Management Agreement, “Cause” will 

mean: (a) the Collateral Manager willfully and intentionally violates any provision of the Collateral Management 

Agreement or any terms of the Indenture applicable to it (including, without limitation, any representation contained 

therein); (b) the Collateral Manager breaches in any respect any provision of the Collateral Management Agreement 

or any terms of the Indenture applicable to it (other than as covered by subclause (a) and it being understood that 

failure to meet any Coverage Test is not a breach under this subclause (b)) and such breach has a material adverse 

effect on the Noteholders of any Class (in each case, in their capacity as Noteholders) and fails to cure such breach 

within 30 days after notice of such failure is given to the Collateral Manager unless, if such failure is not remediable 

in such 30-day period, the Collateral Manager has taken such action that the Collateral Manager in good faith 

believes will remedy, and that does in fact remedy, such failure within 60 days after its becoming aware of, or its 

receiving notice of, such failure; (c) the failure of any representation, warranty, certification or statement made or 

delivered by the Collateral Manager in or pursuant to the Collateral Management Agreement or the Indenture to be 

correct in any respect when made and such failure is reasonably expected to have a material adverse effect on the 

Holders of any Class of Notes (in each case, in their capacity as Noteholders) and, if capable of being cured, is not 

cured within 30 days after the Collateral Manager becomes aware of, or its receipt of notice from the Issuer or the 

Trustee of, such failure; (d) certain events of bankruptcy, insolvency, receivership or reorganization of the Collateral 

Manager; (e) the occurrence of an act by the Collateral Manager that constitutes fraud or criminal activity in the 

performance of its obligations under the Collateral Management Agreement, or the Collateral Manager or any of its 

executive officers primarily responsible for administration of the Collateral Debt Securities (in the performance of 

his or her investment management duties) being indicted or convicted of a criminal offense related to its primary 

business (provided that, in the case of an indictment of any of its executive officers, the Collateral Manager shall 

have a grace period of five (5) days following receipt of notice of termination from the Issuer or the Trustee 

pursuant to the Collateral Management Agreement in which to terminate the employment of such officer in order to 

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avoid termination of the Collateral Management Agreement); or (f) the Collateral Manager consolidates or 

amalgamates with, or merges with or into, or transfers all or substantially all its assets to, another Person and either 

(A) at the time of such consolidation, amalgamation, merger or transfer, the resulting, surviving or transferee Person 

fails to assume all the obligations of such party under the Collateral Management Agreement by operation of law or 

pursuant to an agreement reasonably satisfactory to the Issuer or (B) immediately after such consolidation, 

amalgamation, merger or transfer, the resulting, surviving or transferee Person fails to employ, or have access to the 

services of, principal personnel performing the duties required under the Collateral Management Agreement who 

have skills and experience substantially commensurate with that of the individuals who would have performed such 

duties had such consolidation, amalgamation, merger or transfer not occurred. 

At all times that the Collateral Manager or any of its Affiliates is acting as Collateral Manager, any Notes 

held by, or with respect to which discretionary voting rights are held by, the Collateral Manager or its Affiliates will 

have no voting rights with respect to any vote in connection with the removal of the Collateral Manager and will be 

deemed not to be Outstanding in connection with any such vote; provided, however, that any Notes held by, or with 

respect to which discretionary voting rights are held by, the Collateral Manager and its Affiliates or their respective 

employees will have voting rights with respect to all other matters as to which the holders of the Notes are entitled to 

vote, including, without limitation, any vote in connection with a Optional Notes Redemption or the appointment of 

a replacement collateral manager which is not affiliated with the Collateral Manager in accordance with the 

Collateral Management Agreement. See “Risk Factors— Potential Conflicts of Interest— Conflicts of Interest 

Involving the Collateral Manager.” 

Any removal or resignation of the Collateral Manager while any of the Notes are Outstanding will be 

effective upon (i) the appointment by the Issuer at the direction of a Majority-in-Interest of Income Noteholders of 

an institution as replacement collateral manager that is not an Affiliate of the Collateral Manager; provided, 

however, that (a) the Holders of a majority in Aggregate Principal Amount of the Outstanding Notes of each Class 

of Notes do not disapprove of such institution within 30 days of notice of such appointment, (b) such institution is 

legally qualified and has the capacity to act as successor to the Collateral Manager under the Collateral Management 

Agreement in the assumption of all of the responsibilities, duties and obligations of the Collateral Manager under the 

Collateral Management Agreement and under the terms of the Indenture applicable to the Collateral Manager, (c) 

the Rating Condition is satisfied with respect to the appointment of such institution, and (d) the appointment of such 

institution does not require the Issuer, the Co-Issuer or the Trust Estate to register as an investment company under 

the Investment Company Act and (ii) written acceptance of appointment by such successor collateral manager, 

provided that such written acceptance shall include a representation that such successor collateral manager can 

perform the duties of the Collateral Manager without subjecting the Issuer to tax that would not have been imposed 

but for the existence of any present or former connection between such successor collateral manager and the taxing 

jurisdiction. The Issuer will use reasonable efforts to appoint a successor collateral manager to assume the duties 

and obligations of the removed or resigning collateral manager. Except as set forth below, any replacement 

collateral manager must be appointed by the Issuer at the direction of a Majority-in-Interest of Income Noteholders 

and not disapproved by the Holders of a majority in Aggregate Principal Amount of the Outstanding Notes of each 

Class of Notes. 

If no successor collateral manager has been appointed or an instrument of acceptance has not been 

delivered to the resigning or removed Collateral Manager within (x) in the case of a termination for Cause, 60 days 

after the date of the termination notice delivered in accordance with the Collateral Management Agreement or (y) in 

the case of any other termination, the termination date specified in applicable termination notice, the Collateral 

Manager will be entitled to appoint a successor within 60 days thereafter, subject to the requirements set forth in 

clauses (a) through (d) of the preceding paragraph and to the approval of such successor by the Holders of a majority 

in Aggregate Principal Amount of the Outstanding Notes of each Class of Notes, voting separately by Class. In lieu 

thereof, or, if the successor collateral manager appointed by the resigning or removed collateral manager is 

disapproved, the resigning or removed collateral manager may petition any court of competent jurisdiction for the 

appointment of a successor collateral manager, which appointment will not require the consent of, nor be subject to 

the disapproval of, the Issuer or any Noteholder. If no successor collateral manager is in place after 90 days 

following the date specified in clauses (x) or (y), as applicable, the Holders of a majority in Aggregate Principal 

Amount of the Outstanding Notes of the most senior class of Notes then Outstanding will have the right to appoint a 

successor collateral manager. No compensation payable to a successor will be greater than that paid to the 

Collateral Manager without the prior written consent of the holders of a majority in Aggregate Principal Amount of 

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the most senior class of Notes then Outstanding. Upon expiration of the applicable notice period with respect to 

termination specified in the Collateral Management Agreement, and upon acceptance by a successor collateral 

manager of appointment, all authority and power of the Collateral Manager under the Collateral Management 

Agreement and the Indenture, whether with respect to the Trust Estate or otherwise, will automatically and without 

further action by any Person pass to and be vested in the successor collateral manager. 

Conflicts of Interest 

The Collateral Management Agreement generally permits the Collateral Manager to arrange for any of its 

Affiliates to acquire or sell securities, for their own account or for the accounts of the customers of the Collateral 

Manager or its Affiliates, without either requiring or precluding the purchase or sale of such securities for the 

account of the Issuer. The Collateral Manager may, but is not obligated to, aggregate sales and purchase orders with 

respect to Collateral Debt Securities and Eligible Investments with similar orders being made simultaneously for 

other accounts managed by the Collateral Manager or with accounts of the Affiliates of the Collateral Manager, if in 

the Collateral Manager’s reasonable judgment such aggregation shall result in an overall economic benefit to the 

Issuer, taking into consideration any advantageous selling or purchase price or other terms, brokerage commission or 

other expenses. When a transaction occurs as part of any aggregate sales or purchase order, the objective of the 

Collateral Manager (and any of its Affiliates involved in such transactions) will be to allocate the executions among 

the accounts in a manner the Collateral Manager considers equitable considering all of the facts and circumstances. 

Subject to the objective of obtaining best execution, the Collateral Manager may, in the allocation of brokerage 

business, take into consideration research and other brokerage services (as those terms are defined in the Exchange 

Act) furnished to the Collateral Manager by brokers and dealers that are not Affiliates of the Collateral Manager; 

provided, however, that in no circumstance will the Collateral Manager engage in “soft dollars” practices, i.e. cause 

the Issuer to pay more than the lowest available commission in return for such research or other services. Such 

services may be used by the Collateral Manager in connection with its other advisory activities or investment 

operations. See also “Risk Factors— Potential Conflicts of Interest— Conflicts of Interest Involving the Collateral 

Manager.” 

Nothing in the Collateral Management Agreement will prevent the Collateral Manager or any of its 

Affiliates from engaging in other businesses, or from rendering services of any kind to the Issuer, the Trustee, the 

Noteholders or any of their respective Affiliates or any other Person. The Collateral Manager and any of its 

Affiliates will be free, in its or their sole discretion, to make recommendations to others and to effect transactions on 

behalf of itself or for others, which may be the same as or different from those effected with respect to the Collateral 

Debt Securities. In addition, nothing in the Collateral Management Agreement will preclude the Collateral Manager 

or its Affiliates from acting as principal, agent or fiduciary for other clients in connection with securities 

simultaneously held by the Issuer or of the type eligible for investment by the Issuer or limiting any relationships the 

Collateral Manager or any of its Affiliates may have with any obligor of any Collateral Debt Security. Additionally, 

after the Closing Date, the Indenture does not permit the Collateral Manager to acquire Collateral Debt Securities 

and places significant restrictions on the Collateral Manager’s ability to sell Collateral Debt Securities on behalf of 

the Issuer. Accordingly, in certain circumstances, the Collateral Manager may be unable to buy or sell securities or 

take other actions that it might consider to be in the best interest of the Issuer or the holders of the Notes, as a result 

of such restrictions. See also “Risk Factors— Potential Conflicts of Interest— Conflicts of Interest Involving the 

Collateral Manager.” 

Compensation; Expenses 

On each Payment Date, the Issuer will pay, subject to the Priority of Payments, to the Collateral Manager 

as compensation for the services rendered under the Collateral Management Agreement, a fee, payable in arrears on 

each Payment Date in an amount equal to 0.20% per annum (calculated on the basis of a 360-day year consisting of 

twelve 30-day months) of the Quarterly Asset Amount for the related Due Period (such fee, the “Collateral 

Management Fee”). 

If amounts distributable on any Payment Date in accordance with the Priority of Payments are insufficient 

to pay the Collateral Management Fee in full, then a portion of the Collateral Management Fee equal to the shortfall 

will be deferred and will be payable on subsequent Payment Dates on which funds are available therefor according 

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to the Priority of Payments, and interest will accrue thereon at a rate equal to three month LIBOR per annum. Any 

interest due on the amounts so deferred will thereupon constitute accrued and unpaid Collateral Management Fee. 

The Collateral Manager will be responsible for all of its ordinary expenses incurred in the performance of 

its obligations under the Collateral Management Agreement, including the expenses and fees of any third party 

employed by the Collateral Manager in connection with the performance of its duties. Notwithstanding the 

foregoing: (a) the fees and expenses of counsel to the Collateral Manager in connection with the Collateral 

Manager’s entry into the Collateral Management Agreement and the Collateral Administration Agreement will be 

paid by the Issuer; (b) expenses and costs of legal advisers, consultants, rating agencies, accountants, investment 

banking firms and other professionals retained by the Issuer or by the Collateral Manager in connection with 

services provided by the Collateral Manager as described under “Security for the Notes— Exercise of Rights as 

Holder of Collateral Debt Securities; Enforcement of Defaulted Collateral Debt Securities” will be reimbursed by 

the Issuer to the extent funds are available therefor in accordance with the Priority of Payments; and (c) brokerage 

commissions, transfer fees, registration costs, taxes and other similar costs and related expenses and fees arising out 

of transactions effected for the Issuer’s account and the fees and expenses of the Collateral Administrator and other 

Persons providing services to the Issuer and the Co-Issuer in accordance with the terms of the Collateral 

Management Agreement will constitute Administrative Expenses and will be paid by the Issuer to the extent funds 

are available therefor in accordance with the Priority of Payments and will not be payable by the Collateral Manager 

THE COLLATERAL ADMINISTRATION AGREEMENT 

Pursuant to the terms of the Collateral Administration Agreement between the Issuer, the Collateral 

Manager and JPMorgan Chase Bank, National Association, the Issuer will retain JPMorgan Chase Bank, National 

Association, as collateral administrator (the “Collateral Administrator”), to prepare certain reports with respect to 

the Collateral Debt Securities. The compensation paid to the Collateral Administrator by the Issuer for such services 

will be in addition to the fees paid to the Collateral Manager and to JPMorgan Chase Bank, National Association in 

its capacity as Trustee, and will be treated as an expense of the Issuer under the Indenture and will be subject to the 

priorities set forth under “Description of the Notes— Priority of Payments.” 

MATURITY, PREPAYMENT AND YIELD CONSIDERATIONS 

The Stated Maturity Date of each class of Notes is December 1, 2035, however, the Notes will be 

redeemed, if the related Auction is successful, on the Payment Date in December 2015 in connection with a 

Mandatory Auction Call. See “Description of the Notes— Mandatory Auction Call.” In addition, the actual 

maturities of each class of Notes may occur prior to the Stated Maturity Date if and to the extent that an Optional 

Notes Redemption occurs or Redemption Prepayments or Coverage Prepayments are made in accordance with the 

Priority of Payments. Average life refers to the average amount of time that will elapse from the date of delivery of 

a security until each dollar of the principal of such security will be paid to the investor. The average lives and Final 

Maturity Dates of the Notes will be determined by the amount and frequency of principal payments, which will 

depend primarily upon the amount and timing of redemptions of the Collateral Debt Securities. Such redemptions 

of the Collateral Debt Securities will in turn be affected by various factors that are outside the control of the Issuer 

and cannot be predicted. Because all of the Collateral Debt Securities mature before the Stated Maturity Date and all 

of the Collateral Debt Securities may prepay under certain circumstances and because the Notes are subject to 

Optional Notes Redemption, Mandatory Auction Call and, in the case of the Income Notes only, a Clean Up Call, 

the average life of the Class A Notes, the Class B Notes, Class C Notes and the Income Notes may be shorter than 

the number of years until their respective Stated Maturity Dates. Any amounts received in connection with 

Collateral Debt Securities that mature prior to the Stated Maturity Date will be applied in accordance with the 

Priority of Payments. See “Risk Factors— Stated Maturity Date, Average Life and Prepayment Considerations.” 

Any redemption of a Collateral Debt Security may change the composition and characteristics of the 

portfolio of Collateral Debt Securities and the rate of payment thereon, and, accordingly, may affect the actual 

average lives of each class of Notes. 

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Beginning on the Turbo Date, the Class A Notes, Class B Notes or Class C Notes will receive additional 

principal payments (in the order and priority set forth in clause (a)(xiii) of the Priority of Payments) from 60% of the 

amount of Interest Collections (if any) that would otherwise be available for payments on the Income Notes. Such 

additional principal payments (if any) would cause the actual maturity of the Class A Notes, Class B Notes or Class 

C Notes to occur earlier than it would in the absence of such additional payments. 

Payments of interest on the Class A-1 Notes will be subordinate to payments of certain expenses of the Co- 

Issuers, including certain fees and expenses of the Trustee, the Collateral Administrator and Collateral Manager and 

amounts (other than certain termination payments) due to each Hedge Counterparty. Payments of principal of the 

Class A-1 Notes will be subordinate to payments of certain expenses of the Co-Issuers, including certain fees and 

expenses of the Trustee, the Collateral Administrator and Collateral Manager and amounts (other than certain 

termination payments) due to each Hedge Counterparty, and to payments of interest on the Class A-2 Notes and the 

Class B Notes. The amount and frequency of distributions of available funds to Holders of the Class A-1 Notes in 

payment of principal, and therefore the yield to such Holders, will depend on, among other things, the abovementioned 

priority of payments, as well as the rates of interest on the Eligible Investments acquired by the Issuer 

after the Closing Date, the extent to which Collateral Debt Securities pledged to secure the Notes become Defaulted 

Securities or are retired prior to the Stated Maturity Date of the Notes, the level and timing of recoveries on 

Collateral Debt Securities that do become Defaulted Securities, whether Coverage Prepayments are made or an 

Optional Notes Redemption or a Mandatory Auction Call occurs, the effect of turbo payments on and after the 

Turbo Date and various other factors. 

Payments of interest of the Class A-2 Notes will be subordinate to certain expenses of the Co-Issuers, 

including certain fees and expenses of the Trustee, the Collateral Administrator and Collateral Manager and amounts 

(other than certain termination payments) due to each Hedge Counterparty, and to payments of interest on the Class 

A-1 Notes. Payments of principal of the Class A-2 Notes will be subordinate to certain expenses of the Co-Issuers, 


(other than certain termination payments) due to each Hedge Counterparty, and to payments of interest and principal 

on the Class A-1 Notes and to payments of interest on the Class B Notes. The amount and frequency of distributions 

of available funds to Holders of the Class A-2 Notes in payment of principal, and therefore the yield to such 

Holders, will depend on, among other things, the above-mentioned priority of payments, as well as the rates of 

interest on the Eligible Investments acquired by the Issuer after the Closing Date, the extent to which Collateral Debt 

Securities pledged to secure the Notes become Defaulted Securities or are retired prior to the Stated Maturity Date 

of the Notes, the level and timing of recoveries on Collateral Debt Securities that do become Defaulted Securities, 

whether Coverage Prepayments are made or an Optional Notes Redemption or a Mandatory Auction Call occurs, the 

effect of turbo payments on and after the Turbo Date and various other factors. 

Payments of interest of the Class B Notes will be subordinate to certain expenses of the Co-Issuers, 


(other than certain termination payments) due to each Hedge Counterparty, and to payments of interest on the Class 

A Notes. Payments of principal of the Class B Notes will be subordinate to certain expenses of the Co-Issuers, 


(other than certain termination payments) due to each Hedge Counterparty, and to payments of interest and principal 

on the Class A Notes. The amount and frequency of distributions of available funds to Holders of the Class B Notes 

in payment of principal, and therefore the yield to such Holders, will depend on, among other things, the abovementioned 

priority payments, as well as the rates of interest on the Eligible Investments acquired by the Issuer after 

the Closing Date, the extent to which Collateral Debt Securities pledged to secure the Notes become Defaulted 

Securities or are retired prior to the Stated Maturity Dates of the Notes, the level and timing of recoveries on 


Optional Notes Redemption or a Mandatory Auction Call occurs, the effect of turbo payments on and after the 

Turbo Date and various other factors. 

Payments of interest on the Class C-1 Notes and the Class C-2 Notes will be subordinate to certain 

expenses of the Co-Issuers, including certain fees and expenses of the Trustee, the Collateral Administrator and 

Collateral Manager and amounts (other than certain termination payments) due to each Hedge Counterparty, and to 

payments of interest on the Class A Notes and the Class B Notes. Payments of principal of the Class C-1 Notes and 

the Class C-2 Notes will be subordinate to certain expenses of the Co-Issuers, including certain fees and expenses of 

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the Trustee, the Collateral Administrator and Collateral Manager and amounts (other than certain termination 

payments) due to each Hedge Counterparty, and to payments of interest and principal on the Class A Notes and the 

Class B Notes. The amount and frequency of distributions of available funds to Holders of the Class C-1 Notes and 

Class C-2 Notes, and therefore the yield to such Holders, will depend on, among other things, the above-mentioned 

priority of payments, as well as the rates of interest on the Eligible Investments acquired by the Issuer after the 

Closing Date, the extent to which Collateral Debt Securities pledged to secure the Notes become Defaulted 

Securities or are retired prior to the Stated Maturity Dates of the Notes, the level and timing of recoveries on 


Optional Notes Redemption or a Mandatory Auction Call occurs, whether Periodic Interest on the Class C-1 Notes 

and Class C-2 Notes is paid each Payment Date or becomes Class C-1 Note Deferred Interest and Class C-2 Note 

Deferred Interest, respectively (and is consequently added to the Aggregate Principal Amount of the Class C-1 

Notes or Class C-2 Notes, respectively), the effect of turbo payments on and after the Turbo Date and various other 

factors. 

The Income Notes are subordinated to the Class A-1 Notes, Class A-2 Notes, Class B Notes, Class C-1 

Notes and Class C-2 Notes and to the payments of certain expenses of the Co-Issuers, including fees and expenses 

of the Trustee, the Collateral Administrator and Collateral Manager and amounts due to each Hedge Counterparty. 

In addition, the aggregate principal amount of the Collateral Debt Securities will initially be less than the Aggregate 

Principal Amount of the Notes. The amount and frequency of distributions of available funds to Holders of Income 

Notes, and therefore the return to such Holders, will depend on, among other things, the above-mentioned priority of 

payments, as well as the rates of interest on the Eligible Investments acquired by the Issuer after the Closing Date, 

the extent to which Collateral Debt Securities pledged to secure the Notes become Defaulted Securities or are retired 

prior to the Stated Maturity Dates of the Notes, the level and timing of recoveries on Collateral Debt Securities that 

do become Defaulted Securities, whether an Optional Notes Redemption or Mandatory Auction Call occurs, the 

effect of turbo payments to the Class A Notes, the Class B Notes and the Class C Notes on and after the Turbo Date, 

the prevailing levels of interest rates during the term of the Income Notes, and various other factors. The yield on 

the Income Notes may be highly sensitive to such factors, all of which are impossible to predict accurately. The 

Income Notes represent a leveraged subordinated investment in illiquid securities, and investors in the 

Income Notes bear a high risk of losing all or part of their investment. 

TRANSFER RESTRICTIONS 

The Notes have not been registered under the Securities Act or any state securities or “Blue Sky” laws or 

the securities laws of any other jurisdiction and, accordingly, may not be reoffered, resold, pledged or otherwise 

transferred except in accordance with the restrictions set forth in the Indenture and described under “Notice to 

Purchasers” and above. 

Certificated Notes 

Each purchaser or other transferee (a “Transferee”) of a Certificated Note will be required to agree to the 

following, to the extent applicable to the Class of Notes purchased by or transferred to it, and it will be required to 

deliver a certificate or investment letter to such effect: 

1. Any Class A Note, Class B Note or Class C Note held by an institutional “accredited investor” (as 

defined in clause (1), (2), (3) or (7) of Rule 501(a) of Regulation D under the Securities Act) that is not a Qualified 

Institutional Buyer will be in the form of a Certificated Note. All Income Notes will be in the form of Certificated 

Notes. 

2. Each Transferee of (a) Income Notes or (b) Class A Notes, Class B Notes or Class C Notes that 

are held in certificated form will be required to make certain representations, including, in the case of such Notes 

acquired in the United States or by U.S. Persons, that (1) the Transferee and each account for which the Transferee 

is acquiring the Notes is a Qualified Purchaser, (2) the Transferee (or, if it is acquiring Notes for any account, each 

such account) is acquiring the Notes as principal for its own account for investment and not for sale in connection 

with any distribution thereof, (3) neither the Transferee nor any such account (i) was formed, reformed or 

recapitalized for the specific purpose of investing in the Notes or other securities of the Issuer or the Co-Issuers, as 

109

applicable (unless all beneficial owners of such Transferee are Qualified Purchasers), (ii) if formed on or before 

April 30, 1996, is an investment company that relies on the exclusion from the definition of “investment company” 

provided by Section 3(c)(1) or Section 3(c)(7) of the Investment Company Act (or a foreign investment company 

under Section 7(d) thereof relying on Section 3(c)(1) or Section 3(c)(7) with respect to those of its holders that are 

U.S. Persons), unless, with respect to its treatment as a Qualified Purchaser, it has, in the manner required by Section 

2(a)(51)(C) of the Investment Company Act and the rules and regulations thereunder, received the consent of those 

of its beneficial owners that acquired their interests on or before April 30, 1996, (iii) in the case of a Qualified 

Institutional Buyer, is a broker-dealer that owns and invests on a discretionary basis less than U.S.$25,000,000 in 

securities of unaffiliated issuers, (iv) in the case of a Qualified Institutional Buyer, is a participant-directed employee 

plan, such as a 401(k) plan, or trust underlying such plan (i.e. a plan referred to in paragraph (a)(1)(i)(D) or 

(a)(1)(i)(E) of Rule 144A, or a trust fund referred to in paragraph (a)(1)(i)(F) of Rule 144A that holds the assets of 

such plan), unless the investment decisions with respect to such plan are made solely by the fiduciary, trustee or 

sponsor of such plan, (v) is a corporation, partnership, common trust fund, special trust, pension, profit sharing or 

other retirement trust fund or plan in which the shareholders, equity owners, partners, beneficiaries, beneficial 

owners or participants, as applicable, may designate the particular investments to be made or the allocation of any 

investment among such shareholders, equity owners, partners, beneficiaries, beneficial owners or participants, as 

applicable, or (vi) is an entity that, immediately subsequent to its purchase or other acquisition of a beneficial 

interest in the Notes, will have invested more than 40% of its assets in beneficial interests in the Notes and/or in 

other securities of the Issuer or the Co-Issuers, as applicable (unless all of the beneficial owners of such entity’s 

securities are Qualified Purchasers) and (4) the Transferee and each such account (i) agree to provide notice to any 

subsequent transferee of the transfer restrictions relating to the Notes, (ii) shall purchase, hold and transfer the Notes 

in at least the minimum denomination of U.S.$250,000, in the case of the Class A Notes, Class B Notes or Class C 

Notes, or U.S.$100,000, in the case of the Income Notes, and (iii) understand and agree that any purported transfer 

of the Notes to a purchaser that does not comply with the requirements of this paragraph shall be null and void ab 

initio. 

3. No transfer of an Income Note will be effective, and the Trustee will not recognize any such 

transfer, if it may result in 25% or more of the Aggregate Principal Amount of the Income Notes being held by 

Benefit Plan Investors. For purposes of this determination, Income Notes held by persons that have represented that 

they are Controlling Persons (other than Benefit Plan Investors) shall be disregarded and shall not be treated as 

outstanding. See “Certain ERISA Considerations.” In addition, the transfer of a beneficial interest in any Note to 

any Person whose representations in the ERISA-related provisions in any representation letter or certificate required 

to be delivered by such Person are untrue shall be null and void ab initio, and the Issuer maintains the right to cause 

the resale of any such interest, in accordance with and subject to the terms of the Indenture. 

Each purchaser or other transferee of (a) Income Notes or (b) Class A Notes, Class B Notes or Class C 

Notes that are held in certificated form will be required to represent that on each day from the date on which such 

beneficial owner acquires its interest in such Note through and including the date on which such beneficial owner 

disposes of its interest in such Note, either (A) such owner is not a Plan, an entity whose underlying assets include 

assets of any Plan by reason of Department of Labor regulation Section 2510.3-101 or otherwise, or a governmental 

or other plan that is subject to any Similar Law, or (B) (1) such beneficial owner’s purchase, holding and disposition 

of such Class A Note, Class B Note or Class C Note will satisfy the requirements for exemption under Prohibited 

Transaction Class Exemption (“PTCE”) 84-14, PTCE 90-1, PTCE 91-38, PTCE 95-60, PTCE 96-23 or a similar 

exemption, or in the case of a plan subject to Similar Law, will not result in a nonexempt violation of such Similar 

Law or (2) such beneficial owner’s purchase, holding and disposition of such Income Note will not result in a 

prohibited transaction under Section 406 of ERISA or Section 4975 of the Code (or, in the case of a plan subject to 

Similar Law, under such Similar Law) for which an exemption, all conditions of which are satisfied, is not available. 

4. Unless determined otherwise by the Issuer in accordance with applicable law, the Class A Notes, 

Class B Notes and Class C Notes issued in the form of Certificated Notes will bear the legend set forth below: 

THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES 

SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), ANY STATE SECURITIES 

LAWS IN THE UNITED STATES OR THE SECURITIES LAWS OF ANY OTHER JURISDICTION 

AND THE CO-ISSUERS HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES 

INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE “INVESTMENT COMPANY ACT”), 

110

IN RELIANCE ON EXCEPTIONS FROM THE INVESTMENT COMPANY ACT, INCLUDING, IN 

THE CASE OF THE ISSUER, THE EXCLUSION FROM THE DEFINITION OF “INVESTMENT 

COMPANY” PROVIDED BY SECTION 3(c)(7) OF THE INVESTMENT COMPANY ACT AND THE 

RULES AND REGULATIONS THEREUNDER. THE HOLDER HEREOF, BY ITS ACCEPTANCE OF 

THIS NOTE, REPRESENTS THAT IT HAS OBTAINED THIS NOTE IN A TRANSACTION EXEMPT 

FROM, OR NOT REQUIRING REGISTRATION UNDER, THE SECURITIES ACT AND IN 

COMPLIANCE WITH ALL OTHER APPLICABLE LAWS OF THE UNITED STATES OR ANY 

OTHER JURISDICTION (INCLUDING THE INVESTMENT COMPANY ACT), AND THE 

RESTRICTIONS ON SALE AND TRANSFER SET FORTH IN THE INDENTURE. THE HOLDER 

HEREOF, BY ITS ACCEPTANCE OF THIS NOTE, FURTHER REPRESENTS, ACKNOWLEDGES 

AND AGREES THAT IT WILL NOT REOFFER, RESELL, PLEDGE OR OTHERWISE TRANSFER 

THIS NOTE (OR ANY INTEREST HEREIN) EXCEPT (I) IN COMPLIANCE WITH THE SECURITIES 

ACT, THE INVESTMENT COMPANY ACT AND ALL OTHER APPLICABLE LAWS OF ANY 

JURISDICTION AND IN ACCORDANCE WITH THE CERTIFICATIONS AND OTHER 

REQUIREMENTS SPECIFIED IN THE INDENTURE, (II) TO (a) A TRANSFEREE THAT (1) IS A 

“QUALIFIED PURCHASER” (AS DEFINED IN SECTION 2(a)(51)(A) OF THE INVESTMENT 

COMPANY ACT AND THE RULES AND REGULATIONS THEREUNDER) (A “QUALIFIED 

PURCHASER”) PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A 

QUALIFIED PURCHASER, (2) (i) WAS NOT FORMED, REFORMED OR RECAPITALIZED FOR 

THE SPECIFIC PURPOSE OF INVESTING IN SECURITIES OF EITHER OF THE CO-ISSUERS 

(EXCEPT WHEN EACH BENEFICIAL OWNER OF THE TRANSFEREE IS A QUALIFIED 

PURCHASER), (ii) IF FORMED ON OR BEFORE APRIL 30, 1996, IS NOT AN INVESTMENT 

COMPANY THAT RELIES ON THE EXCLUSION FROM THE DEFINITION OF “INVESTMENT 

COMPANY” PROVIDED BY SECTION 3(c)(1) OR SECTION 3(c)(7) OF THE INVESTMENT 

COMPANY ACT (OR A FOREIGN INVESTMENT COMPANY UNDER SECTION 7(d) THEREOF 

RELYING ON SECTION 3(c)(1) OR SECTION 3(c)(7) WITH RESPECT TO THOSE OF ITS 

HOLDERS THAT ARE U.S. PERSONS), UNLESS, WITH RESPECT TO ITS TREATMENT AS A 

QUALIFIED PURCHASER, IT HAS, IN THE MANNER REQUIRED BY SECTION 2(a)(51)(C) OF 

THE INVESTMENT COMPANY ACT AND THE RULES AND REGULATIONS THEREUNDER, 

RECEIVED THE CONSENT OF THOSE OF ITS BENEFICIAL OWNERS THAT ACQUIRED THEIR 

INTERESTS ON OR BEFORE APRIL 30, 1996, (iii) IN THE CASE OF A QUALIFIED 

INSTITUTIONAL BUYER (AS DEFINED HEREIN), IS NOT A BROKER-DEALER THAT OWNS 

AND INVESTS ON A DISCRETIONARY BASIS LESS THAN U.S.$25,000,000 IN SECURITIES OF 

UNAFFILIATED ISSUERS, (iv) IN THE CASE OF A QUALIFIED INSTITUTIONAL BUYER, IS NOT 

A PARTICIPANT-DIRECTED EMPLOYEE PLAN, SUCH AS A 401(k) PLAN, OR TRUST 

UNDERLYING SUCH PLAN (I.E. A PLAN REFERRED TO IN PARAGRAPH (A)(1)(I)(D) OR 

(A)(1)(I)(E) OF RULE 144A, OR A TRUST FUND REFERRED TO IN PARAGRAPH (A)(1)(I)(F) OF 

RULE 144A THAT HOLDS THE ASSETS OF SUCH PLAN), UNLESS THE INVESTMENT 

DECISIONS WITH RESPECT TO SUCH PLAN ARE MADE SOLELY BY THE FIDUCIARY, 

TRUSTEE OR SPONSOR OF SUCH PLAN, (v) IS NOT A CORPORATION, PARTNERSHIP, 

COMMON TRUST FUND, SPECIAL TRUST, PENSION, PROFIT SHARING OR OTHER 

RETIREMENT TRUST FUND OR PLAN IN WHICH THE SHAREHOLDERS, EQUITY OWNERS, 

PARTNERS, BENEFICIARIES, BENEFICIAL OWNERS OR PARTICIPANTS, AS APPLICABLE, 

MAY DESIGNATE THE PARTICULAR INVESTMENTS TO BE MADE OR THE ALLOCATION OF 

ANY INVESTMENT AMONG SUCH SHAREHOLDERS, EQUITY OWNERS, PARTNERS, 

BENEFICIARIES, BENEFICIAL OWNERS OR PARTICIPANTS, AS APPLICABLE, (vi) IS NOT AN 

ENTITY THAT, IMMEDIATELY SUBSEQUENT TO ITS PURCHASE OR OTHER ACQUISITION OF 

A BENEFICIAL INTEREST IN THIS NOTE, WILL HAVE INVESTED MORE THAN 40% OF ITS 

ASSETS IN BENEFICIAL INTERESTS IN THE NOTES OF THIS CLASS AND/OR IN OTHER 

SECURITIES OF THE CO-ISSUERS (UNLESS ALL OF THE BENEFICIAL OWNERS OF SUCH 

ENTITY’S SECURITIES ARE QUALIFIED PURCHASERS) AND (vii) AGREES TO PROVIDE 

NOTICE TO ANY SUBSEQUENT TRANSFEREE OF THE TRANSFER RESTRICTIONS PROVIDED 

IN THIS LEGEND AND (3) (i) IS A PERSON THAT THE SELLER REASONABLY BELIEVES IS A 

“QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES 

ACT (A “QUALIFIED INSTITUTIONAL BUYER”) PURCHASING FOR ITS OWN ACCOUNT OR 

FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 

111

144A UNDER THE SECURITIES ACT OR (ii) IS AN INSTITUTIONAL “ACCREDITED INVESTOR” 

AS DEFINED IN CLAUSE (1), (2), (3) or (7) OF RULE 501(a) OF REGULATION D UNDER THE 

SECURITIES ACT (PROVIDED THAT IN THE CASE OF ANY TRANSFER PURSUANT TO THIS 

SUBCLAUSE (ii) AND IF REQUESTED BY THE TRUSTEE, THE TRANSFEROR OR THE 

TRANSFEREE HAS PROVIDED AN OPINION OF COUNSEL TO EACH OF THE TRUSTEE AND 

THE ISSUER THAT SUCH TRANSFER MAY BE MADE PURSUANT TO AN EXEMPTION FROM 

REGISTRATION UNDER THE SECURITIES ACT) OR (b) A TRANSFEREE (1) THAT (x) IS NOT A 

U.S. PERSON (AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT) AND (y) IS 

ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 903 

OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT AND (2) THAT IS NOT A U.S. 

RESIDENT WITHIN THE MEANING OF THE INVESTMENT COMPANY ACT AND (III) IN THE 

CASE OF BOTH CLAUSE (II)(a) AND (II)(b) ABOVE, IN AUTHORIZED MINIMUM 

DENOMINATIONS OF U.S.$250,000 FOR THE TRANSFEREE AND FOR EACH ACCOUNT FOR 

WHICH IT IS ACTING. EACH PURCHASER AND TRANSFEREE WILL BE REQUIRED TO 

DELIVER A REPRESENTATION LETTER IN A FORM PRESCRIBED IN THE INDENTURE. 

FURTHER, NO SALE OR TRANSFER OF THIS NOTE MAY BE MADE TO AN EMPLOYEE 

BENEFIT PLAN OR OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE UNITED 

STATES EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), 

OR SECTION 4975 OF THE UNITED STATES INTERNAL REVENUE CODE OF 1986, AS 

AMENDED, (OR SUBSTANTIALLY SIMILAR APPLICABLE FEDERAL, STATE OR LOCAL LAW) 

OR A PERSON INVESTING ASSETS OF SUCH A PLAN UNLESS SUCH SALE OR TRANSFER 

WILL SATISFY THE REQUIREMENTS FOR RELIEF UNDER PROHIBITED TRANSACTION 

CLASS EXEMPTION 84-14, 90-1, 91-38, 95-60, 96-23 OR A SIMILAR EXEMPTION OR, IN THE 

CASE OF A PLAN SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW THAT IS 

SUBSTANTIALLY SIMILAR TO THE PROVISIONS OF SECTION 406 OF ERISA OR SECTION 

4975 OF THE CODE (“SIMILAR LAW”), WILL NOT RESULT IN A NONEXEMPT VIOLATION OF 

SUCH SIMILAR LAW. TRANSFERS OF THE NOTES MUST GENERALLY BE ACCOMPANIED BY 

APPROPRIATE TAX AND ERISA TRANSFER DOCUMENTATION AND ARE SUBJECT TO 

RESTRICTIONS AS PROVIDED IN THE INDENTURE. 

THIS NOTE IS NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE RESTRICTIONS 

DESCRIBED HEREIN AND IN THE INDENTURE. ANY SALE OR TRANSFER IN VIOLATION OF 

THE FOREGOING WILL BE OF NO FORCE AND EFFECT, WILL BE VOID AB INITIO, AND WILL 

NOT OPERATE TO TRANSFER ANY RIGHTS TO THE TRANSFEREE. EACH TRANSFEROR OF 

THIS NOTE AGREES TO PROVIDE NOTICE OF THE TRANSFER RESTRICTIONS SET FORTH 

HEREIN AND IN THE INDENTURE TO THE TRANSFEREE. IN ADDITION TO THE FOREGOING, 

THE ISSUER MAINTAINS THE RIGHT TO CAUSE THE RESALE, IN ACCORDANCE WITH AND 

SUBJECT TO THE TERMS OF THE INDENTURE, OF ANY INTEREST IN THIS NOTE 

PREVIOUSLY TRANSFERRED TO EITHER (i) A U.S. PERSON THAT BECOMES THE 

BENEFICIAL OWNER OF ANY GLOBAL NOTE, IF THAT PERSON HAS BEEN DETERMINED 

NOT TO HAVE BEEN, AT THE TIME IT ACQUIRED ITS BENEFICIAL INTEREST IN SUCH 

GLOBAL NOTE, BOTH A QUALIFIED INSTITUTIONAL BUYER AND A QUALIFIED 

PURCHASER OR (ii) A PERSON FOR WHICH THE REPRESENTATIONS MADE BY SUCH 

PERSON IN THE ERISA SECTION IN ANY REPRESENTATION LETTER OR CERTIFICATE 

REQUIRED TO BE DELIVERED BY SUCH PERSON ARE UNTRUE. 

5. Unless determined otherwise by the Issuer in accordance with applicable law, the Income Notes 

will bear the legend set forth below: 








112


RULES AND REGULATIONS THEREUNDER. THE HOLDER HEREOF, BY ITS ACCEPTANCE OF 

THIS NOTE, REPRESENTS THAT IT HAS OBTAINED THIS NOTE IN A TRANSACTION EXEMPT 

FROM, OR NOT REQUIRING REGISTRATION UNDER, THE SECURITIES ACT AND IN 

COMPLIANCE WITH ALL OTHER APPLICABLE LAWS OF THE UNITED STATES OR ANY 

OTHER JURISDICTION (INCLUDING THE INVESTMENT COMPANY ACT), AND THE 

RESTRICTIONS ON SALE AND TRANSFER SET FORTH IN THE INDENTURE. THE HOLDER 

HEREOF, BY ITS ACCEPTANCE OF THIS NOTE, FURTHER REPRESENTS, ACKNOWLEDGES 

AND AGREES THAT IT WILL NOT REOFFER, RESELL, PLEDGE OR OTHERWISE TRANSFER 

THIS NOTE (OR ANY INTEREST HEREIN) EXCEPT (I) IN COMPLIANCE WITH THE SECURITIES 

ACT, THE INVESTMENT COMPANY ACT AND ALL OTHER APPLICABLE LAWS OF ANY 

JURISDICTION AND IN ACCORDANCE WITH THE CERTIFICATIONS AND OTHER 

REQUIREMENTS SPECIFIED IN THE INDENTURE, (II) TO (a) A TRANSFEREE THAT (1) IS A 




QUALIFIED PURCHASER, (2) (i) WAS NOT FORMED, REFORMED OR RECAPITALIZED FOR 

THE SPECIFIC PURPOSE OF INVESTING IN SECURITIES OF THE ISSUER (EXCEPT WHEN 

EACH BENEFICIAL OWNER OF THE TRANSFEREE IS A QUALIFIED PURCHASER), (ii) IF 

FORMED ON OR BEFORE APRIL 30, 1996, IS NOT AN INVESTMENT COMPANY THAT RELIES 

ON THE EXCLUSION FROM THE DEFINITION OF “INVESTMENT COMPANY” PROVIDED BY 

SECTION 3(c)(1) OR SECTION 3(c)(7) OF THE INVESTMENT COMPANY ACT (OR A FOREIGN 

INVESTMENT COMPANY UNDER SECTION 7(d) THEREOF RELYING ON SECTION 3(c)(1) OR 

SECTION 3(c)(7) WITH RESPECT TO THOSE OF ITS HOLDERS THAT ARE U.S. PERSONS), 

UNLESS, WITH RESPECT TO ITS TREATMENT AS A QUALIFIED PURCHASER, IT HAS, IN THE 

MANNER REQUIRED BY SECTION 2(a)(51)(C) OF THE INVESTMENT COMPANY ACT AND THE 

RULES AND REGULATIONS THEREUNDER, RECEIVED THE CONSENT OF THOSE OF ITS 

BENEFICIAL OWNERS THAT ACQUIRED THEIR INTERESTS ON OR BEFORE APRIL 30, 1996, 

(iii) IN THE CASE OF A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED HEREIN), IS NOT A 

BROKER-DEALER THAT OWNS AND INVESTS ON A DISCRETIONARY BASIS LESS THAN 

U.S.$25,000,000 IN SECURITIES OF UNAFFILIATED ISSUERS, (iv) IN THE CASE OF A 

QUALIFIED INSTITUTIONAL BUYER, IS NOT A PARTICIPANT-DIRECTED EMPLOYEE PLAN, 

SUCH AS A 401(k) PLAN, OR TRUST UNDERLYING SUCH PLAN (I.E. A PLAN REFERRED TO IN 

PARAGRAPH (A)(1)(I)(D) OR (A)(1)(I)(E) OF RULE 144A, OR A TRUST FUND REFERRED TO IN 

PARAGRAPH (A)(1)(I)(F) OF RULE 144A THAT HOLDS THE ASSETS OF SUCH PLAN), UNLESS 

THE INVESTMENT DECISIONS WITH RESPECT TO SUCH PLAN ARE MADE SOLELY BY THE 

FIDUCIARY, TRUSTEE OR SPONSOR OF SUCH PLAN, (v) IS NOT A CORPORATION, 

PARTNERSHIP, COMMON TRUST FUND, SPECIAL TRUST, PENSION, PROFIT SHARING OR 

OTHER RETIREMENT TRUST FUND OR PLAN IN WHICH THE SHAREHOLDERS, EQUITY 

OWNERS, PARTNERS, BENEFICIARIES, BENEFICIAL OWNERS OR PARTICIPANTS, AS 

APPLICABLE, MAY DESIGNATE THE PARTICULAR INVESTMENTS TO BE MADE OR THE 

ALLOCATION OF ANY INVESTMENT AMONG SUCH SHAREHOLDERS, EQUITY OWNERS, 

PARTNERS, BENEFICIARIES, BENEFICIAL OWNERS OR PARTICIPANTS, AS APPLICABLE, (vi) 

IS NOT AN ENTITY THAT, IMMEDIATELY SUBSEQUENT TO ITS PURCHASE OR OTHER 

ACQUISITION OF A BENEFICIAL INTEREST IN THIS NOTE, WILL HAVE INVESTED MORE 

THAN 40% OF ITS ASSETS IN BENEFICIAL INTERESTS IN THIS NOTE AND/OR IN OTHER 

SECURITIES OF THE ISSUER (UNLESS ALL OF THE BENEFICIAL OWNERS OF SUCH ENTITY’S 

SECURITIES ARE QUALIFIED PURCHASERS) AND (vii) AGREES TO PROVIDE NOTICE TO ANY 

SUBSEQUENT TRANSFEREE OF THE TRANSFER RESTRICTIONS PROVIDED IN THIS LEGEND 

AND (3) (i) IS A PERSON THAT THE SELLER REASONABLY BELIEVES IS A “QUALIFIED 

INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT (A 

“QUALIFIED INSTITUTIONAL BUYER”) PURCHASING FOR ITS OWN ACCOUNT OR FOR THE 

ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A 

UNDER THE SECURITIES ACT OR (ii) IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 

501(a) OF REGULATION D UNDER THE SECURITIES ACT (PROVIDED THAT IN THE CASE OF 

ANY TRANSFER PURSUANT TO THIS SUBCLAUSE (ii) AND IF REQUESTED BY THE TRUSTEE, 

113

Global Notes 

THE TRANSFEROR OR THE TRANSFEREE HAS PROVIDED AN OPINION OF COUNSEL TO 

EACH OF THE TRUSTEE AND THE ISSUER THAT SUCH TRANSFER MAY BE MADE 

PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT) OR (b) 

A TRANSFEREE (1) THAT (x) IS NOT A U.S. PERSON (AS DEFINED IN REGULATION S UNDER 

THE SECURITIES ACT) AND (y) IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION 

IN COMPLIANCE WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES 

ACT AND (2) THAT IS NOT A U.S. RESIDENT WITHIN THE MEANING OF THE INVESTMENT 

COMPANY ACT AND (III) IN THE CASE OF BOTH CLAUSE II(a) AND II(b) ABOVE, EXCEPT AS 

OTHERWISE PROVIDED IN THE INDENTURE, IN AUTHORIZED MINIMUM DENOMINATIONS 

OF U.S.$100,000 FOR THE TRANSFEREE AND FOR EACH ACCOUNT FOR WHICH IT IS ACTING. 

EACH PURCHASER AND TRANSFEREE WILL BE REQUIRED TO DELIVER A 

REPRESENTATION LETTER IN A FORM PRESCRIBED IN THE INDENTURE. FURTHER, NO 

SALE OR TRANSFER OF THIS NOTE MAY BE MADE UNLESS SUCH SALE OR TRANSFER WILL 

NOT (A) RESULT IN THE ASSETS OF THE ISSUER CONSTITUTING “PLAN ASSETS” WITHIN 

THE MEANING OF THE UNITED STATES EMPLOYEE RETIREMENT INCOME SECURITY ACT 

OF 1974, AS AMENDED (“ERISA”), OR (B) CONSTITUTE OR RESULT IN A NON-EXEMPT 

PROHIBITED TRANSACTION UNDER ERISA OR SECTION 4975 OF THE UNITED STATES 

INTERNAL REVENUE CODE OF 1986, AS AMENDED (OR SUBSTANTIALLY SIMILAR 

FEDERAL, STATE OR LOCAL LAW). TRANSFERS OF THE NOTES MUST GENERALLY BE 

ACCOMPANIED BY APPROPRIATE TAX AND ERISA TRANSFER DOCUMENTATION AND ARE 

SUBJECT TO RESTRICTIONS AS PROVIDED IN THE INDENTURE. THIS NOTE MAY BE 

BENEFICIALLY OWNED ONLY BY PERSONS THAT CAN CONTINUE TO MAKE, ON EACH DAY 

SUCH BENEFICIAL OWNER OWNS THIS NOTE, THE REPRESENTATIONS WITH RESPECT TO 

ERISA AND RELATED MATTERS SET FORTH IN THE REPRESENTATION LETTER DELIVERED 

UPON PURCHASE. 

THIS NOTE IS NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE RESTRICTIONS 

DESCRIBED HEREIN AND IN THE INDENTURE. ANY SALE OR TRANSFER IN VIOLATION OF 

THE FOREGOING WILL BE OF NO FORCE AND EFFECT, WILL BE VOID AB INITIO, AND WILL 

NOT OPERATE TO TRANSFER ANY RIGHTS TO THE TRANSFEREE. EACH TRANSFEROR OF 

THIS NOTE AGREES TO PROVIDE NOTICE OF THE TRANSFER RESTRICTIONS SET FORTH 

HEREIN AND IN THE INDENTURE TO THE TRANSFEREE. IN ADDITION TO THE FOREGOING, 

THE ISSUER MAINTAINS THE RIGHT TO CAUSE THE RESALE, IN ACCORDANCE WITH AND 

SUBJECT TO THE TERMS OF THE INDENTURE, OF ANY INTEREST IN THIS NOTE 

PREVIOUSLY TRANSFERRED TO A PERSON FOR WHICH THE REPRESENTATIONS MADE BY 

SUCH PERSON IN THE ERISA SECTION IN ANY REPRESENTATION LETTER OR CERTIFICATE 

REQUIRED TO BE DELIVERED BY SUCH PERSON ARE UNTRUE. 

Each person that becomes a beneficial owner of Notes represented by an interest in a Global Note (or any 

Physical Note issued in exchange for Global Notes as described above under “Description of the Notes— Form, 

Denomination and Registration”) will be deemed to have represented and agreed as follows: 

(i) In connection with the purchase of the Class A Notes, Class B Notes and Class C Notes: (A) none 

of the Co-Issuers, the Initial Purchasers, the Placement Agents or the Collateral Manager is acting as a fiduciary or 

financial or investment adviser for such beneficial owner; (B) such beneficial owner is not relying (for purposes of 

making any investment decision or otherwise) upon any advice, counsel or representations (whether written or oral) 

of the Co-Issuers, the Initial Purchasers, the Placement Agents or the Collateral Manager other than any statements 

in a current offering circular for such Notes; (C) such beneficial owner has consulted with its own legal, regulatory, 

tax, business, investment, financial and accounting advisers to the extent it has deemed necessary and has made its 

own investment decisions (including decisions regarding the suitability of any transaction pursuant to the Indenture) 

based upon its own judgment and upon any advice from such advisers as it has deemed necessary and not upon any 

view expressed by the Co-Issuers, the Initial Purchasers, the Placement Agents or the Collateral Manager; (D) such 

beneficial owner (1) in the case of an interest in a Rule 144A Global Note, is a Qualified Institutional Buyer and a 

Qualified Purchaser or (2) in the case of an interest in a Temporary Regulation S Global Note or a Regulation S 

114

Global Note, (a) is neither a “U.S. Person” as defined in Regulation S or within the interpretations under the 

Investment Company Act, nor a person that is acquiring its interest within the United States and (b) is acquiring the 

Notes in reliance on the exemption from registration provided by Regulation S; and (E) such beneficial owner will 

hold and transfer at least the minimum denomination of such Notes and provide notice of the relevant transfer 

restrictions to subsequent transferees. 

(ii) On each day from the date on which such beneficial owner acquires its interest in such Note 

through and including the date on which such beneficial owner disposes of its interest in such Note, either (A) such 

beneficial owner is not a Plan, an entity whose underlying assets include the assets of any Plan by reason of 

Department of Labor regulation Section 2510.3-101 or otherwise, or a governmental or other plan that is subject to 

any Similar Law or (B) such beneficial owner’s purchase, holding and disposition of such Class A Note, Class B 

Note or Class C Note will satisfy the requirements for exemption under Prohibited Transaction Class Exemption 

(“PTCE”) 84-14, PTCE 90-1, PTCE 91-38, PTCE 95-60, PTCE 96-23 or a similar exemption, or in the case of a 

plan subject to Similar Law, will not result in a nonexempt violation of such Similar Law. 

(iii) Such beneficial owner understands that the Notes are being offered only in a transaction not 

involving any public offering in the United States within the meaning of the Securities Act, the Notes have not been 

and will not be registered under the Securities Act, and, if in the future such beneficial owner decides to offer, resell, 

pledge or otherwise transfer the Notes, such Notes may be offered, resold, pledged or otherwise transferred only in 

accordance with the provisions of the Indenture and the legend on such Notes. Such beneficial owner acknowledges 

that no representation has been made as to the availability of any exemption under the Securities Act or any state 

securities laws or securities laws of any other jurisdiction for resale of the Notes. 

(iv) Such beneficial owner is aware that, except as otherwise provided in the Indenture, the Notes 

being sold to it, if any, in reliance on Rule 144A will be represented by one or more Rule 144A Global Notes and 

that beneficial interests therein may be held only through DTC. Such beneficial owner is aware that, except as 

otherwise provided in the Indenture, the Notes being sold to it, if any, in reliance on Regulation S will be 

represented (A) initially by one or more Temporary Regulation S Global Notes and (B) after the Exchange Date, by 

one or more Regulation S Global Notes, and that in each case beneficial interests therein may be held only through 

Euroclear or Clearstream. 

(v) Such beneficial owner understands that prior to the first Business Day following the Exchange 

Date, any resale or other transfer of beneficial interests in a Temporary Regulation S Global Note in the United 

States or to U.S. Persons shall not be permitted. 

(vi) Such beneficial owner understands that any resale or other transfer of beneficial interests in a 

Temporary Regulation S Global Note or Regulation S Global Note in the United States or to U.S. Persons, and any 

resale or other transfer of beneficial interests in a Rule 144A Global Note to any person other than a QIB/QP, shall 

not be permitted. 

(vii) (A) If a beneficial interest in a Rule 144A Global Note is transferred to a non-U.S. Person 

that is not a U.S. resident within the meaning of the Investment Company Act and that is acquiring such 

Note in an Offshore Transaction in compliance with Rule 903 or Rule 904 of Regulation S under the 

Securities Act, (1) the transferee will take such beneficial interest in the form of a beneficial interest (in the 

denomination so transferred) in a Regulation S Global Note; (2) the transferor will be required to execute 

and deliver to the Note Registrar a Regulation S transfer certificate (the form of which is attached to the 

Indenture and is available from the Note Registrar upon request and in which the transferor represents, 

among other things, that the transferee is not a U.S. Person; and (3) the transferee will be required to 

execute and deliver to the Note Registrar an investment letter (the form of which is attached to the 

Indenture and is available from the Note Registrar upon request), certifying, among other things, that it is 

not a U.S. Person. 

(B) If a beneficial interest in a Regulation S Global Note is transferred to a QIB/QP in a 

transaction exempt from the registration requirements of the Securities Act pursuant to Rule 144A (in 

which case the transferor will inform the transferee that the transfer is being made in reliance on Rule 

144A), (1) the transferee will take such beneficial interest in the form of a beneficial interest (in the 

115

denomination so transferred) in a Rule 144A Global Note; (2) the transferor will be required to execute and 

deliver to the Note Registrar a Rule 144A transfer certificate (the form of which is attached to the Indenture 

and is available from the Note Registrar upon request and in which the transferor represents, among other 

things, that it reasonably believes that the transferee is a QIB/QP); and (3) the transferee will be required to 

execute and deliver to the Note Registrar an investment letter (the form of which is attached to the 

Indenture and is available from the Note Registrar upon request), certifying, among other things, that it is a 

QIB/QP and that it is aware that the transfer is being made in reliance on Rule 144A. 

(viii) With respect to Rule 144A Global Notes, (1) such beneficial owner and each account for which 

such beneficial owner is acquiring Notes are each a Qualified Purchaser that is also a Qualified Institutional Buyer, 

(2) such beneficial owner (or if such beneficial owner is acquiring Notes for any account, each such account) is 

acquiring the Notes as principal for its own account for investment and not for sale in connection with any 

distribution thereof, (3) such beneficial owner and each such account understand that (x) the Notes may be 

transferred only pursuant to an exemption from the Securities Act and that the Co-Issuers are relying on Rule 144A 

and (y) the Issuer is relying on the exception from the Investment Company Act pursuant to Section 3(c)(7) thereof, 

(4) neither such beneficial owner nor any such account (a) was formed, reformed or recapitalized for the specific 

purpose of investing in the Notes or other securities of the Co-Issuers (unless all beneficial owners of such acquiring 

beneficial owner or of such accounts are QIB/QPs), (b) if formed on or before April 30, 1996, is an investment 

company that relies on the exclusion from the definition of “investment company” provided by Section 3(c)(1) or 

Section 3(c)(7) of the Investment Company Act (or a foreign investment company under Section 7(d) thereof relying 

on Section 3(c)(1) or Section 3(c)(7) with respect to those of its holders that are U.S. Persons), unless, with respect 

to its treatment as a Qualified Purchaser, it has, in the manner required by Section 2(a)(51)(C) of the Investment 

Company Act and the rules and regulations thereunder, received the consent of its beneficial owners that acquired 

their interests on or before April 30, 1996, (c) is a broker-dealer that owns and invests on a discretionary basis less 

than U.S.$25,000,000 in securities of unaffiliated issuers, (d) is a participant-directed employee plan, such as a 

401(k) plan, or trust underlying such plan (i.e. a plan referred to in paragraph (a)(1)(i)(D) or (a)(1)(i)(E) of 

Rule 144A, or a trust fund referred to in paragraph (a)(1)(i)(F) of Rule 144A that holds the assets of such plan), 

unless the investment decisions with respect to such plan are made solely by the fiduciary, trustee or sponsor of such 

plan, (e) is a corporation, partnership, common trust fund, special trust, pension, profit sharing or other retirement 

trust fund or plan in which the shareholders, equity owners, partners, beneficiaries, beneficial owners or participants, 

as applicable, may designate the particular investments to be made or the allocation of any investment among such 

shareholders, equity owners, partners, beneficiaries, beneficial owners or participants, as applicable, or (f) is an 

entity that, immediately subsequent to its purchase or other acquisition of a beneficial interest in the Notes, will have 

invested more than 40% of its assets in beneficial interests in the Notes and/or in other securities of the Co-Issuers 

(unless all of the beneficial owners of such entity’s securities are Qualified Purchasers) and (5) such beneficial 

owner and each such account (a) understand, on behalf of itself and each person for which it is acting, that the Co- 

Issuers may receive a list of DTC participants holding Notes (i.e., beneficial interests in the Global Notes) from 

DTC and any other depository through which the Notes (or beneficial interests therein) may be held, (b) agree to 

provide notice to any subsequent transferee of the transfer restrictions relating to the Notes, (c) shall purchase, hold 

and transfer the Notes in at least the minimum denomination of U.S.$250,000 and (d) understand and agree that any 

purported transfer of the Notes to a purchaser that does not comply with the requirements of this paragraph shall be 

null and void ab initio and that the Issuer maintains the right to cause the resale, in accordance with and subject to 

the terms of the Indenture, of any interest in any Global Note previously transferred to a U.S. Person that is 

determined not to have been both a Qualified Purchaser and a Qualified Institutional Buyer at the time it acquired its 

interest in such Global Note. However, without prejudice to the rights of the Issuer against any beneficial owner or 

purported beneficial owner of Notes, nothing in the Indenture or the Notes shall be interpreted to confer on the 

Issuer, the Trustee or any Paying Agent any right against Euroclear to require that Euroclear reverse or rescind any 

trade completed in accordance with the rules of Euroclear. 

Unless determined otherwise by the Issuer in accordance with applicable law, the Class A Notes, Class B 

Notes and Class C Notes issued in the form of Global Notes will bear the legend set forth below: 





116





RULES AND REGULATIONS THEREUNDER. BENEFICIAL INTERESTS IN THIS NOTE MAY BE 

REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) IN COMPLIANCE 

WITH RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”) TO A PERSON THAT THE 

SELLER REASONABLY BELIEVES IS BOTH (1) A “QUALIFIED INSTITUTIONAL BUYER” (AS 

DEFINED IN RULE 144A) (A “QUALIFIED INSTITUTIONAL BUYER”) PURCHASING FOR ITS 

OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER AND (2) A 




QUALIFIED PURCHASER OR (B) TO A PERSON THAT IS NEITHER A U.S. PERSON NOR A U.S. 

RESIDENT (WITHIN THE MEANING OF THE INVESTMENT COMPANY ACT), IN AN OFFSHORE 

TRANSACTION IN COMPLIANCE WITH RULE 903 OR 904 OF REGULATION S UNDER THE 

SECURITIES ACT AND (C) IN EACH CASE (1) UPON DELIVERY OF ALL CERTIFICATIONS, 

OPINIONS AND OTHER DOCUMENTS THAT THE ISSUER OR THE TRUSTEE MAY REQUIRE 

AND (2) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF 

THE UNITED STATES AND ANY OTHER JURISDICTION. IF A BENEFICIAL INTEREST IN THIS 

NOTE IS TRANSFERRED TO A QUALIFIED INSTITUTIONAL BUYER THAT IS ALSO A 

QUALIFIED PURCHASER PURSUANT TO CLAUSE (A) ABOVE, THE OWNER OF THAT 

BENEFICIAL INTEREST, BY ITS ACCEPTANCE THEREOF, WILL BE DEEMED TO REPRESENT, 

ACKNOWLEDGE AND AGREE THAT IT WILL NOT REOFFER, RESELL, PLEDGE OR 

OTHERWISE TRANSFER THAT BENEFICIAL INTEREST EXCEPT TO A TRANSFEREE THAT (i) 

WAS NOT FORMED, REFORMED OR RECAPITALIZED FOR THE SPECIFIC PURPOSE OF 

INVESTING IN THE SECURITIES OF EITHER OF THE CO-ISSUERS (EXCEPT WHEN EACH 

BENEFICIAL OWNER OF THE TRANSFEREE IS A QUALIFIED INSTITUTIONAL BUYER AND A 

QUALIFIED PURCHASER), (ii) IF FORMED ON OR BEFORE APRIL 30, 1996, IS NOT AN 

INVESTMENT COMPANY THAT RELIES ON THE EXCLUSION FROM THE DEFINITION OF 

“INVESTMENT COMPANY” PROVIDED BY SECTION 3(c)(1) OR SECTION 3(c)(7) OF THE 

INVESTMENT COMPANY ACT (OR A FOREIGN INVESTMENT COMPANY UNDER SECTION 

7(d) THEREOF RELYING ON SECTION 3(c)(1) OR SECTION 3(c)(7) WITH RESPECT TO THOSE 

OF ITS HOLDERS THAT ARE U.S. PERSONS), UNLESS, WITH RESPECT TO ITS TREATMENT AS 

A QUALIFIED PURCHASER, IT HAS, IN THE MANNER REQUIRED BY SECTION 2(a)(51)(C) OF 

THE INVESTMENT COMPANY ACT AND THE RULES AND REGULATIONS THEREUNDER, 

RECEIVED THE CONSENT OF THOSE OF ITS BENEFICIAL OWNERS THAT ACQUIRED THEIR 

INTERESTS ON OR BEFORE APRIL 30, 1996, (iii) IS NOT A BROKER-DEALER THAT OWNS AND 

INVESTS ON A DISCRETIONARY BASIS LESS THAN U.S.$25,000,000 IN SECURITIES OF 

UNAFFILIATED ISSUERS, (iv) IS NOT A PARTICIPANT-DIRECTED EMPLOYEE PLAN, SUCH AS 

A 401(k) PLAN, OR TRUST UNDERLYING SUCH PLAN (I.E. A PLAN REFERRED TO IN 

PARAGRAPH (A)(1)(I)(D) OR (A)(1)(I)(E) OF RULE 144A, OR A TRUST FUND REFERRED TO IN 

PARAGRAPH (A)(1)(I)(F) OF RULE 144A THAT HOLDS THE ASSETS OF SUCH PLAN), UNLESS 

THE INVESTMENT DECISIONS WITH RESPECT TO SUCH PLAN ARE MADE SOLELY BY THE 

FIDUCIARY, TRUSTEE OR SPONSOR OF SUCH PLAN, (v) IS NOT A CORPORATION, 

PARTNERSHIP, COMMON TRUST FUND, SPECIAL TRUST, PENSION, PROFIT SHARING OR 

OTHER RETIREMENT TRUST FUND OR PLAN IN WHICH THE SHAREHOLDERS, EQUITY 

OWNERS, PARTNERS, BENEFICIARIES, BENEFICIAL OWNERS OR PARTICIPANTS, AS 

APPLICABLE, MAY DESIGNATE THE PARTICULAR INVESTMENTS TO BE MADE OR THE 

ALLOCATION OF ANY INVESTMENT AMONG SUCH SHAREHOLDERS, EQUITY OWNERS, 

PARTNERS, BENEFICIARIES, BENEFICIAL OWNERS OR PARTICIPANTS, AS APPLICABLE, (vi) 

IS NOT AN ENTITY THAT, IMMEDIATELY SUBSEQUENT TO ITS PURCHASE OR OTHER 

ACQUISITION OF A BENEFICIAL INTEREST IN THIS NOTE, WILL HAVE INVESTED MORE 

THAN 40% OF ITS ASSETS IN BENEFICIAL INTERESTS IN THIS NOTE AND/OR IN OTHER 

SECURITIES OF THE CO-ISSUERS (UNLESS ALL OF THE BENEFICIAL OWNERS OF SUCH 

ENTITY’S SECURITIES ARE QUALIFIED PURCHASERS), (vii) UNDERSTANDS, ON BEHALF OF 

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ITSELF AND EACH PERSON FOR WHICH IT IS ACTING, THAT THE CO-ISSUERS MAY 

RECEIVE A LIST OF DTC PARTICIPANTS HOLDING NOTES (i.e., BENEFICIAL INTERESTS IN 

THE GLOBAL NOTES) FROM DTC AND ANY OTHER DEPOSITORY THROUGH WHICH THE 

NOTES (OR BENEFICIAL INTERESTS THEREIN) MAY BE HELD AND (viii) AGREES TO 

PROVIDE NOTICE TO ANY SUBSEQUENT TRANSFEREE OF THE TRANSFER RESTRICTIONS 

PROVIDED IN THIS LEGEND. FURTHER, NO SALE OR TRANSFER OF THIS NOTE MAY BE 

MADE TO AN EMPLOYEE BENEFIT PLAN OR OTHER PLAN OR ARRANGEMENT SUBJECT TO 

TITLE I OF THE UNITED STATES EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, 

AS AMENDED (“ERISA”) OR SECTION 4975 OF THE UNITED STATES INTERNAL REVENUE 

CODE OF 1986, AS AMENDED (OR SUBSTANTIALLY SIMILAR FEDERAL, STATE OR LOCAL 

LAW) OR A PERSON INVESTING ASSETS OF SUCH A PLAN UNLESS SUCH SALE OR 

TRANSFER WILL SATISFY THE REQUIREMENTS FOR RELIEF UNDER PROHIBITED 

TRANSACTION CLASS EXEMPTION 84-14, 90-1, 91-38, 95-60, 96-23 OR A SIMILAR EXEMPTION 

OR, IN THE CASE OF A PLAN SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW THAT IS 

SUBSTANTIALLY SIMILAR TO THE PROVISIONS OF SECTION 406 OF ERISA OR SECTION 

4975 OF THE CODE (“SIMILAR LAW”), WILL NOT RESULT IN A NONEXEMPT VIOLATION OF 

SUCH SIMILAR LAW. TRANSFERS OF THE NOTES MUST GENERALLY BE ACCOMPANIED BY 

APPROPRIATE TAX AND ERISA TRANSFER DOCUMENTATION AND ARE SUBJECT TO 

RESTRICTIONS AS PROVIDED IN THE INDENTURE. 

A BENEFICIAL INTEREST IN A RULE 144A GLOBAL NOTE WITHIN THE MEANING OF THE 

INDENTURE MAY BE HELD ONLY BY PERSONS SPECIFIED IN CLAUSE (A) OF THE 

IMMEDIATELY PRECEDING PARAGRAPH AND A BENEFICIAL INTEREST IN A REGULATION 

S GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE MAY BE HELD ONLY BY 

PERSONS SPECIFIED IN CLAUSE (B) OF THE IMMEDIATELY PRECEDING PARAGRAPH. 

THE OWNER OF A BENEFICIAL INTEREST HEREOF, BY ITS ACCEPTANCE OF SUCH 

BENEFICIAL INTEREST, WILL BE DEEMED TO HAVE REPRESENTED THAT IT HAS 

OBTAINED SUCH BENEFICIAL INTEREST IN A TRANSACTION IN COMPLIANCE WITH THE 

SECURITIES ACT, THE INVESTMENT COMPANY ACT AND ALL OTHER APPLICABLE LAWS 

OF THE UNITED STATES OR ANY OTHER JURISDICTION, AND THE RESTRICTIONS ON SALE 

AND TRANSFER SET FORTH IN THIS LEGEND AND IN THE INDENTURE. 

NEITHER THIS NOTE NOR BENEFICIAL INTERESTS HEREIN ARE TRANSFERABLE EXCEPT IN 

ACCORDANCE WITH THE RESTRICTIONS DESCRIBED HEREIN AND IN THE INDENTURE. 

ANY SALE OR TRANSFER IN VIOLATION OF SUCH RESTRICTIONS WILL BE OF NO FORCE 

AND EFFECT, WILL BE VOID AB INITIO, AND WILL NOT OPERATE TO TRANSFER ANY 

RIGHTS TO THE TRANSFEREE. EACH TRANSFEROR OF A BENEFICIAL INTEREST IN THIS 

NOTE WILL BE DEEMED TO AGREE TO PROVIDE NOTICE OF THE TRANSFER RESTRICTIONS 

SET FORTH HEREIN AND IN THE INDENTURE TO THE TRANSFEREE. IN ADDITION TO THE 

FOREGOING, THE ISSUER MAINTAINS THE RIGHT TO CAUSE THE RESALE, IN 

ACCORDANCE WITH AND SUBJECT TO THE TERMS OF THE INDENTURE, OF ANY INTEREST 

IN THIS NOTE PREVIOUSLY TRANSFERRED TO A U.S. PERSON THAT HAS BEEN 

DETERMINED NOT TO HAVE BEEN, AT THE TIME IT ACQUIRED ITS INTEREST, BOTH A 

QUALIFIED PURCHASER AND A QUALIFIED INSTITUTIONAL BUYER. 

BY ITS PURCHASE OF ANY NOTE IN THE FORM OF A GLOBAL NOTE, THE PURCHASER 

THEREOF WILL BE DEEMED TO HAVE REPRESENTED AND WARRANTED THAT (1) IT SHALL 

PURCHASE, HOLD AND TRANSFER SUCH GLOBAL NOTE IN AUTHORIZED MINIMUM 

DENOMINATIONS OF U.S.$250,000 AND (2) ON EACH DAY FROM THE DATE ON WHICH THE 

PURCHASER ACQUIRES ITS INTEREST IN SUCH NOTE THROUGH AND INCLUDING THE 

DATE ON WHICH THE PURCHASER DISPOSES OF ITS INTEREST IN SUCH NOTE, EITHER 

THAT (A) IT IS NOT A PLAN, AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE THE 

ASSETS OF ANY PLAN BY REASON OF DEPARTMENT OF LABOR REGULATION SECTION 

2510.3-101 OR OTHERWISE, OR A GOVERNMENTAL OR OTHER PLAN WHICH IS SUBJECT TO 

SIMILAR LAW OR (B) ITS PURCHASE, HOLDING AND DISPOSITION OF SUCH NOTE WILL 

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SATISFY THE REQUIREMENTS FOR RELIEF UNDER PROHIBITED TRANSACTION CLASS 

EXEMPTION 84-14, 90-1, 91-38, 95-60, 96-23 OR A SIMILAR EXEMPTION OR, IN THE CASE OF A 

PLAN SUBJECT TO SIMILAR LAW, WILL NOT RESULT IN A NONEXEMPT VIOLATION OF 

SUCH SIMILAR LAW. 

The following paragraph will be included in the legend for the Rule 144A Global Notes only: 

IF A BENEFICIAL INTEREST IN THIS NOTE IS TRANSFERRED TO A NON-U.S. PERSON THAT 

IS NOT A U.S. RESIDENT WITHIN THE MEANING OF THE INVESTMENT COMPANY ACT IN 

AN OFFSHORE TRANSACTION, PURSUANT TO CLAUSE (B) ABOVE, (1) THE TRANSFEREE 

WILL TAKE SUCH BENEFICIAL INTEREST IN THE FORM OF A BENEFICIAL INTEREST (IN 

THE DENOMINATION SO TRANSFERRED) IN THE REGULATION S GLOBAL NOTE (AS 

DEFINED IN THE INDENTURE); (2) THE TRANSFEROR WILL BE REQUIRED TO EXECUTE AND 

DELIVER TO THE NOTE REGISTRAR (AS DEFINED IN THE INDENTURE) A REGULATION S 

TRANSFER CERTIFICATE (THE FORM OF WHICH IS ATTACHED TO THE INDENTURE AND IS 

AVAILABLE FROM THE NOTE REGISTRAR UPON REQUEST); AND (3) THE TRANSFEREE 

WILL BE REQUIRED TO EXECUTE AND DELIVER TO THE NOTE REGISTRAR AN 

INVESTMENT LETTER (THE FORM OF WHICH IS ATTACHED TO THE INDENTURE AND IS 

AVAILABLE FROM THE NOTE REGISTRAR UPON REQUEST), CERTIFYING, AMONG OTHER 

THINGS, THAT IT IS NOT A U.S. PERSON. 

The following paragraph will be included in the legend for the Regulation S Global Notes only: 

IF A BENEFICIAL INTEREST IN THIS NOTE IS TRANSFERRED TO A U.S. PERSON OR TO ANY 

TRANSFEREE WITHIN THE UNITED STATES, (1) THE TRANSFEREE WILL TAKE SUCH 

BENEFICIAL INTEREST IN THE FORM OF A BENEFICIAL INTEREST (IN THE DENOMINATION 

SO TRANSFERRED) IN THE RULE 144A GLOBAL NOTE (AS DEFINED IN THE INDENTURE); (2) 

THE TRANSFEROR WILL BE REQUIRED TO EXECUTE AND DELIVER TO THE NOTE 

REGISTRAR (AS DEFINED IN THE INDENTURE) A RULE 144A TRANSFER CERTIFICATE (THE 

FORM OF WHICH IS ATTACHED TO THE INDENTURE AND IS AVAILABLE FROM THE NOTE 

REGISTRAR UPON REQUEST); AND (3) THE TRANSFEREE WILL BE REQUIRED TO EXECUTE 

AND DELIVER TO THE NOTE REGISTRAR AN INVESTMENT LETTER (THE FORM OF WHICH 

IS ATTACHED TO THE INDENTURE AND IS AVAILABLE FROM THE NOTE REGISTRAR UPON 

REQUEST), CERTIFYING, AMONG OTHER THINGS, THAT IT IS A QUALIFIED PURCHASER 

THAT IS ALSO A QUALIFIED INSTITUTIONAL BUYER AND THAT IT IS AWARE THAT THE 

TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A. 

Certificated Note to Temporary Regulation S Global Note or Regulation S Global Note 

If a Holder of a Class A Note, Class B Note or Class C Note represented by a Certificated Note wishes at 

any time to exchange its interest in such Certificated Note for an interest in the corresponding Temporary Regulation 

S Global Note or Regulation S Global Note, or to transfer such Certificated Note to a Person who wishes to take 

delivery thereof in the form of an interest in the corresponding Temporary Regulation S Global Note or Regulation 

S Global Note, such Holder may, upon compliance with the following requirements and certain other requirements 

set forth in the Indenture, exchange or transfer, or cause the exchange or transfer of, such Note for an equivalent 

beneficial interest in the corresponding Temporary Regulation S Global Note or Regulation S Global Note, provided 

that such proposed transferee or the person requesting such exchange, as applicable, is not a U.S. Person and is not 

acquiring its interest within the United States. Upon receipt by the Note Registrar of (A) such Holder’s Certificated 

Note, properly endorsed for assignment to the transferee of such interest and (B) certificate (in the forms provided in 

the Indenture) given by the transferor and such transferee, then provided that such certifications conform to the 

applicable transfer restrictions, the Note Registrar shall cancel such Certificated Note and authenticate and deliver 

one or more Temporary Regulation S Global Notes or Regulation S Global Notes, registered in the name specified 

in the assignment described in clause (A) above, in principal amounts designated by the transferor or transferee as 

required under the Indenture (the aggregate of such amounts being equal to the principal amount of the Certificated 

Note surrendered by the transferor), and in no less than minimum authorized denominations. 

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Certificated Note to Rule 144A Global Note 

If a Holder of a Class A Note, Class B Note or Class C Note represented by a Certificated Note wishes at 

any time to exchange its interest in such Certificated Note for an interest in the corresponding Rule 144A Global 

Note, or to transfer its interest in such Certificated Note to a Person who wishes to take delivery thereof in the form 

of an interest in the corresponding Rule 144A Global Note, such Holder may exchange or transfer, or cause the 

exchange or transfer of, such Note for an equivalent beneficial interest in the corresponding Rule 144A Global Note, 

provided that such proposed transferee or the Person requesting such exchange, as applicable, is a Qualified 

Institutional Buyer and a Qualified Purchaser and the transfer complies with the following requirements and certain 

other requirements set forth in the Indenture. Upon receipt by the Note Registrar of (A) such Holder’s Certificated 

Note, properly endorsed for assignment to the transferee of such interest and (B) certificate (in the forms provided in 

the Indenture) given by the transferor and such transferee, then provided that such certifications conform to the 

applicable transfer restrictions, the Note Registrar shall cancel such Certificated Note and authenticate and deliver 

one or more Rule 144A Global Notes, registered in the name specified in the assignment described in clause (A) 

above, in principal amounts designated by the transferor or transferee as required under the Indenture (the aggregate 

of such amounts being equal to the principal amount of the Certificated Note surrendered by the transferor), and in 

no less than minimum authorized denominations. 

Certificated Note to Certificated Note 

Transfers of Certificated Notes 

If a Holder of Notes represented by a Certificated Note wishes at any time to transfer its interest in such 

Notes, such Holder may transfer such interest only upon compliance with the following requirements and certain 

other requirements set forth in the Indenture. Upon receipt by the Note Registrar of (A) such Holder’s Certificated 

Note, properly endorsed for assignment to the transferee of such interest and (B) a certificate (in the form provided 

in the Indenture) given by such transferee, then provided that such certifications conform to the applicable transfer 

restrictions, the Note Registrar shall cancel such Certificated Note and authenticate and deliver one or more 

Certificated Notes, registered in the name specified in the assignment described in clause (A) above, in principal 

amounts designated by the transferor or transferee as required under the Indenture (the aggregate of such amounts 

being equal to the principal amount of the Certificated Note surrendered by the transferor), and in no less than 

minimum authorized denominations. 

No transfer of an Income Note will be effective, and the Trustee will not recognize any such transfer, if it 

may result in 25% or more of the Aggregate Principal Amount of Income Notes being held by Benefit Plan 

Investors. For purposes of this determination, Income Notes held by persons that have represented that they are 

Controlling Persons (other than Benefit Plan Investors) shall be disregarded and shall not be treated as outstanding. 

See “Certain ERISA Considerations.” 

Exchanges of Certificated Notes 

If a Holder of a Certificated Note wishes at any time to exchange such Certificated Note for one or more 

Certificated Notes of different principal amounts, such Holder may exchange such interest for an equivalent 

beneficial interest in Certificated Notes only upon compliance with the following requirements. Upon receipt by the 

Co-Issuers and the Note Registrar of (A) such Holder’s Certificated Note, properly endorsed for such exchange, and 

(B) written instructions from such Holder designating the number and principal amounts of the Certificated Notes to 

be issued (the aggregate of such principal amounts being equal to the principal amount of the Certificated Note 

surrendered for exchange), then the Note Registrar shall cancel such Certificated Note and upon execution by the 

Co-Issuers or Issuer, as the case may be, authenticate and deliver one or more Certificated Notes, each registered in 

the same name as the Certificated Note surrendered by such Holder, in principal amounts designated by such Holder 

(the aggregate of such amounts being equal to the principal amount of the Certificated Note surrendered by such 

Holder), and in no less than minimum authorized denominations. 

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Global Notes and Physical Notes 

Each transferee of Notes represented by an interest in a Global Note or any Physical Note issued in 

exchange for Global Notes will be deemed to have made each of the representations and agreements set forth as 

items (i) through (viii) under “Transfer Restrictions— Global Notes.” 

A holder of a beneficial interest in a Temporary Regulation S Global Note must provide Euroclear or 

Clearstream or the participant organization through which it holds such interest, as the case may be, with a 

certificate certifying that the beneficial owner of the interest in the Temporary Regulation S Global Note is a non- 

U.S. Person outside the United States, and Euroclear or Clearstream, as the case may be, must provide to the Paying 

Agent a certificate to such effect, prior to (i) the payment of interest or principal with respect to such holder’s 

beneficial interest in the Temporary Regulation S Global Note and (ii) any exchange of such beneficial interest for a 

beneficial interest in a Regulation S Global Note. 

A holder of a beneficial interest in any Global Note may not exchange such interest for an interest in a 

Certificated Note or transfer such interest to a Person who takes delivery in the form of a Certificated Note. 

Settlement 

All payments in respect of the Notes shall be made in United States dollars in same-day funds. 

Circular 230 

INCOME TAX CONSIDERATIONS 

Any discussion of U.S. federal tax issues set forth in this Offering Circular was written in connection 

with the promotion and marketing by the Co-Issuers, the Initial Purchasers, and the Placement Agents of the 

transactions described in this Offering Circular. Such discussion was not intended or written to be legal or 

tax advice to any person and was not intended or written to be used, and it cannot be used, by any person for 

the purpose of avoiding any U.S. federal tax penalties that may be imposed on such person. Each investor 

should seek advice based on its particular circumstances from an independent tax advisor. 

General 

The following summary describes the principal U.S. federal income tax and Cayman Islands tax 

consequences of the purchase, ownership and disposition of the Notes. It does not purport to be a comprehensive 

description of all the tax considerations that may be relevant to a decision to purchase the Notes. In particular, 

except as specifically set forth herein, special tax considerations that may apply to certain types of taxpayers, 

including securities dealers, banks and insurance companies, and subsequent purchasers of Notes, are not addressed. 

In addition, this summary does not describe any tax consequences arising under the laws of any taxing jurisdiction 

other than the United States federal government and the Cayman Islands. In general, the summary assumes that a 

holder acquires a Note at original issuance at the original offering price and holds such Note as a capital asset and 

not as part of a hedge, straddle, or conversion transaction, within the meaning of section 1258 of the Code. 

This summary is based on the U.S. and Cayman Islands tax laws, regulations, rulings and decisions in 

effect or available on the date of this Offering Circular, as well as the expected Cayman Islands undertaking 

described in “Income Tax Considerations— Cayman Islands Tax Considerations.” All of the foregoing are subject to 

change, and any change may apply retroactively and could affect the continued validity of this summary, although it 

is expected that no changes will apply in the Cayman Islands due to the undertaking. 

Prospective purchasers of the Notes should consult their own tax advisors as to U.S. federal income tax and 

Cayman Islands tax consequences of the purchase, ownership and disposition of the Notes, including the possible 

application of state, local, non-U.S. or other tax laws. 

121

As used in this section, the term “U.S. holder” means a beneficial owner of a Note that is a “United States 

person” for U.S. federal income tax purposes, generally including a citizen or resident of the United States, a U.S. 

domestic corporation for U.S. federal income tax purposes, any estate the income of which is subject to U.S. federal 

income tax regardless of the source of its income, or any trust if a court within the United States is able to exercise 

primary supervision over the administration of the trust and one or more U.S. persons have the authority to control 

all substantial decisions of the trust. The term “non-U.S. holder” means a beneficial owner of a Note that is not a 

“U.S. holder.” If a partnership (including for this purpose any entity treated as a partnership for U.S. federal income 

tax purposes) is a beneficial owner of any Note, the treatment of a partner in that partnership will generally depend 

upon the status of such partner and the activities of such partnership. 

Tax Treatment of the Issuer 

U.S. Federal Income Taxes 

The Issuer intends to operate so as not to be subject to U.S. federal income taxes on its net income. In this 

regard, on the Closing Date, the Issuer will receive an opinion from Sidley Austin Brown & Wood LLP to the effect 

that, under current law and assuming compliance with the Issuer’s Memorandum of Association and Articles of 

Association, the Indenture, and other related documents, and subject to the discussion of Corresponding Debentures 

and Bank Subordinated Notes below, the Issuer’s contemplated activities will not cause it to be engaged in a trade or 

business in the United States. 

The Issuer may only acquire (a) a Capital Security issued by a trust that holds Corresponding Debentures of 

a U.S. entity or (b) a Bank Subordinated Note or Insurance Surplus Note of a U.S. issuer only if the issuer thereof 

(or, in the case of the Capital Securities, the related Affiliated Depository Institution or Affiliated Insurance 

Institution) if (i) the Issuer has received an opinion of counsel to the effect that such Collateral Debt Security (or the 

related Corresponding Debenture) will be treated as debt for U.S. federal income tax purposes, (ii) the offering 

documents related to the original issuance of such Collateral Debt Security provide that an opinion of counsel was 


applicable) to the effect that, or such U.S. issuer otherwise indicates that, the related Collateral Debt Security (or 

related Corresponding Debenture) will be treated as debt for U.S. federal income tax purposes, or (iii) the Issuer 

reasonably believes that the related Collateral Debt Security (or related Corresponding Debenture) will be treated as 

debt for U.S. federal income tax purposes. 

An issuer’s characterization of an instrument as debt or equity is not binding on the U.S. Internal Revenue 

Service (the “IRS”), and no ruling from the IRS will be sought in respect of the Collateral Debt Securities. If a 

Corresponding Debenture, Bank Subordinated Note, or Insurance Surplus Note were not treated as debt for U.S. 

federal income tax purposes, it likely would be treated as stock in a corporation for U.S. federal income tax 

purposes, without adverse effect on the Issuer’s status concerning any trade or business within the United States (but 

see below for a discussion of the associated withholding tax implications). It is possible, however, that such security 

might be treated as a partnership interest for U.S. federal income tax purposes, in which case the Issuer likely would 

be deemed to be engaged in a trade or business in the United States as a result of being treated as owning a 

partnership interest in a partnership engaged in a trade or business in the United States. 

If the Issuer were engaged (or treated as engaged) in a trade or business in the United States, it would be 

potentially subject to substantial U.S. federal income taxes. The imposition of such taxes would materially affect 

the Issuer’s financial ability to repay the Notes and would materially affect the yield on the Income Notes. 

With respect to Cayman Islands taxation, see the discussion below in “Income Tax Considerations— 

Cayman Islands Tax Considerations.” 

Withholding Taxes 


U.S. entity or (b) a Bank Subordinated Note or Insurance Surplus Note of a U.S. issuer only if the issuer thereof (or, 

in the case of the Capital Securities, the related Affiliated Depository Institution or Affiliated Insurance Institution) 

122

only if (i) the Issuer has received an opinion of counsel to the effect that such Collateral Debt Security (or the related 

Corresponding Debenture) will be treated as debt for U.S. federal income tax purposes, (ii) the offering documents 

related to the original issuance of such Collateral Debt Security provide that an opinion of counsel was received by 

the issuer thereof (or the related Affiliated Depository Institution or Affiliated Insurance Institution, if applicable) to 

the effect that, or such U.S. issuer otherwise indicates that, the related Collateral Debt Security (or related 

Corresponding Debenture) will be treated as debt for U.S. federal income tax purposes, or (iii) the Issuer otherwise 

reasonably believes that the related Collateral Debt Security (or related Corresponding Debenture) will be treated as 

debt for U.S. federal income tax purposes. Accordingly, under current law, the Issuer does not expect that income 

derived by the Issuer in respect of such Collateral Debt Securities will be subject to U.S. withholding tax. In 

addition, it is not expected that the Hedge Agreements entered into by the Issuer will be subject to U.S. withholding 

tax. If a Corresponding Debenture, Bank Subordinated Note or Insurance Surplus Note were not treated as debt for 

U.S. federal income tax purposes, income derived by the Issuer in respect of the related Collateral Debt Security 

could be subject to U.S. withholding tax. Further, income derived by the Issuer in respect of the Collateral Debt 

Securities could become subject to withholding tax as a result of a change in applicable law, possibly with 

retroactive effect. In certain circumstances, the Issuer may be entitled to additional amounts in respect of withheld 

tax; however, if a withholding tax were imposed on income derived by the Issuer in respect of the Collateral Debt 


could impair the Issuer’s ability to make payments on the Notes. 


non-U.S. entity, or (b) a Bank Subordinated Note or Insurance Surplus Note of a non-U.S. issuer only if (i) the issuer 

thereof has received an opinion of counsel to the effect that payments with respect to such Collateral Debt Security 

were not at the time of issuance thereof subject to withholding tax in the jurisdiction of such issuer, (ii) the offering 



applicable) to the effect that, or such issuer otherwise indicates that, payments with respect to such Collateral Debt 

Security were not then subject to withholding tax in the jurisdiction of such issuer, or (iii) the Issuer otherwise 

reasonably believes that payments with respect to such Collateral Debt Security were not at the time of issuance 

thereof subject to withholding tax in the jurisdiction of such issuer. However, it is possible that payments in respect 

of any such Collateral Debt Securities could become subject to withholding tax subsequent to the issuance thereof 

(for example, as a result of a change in law, possibly with retroactive effect). Collateral Debt Securities issued by 

non-U.S. issuers generally will not provide for the payment of additional amounts in respect of any withholding 

taxes imposed. If a withholding tax were imposed on income derived by the Issuer in respect of the Collateral Debt 


could impair the Issuer’s ability to make payments on the Notes. 

Tax Treatment of U.S. Holders of Class A Notes, Class B Notes and Class C Notes 

Status of, and Interest and Discount on, Class A Notes, Class B Notes and Class C Notes 

The Class A Notes, Class B Notes and Class C Notes will be treated as debt for U.S. federal income tax 

purposes. The Co-Issuers and each Holder and beneficial owner of a Class A Note, Class B Note and Class C Note, 

by their acquisition of such Notes, agree to treat the Class A Notes, Class B Notes and Class C Notes as debt of the 

Issuer only. U.S. holders of Class A Notes, Class B Notes and Class C Notes will treat stated interest on such Notes 

as ordinary interest income from sources outside the United States when paid or accrued, in accordance with their 

regular method of tax accounting. In general, if the “issue price” of a Class A Note, Class B Note or Class C Note is 

less than its “stated redemption price at maturity” by more than a de minimis amount, such Note will be considered 

to have original issue discount (“OID”). The issue price of the Class A Notes, Class B Notes and Class C Notes will 

be the first price at which a substantial amount of the relevant Notes is sold to investors. The stated redemption 

price at maturity generally includes all payments other than payments of “qualified stated interest.” It is expected 

that all stated interest on the Class A Notes, Class B Notes and Class C Notes will be qualified stated interest. 

Accordingly, in the case of the Class A Notes, Class B Notes and Class C Notes, the stated redemption price at 

maturity will include the original principal amount of such Notes, but will not include distributions of stated interest. 

Notwithstanding the previous paragraph, it is possible that interest on any of the Class A Notes, the Class B 

Notes, or the Class C Notes could be treated as OID. In particular, it is possible that interest on the Class C Notes 

123

(together with any issuance discount) could be treated as OID because such interest is subject to deferral in certain 

limited circumstances. If a U.S. holder acquires a Class A Note, Class B Note or Class C Note with OID, then 

regardless of such U.S. holder’s method of accounting, the U.S. holder will be required to include such OID in 

income as it accrues under a constant yield method. Accruals of OID will be based on the weighted average life of 

the Class A Notes, Class B Notes and Class C Notes rather than their stated maturity. In the case of the Class A 

Notes, Class B Notes and Class C Notes, accruals of OID should be calculated assuming that interest will be paid 

over the life of such Notes based on the value of LIBOR used in setting the Applicable Periodic Rate for the first 

Periodic Interest Accrual Period, and then adjusting the income for each subsequent Periodic Interest Accrual Period 

for any difference between the actual value of LIBOR used in setting the Applicable Periodic Rate for that 

subsequent Periodic Interest Accrual Period and the assumed rate. It is expected that none of the Class A Notes, 

Class B Notes or Class C Notes will be issued with more than a de minimis amount of OID, if any. 

Sale or Exchange of Class A Notes, Class B Notes and Class C Notes 

In general, a U.S. holder of a Class A Note, Class B Note or Class C Note will have a tax basis in such 

Note equal to the cost of the Note to such U.S. holder, increased by amounts includable in income by such U.S. 

holder as OID, if any, and reduced by any payments thereon other than payments of qualified stated interest. Upon a 

sale or exchange of a Note, a U.S. holder will generally recognize gain or loss equal to the difference between the 

amount realized (less any accrued interest, which would be taxable as such) and the U.S. holder’s adjusted tax basis 

in the Note. Such gain or loss will be from sources within the United States and will generally be long-term capital 

gain or loss if the U.S. holder has held the Note for more than one year at the time of disposition. In certain 

circumstances, U.S. holders that are individuals may be entitled to preferential treatment for net long-term capital 

gains. The ability of U.S. holders to offset capital losses against ordinary income is limited. A U.S. holder may also 

recognize gain upon receipt of a principal payment equal to the difference between the amount received and the 

portion of its adjusted tax basis that is considered to be allocable to such payment. Such gain may be ordinary 

income. 

Alternative Treatment of Class A Notes, Class B Notes and Class C Notes 

The foregoing discussion is based upon treatment of the Class A Notes, Class B Notes and Class C Notes 

as debt for federal income tax purposes. If any such Notes were not so treated, they would be subject to the 

considerations discussed below with respect to the Income Notes. Accordingly, prospective purchasers of the Class 

A Notes and, more particularly the Class B Notes and Class C Notes, should consult their tax advisors regarding the 

consequences of investing in a “passive foreign investment company,” the possible advisability of making a 

protective “qualified electing fund” election with respect to such Notes, the potential consequences of making or not 

making any such protective election, and such other matters as are discussed below with respect to the Income 

Notes. 

Tax Treatment of U.S. Holders of Income Notes 

Status of Income Notes 

For purposes of Cayman Islands law, the Income Notes will be characterized as debt of the Issuer. A 

strong likelihood exists, however, that the Income Notes will be treated as equity for U.S. federal income tax 

purposes. The Co-Issuers and each Holder and beneficial owner of an Income Note, by their acquisition of such 

Notes, agree to treat the Income Notes as equity of the Issuer for such purposes. Except where otherwise indicated, 

this summary also assumes such treatment. No assurance can be given, however, that the IRS will respect this 

position. 

In general, the timing and character of income on the Income Notes may differ substantially depending on 

whether the Income Notes are treated for U.S. federal income tax purposes as debt instruments or as equity of the 

Issuer. Investors should consider the tax consequences of an investment in the Income Notes under either possible 

characterization in light of the Income Notes’ status as debt for purposes of Cayman Islands law. In general, the 

characterization of an instrument for U.S. federal income tax purposes as debt or equity by its issuer as of the time of 

issuance is binding on a holder (but not the IRS), unless the holder takes an inconsistent position and discloses such 

position in its tax return. 

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U.S. holders should consult with their own tax advisers concerning the effect on them of any 

recharacterization of an investment in Income Notes. 

Investment in a Passive Foreign Investment Company 

The Issuer will be a “passive foreign investment company” (“PFIC”) for U.S. federal income tax purposes. 

In general, to avoid certain adverse tax rules described below that apply to deferred income from a PFIC, a U.S. 

holder should consider making an election to treat the Issuer as a “qualified electing fund” (“QEF”) with respect to 

such holder. A QEF election generally should be made by filing IRS Form 8621 (or any successor form) on or 

before the due date for filing a U.S. holder’s federal income tax return for the first taxable year in which it holds 

Income Notes. A U.S. holder making the QEF election must also file IRS Form 8621 (or any successor form) 

annually with the IRS. Failure to comply with the annual reporting requirement described in the preceding sentence 

may result in the termination or invalidation of a U.S. holder’s QEF election. 

If a timely QEF election is made, an electing U.S. holder will be required to include in its ordinary income 

such holder’s pro rata share of the Issuer’s ordinary earnings and to include in its long-term capital gain income such 

holder’s pro rata share of the Issuer’s net capital gain, whether or not distributed, assuming that the Issuer is not a 

“controlled foreign corporation” as discussed below. In certain cases in which a QEF does not distribute all of its 

earnings in a taxable year, its U.S. shareholders may also be permitted to elect to defer payment of some or all of the 

taxes on the QEF’s income but will then be subject to an interest charge on the deferred amount. Prospective 

purchasers of Income Notes should be aware that the Issuer could have ordinary earnings from the underlying 

Capital Securities when the receipt of cash attributable to such earnings is deferred. In addition, under certain 

circumstances, Interest Collections may be used to pay principal of the Class A Notes, Class B Notes and Class C 

Notes. Thus, absent an election to defer the payment of taxes, U.S. holders that make a QEF election may owe tax 

on “phantom” income. 

The Issuer will provide to each U.S. holder or beneficial owner of Income Notes, upon written request 

therefor certifying that it is a U.S. holder or beneficial owner of Income Notes, all information that is required to be 

obtained for U.S. federal income tax purposes by a U.S. holder or beneficial owner that is making a QEF election 

(e.g., the U.S. holder’s or beneficial owner’s pro rata share of ordinary income and net capital gain), a “PFIC Annual 

Information Statement” as described in Treasury Regulation Section 1.1295-1 (or in any successor IRS release or 

Treasury regulation), including all representations and statements required by such statement, and will take any 

other steps necessary to facilitate such election by a U.S. holder or beneficial owner of Income Notes, and 

information required by a U.S. holder or beneficial owner of Income Notes to satisfy its obligations, if any, under 

Treasury Regulation Section 1.6011-4 with respect to transactions undertaken by the Issuer. 

If a U.S. holder does not make a timely QEF election for the year in which it acquired its Income Notes and 

the PFIC rules are otherwise applicable, such holder will be subject to a special tax at ordinary income tax rates on 

so-called “excess distributions” which include both certain distributions from the Issuer and gain on the sale or 

redemption of Income Notes. Under proposed Treasury regulations, a U.S. holder that pledges Income Notes as 

security for an obligation, including payment to a margin account, generally will be treated as having disposed of 

such Income Notes. The amount of income tax on excess distributions will be increased by an interest charge to 

compensate for any tax deferral, calculated as if excess distributions were earned ratably over the period the U.S. 

holder held its PFIC stock. In addition, the tax on excess distributions treated as earned in prior years will be subject 

to tax at the maximum rate applicable in the year in which such income is deemed to have been earned. In many 

cases, the tax on excess distributions will be more onerous than the taxes that would apply if a timely QEF election 

were made. Classification as a PFIC may also have other adverse tax consequences including, in the case of 

individuals, the denial of a “step up” in the basis of the Income Notes at death. 

Where a QEF election is not timely made by a U.S. holder for the year in which it acquired its Income 

Notes, but is made for a later year, the excess distribution rules can be avoided by making an election to recognize 

gain from a deemed sale of the Income Notes at the time when the QEF election becomes effective. 

U.S. HOLDERS OF INCOME NOTES ARE URGED TO CONSULT THEIR TAX ADVISORS 

REGARDING THE U.S. FEDERAL INCOME TAX CONSEQUENCES OF INVESTING IN A PFIC, THE 

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DECISION WHETHER TO MAKE A QEF ELECTION WITH RESPECT TO THE INCOME NOTES AND THE 

CONSEQUENCES OF NOT MAKING SUCH AN ELECTION. 

Investment in a Controlled Foreign Corporation 

Depending on the degree of ownership of the Income Notes (and any classes of other Notes treated as 

equity in the Issuer for U.S. federal income tax purposes) by U.S. holders, the Issuer may be considered a controlled 

foreign corporation (“CFC”). In general, a foreign corporation will be a CFC if more than 50% of the shares of the 

corporation, measured by combined voting power or value, are held directly or indirectly by U.S. Shareholders. A 

“U.S. Shareholder” for this purpose is any U.S. person who owns 10% or more of the combined voting power of all 

classes of shares of a corporation. It is possible that the IRS would assert that the Income Notes (and such other 

classes of Notes) are voting securities and that U.S. holders owning 10% or more of such Notes are U.S. 

Shareholders. If this argument were successful and more than 50% of such Notes were held by such U.S. 

Shareholders, the Issuer would be treated as a CFC. 

If the Issuer were a CFC, subject to certain exceptions, a U.S. Shareholder of the Issuer at the end of a 

taxable year of the Issuer would be required to recognize ordinary income in an amount equal to that person’s pro 

rata share of the “subpart F income” of the Issuer for the year. Among other items, and subject to certain 

exceptions, “subpart F income” includes interest, gains from the sale of securities and income from certain notional 

principal contracts (e.g., swaps and caps). It is likely that, if the Issuer were a CFC, substantially all of its income 

would be subpart F income. If more than 70% of the Issuer’s income is subpart F income, then 100% of its income 

will be so treated. 

If the Issuer were a CFC, a U.S. Shareholder of the Issuer would be taxable on the subpart F income of the 

Issuer under the CFC regime and not under the PFIC rules previously described. As a result, to the extent subpart F 

income of the Issuer includes net capital gains, such gains would be treated as ordinary income of the U.S. 

Shareholder, notwithstanding the fact that generally the character of such gains otherwise would be preserved under 

the PFIC rules if a QEF election were made. Also, the PFIC rule permitting the deferral of tax on undistributed 

earnings would not apply. 

A U.S. holder of Income Notes that is a U.S. Shareholder of the Issuer subject to the CFC rules for only a 

portion of the time in which it holds Income Notes should consult its own tax advisors regarding the interaction of 

the PFIC and CFC rules. 

Distributions on the Income Notes 

The treatment of actual cash distributions on the Income Notes, in very general terms, will vary depending 

on whether a U.S. holder has made a timely QEF election as described above. See “Income Tax Considerations— 

Tax Treatment of U.S. Holders of Income Notes— Investment in a Passive Foreign Investment Company.” If a 

timely QEF election has been made, dividends (which are distributions up to the amount of current and accumulated 

earnings and profits of the Issuer) allocable to amounts previously taxed pursuant to the QEF election will not be 

taxable to U.S. holders. Similarly, if the Issuer is a CFC of which the U.S. holder is a U.S. Shareholder, dividends 

will be allocated first to amounts previously taxed pursuant to the CFC rules and to this extent will not be taxable to 

U.S. holders. Dividends in excess of such previously taxed amounts will be taxable to U.S. holders as ordinary 

income upon receipt. Distributions in excess of any current and accumulated earnings and profits will be treated 

first as a nontaxable return of capital, to the extent of the holder’s adjusted tax basis in the Income Notes, and then 

as capital gain. Distributions on the Income Notes should generally constitute income from sources outside the 

United States. 

In the event that a U.S. holder does not make a timely QEF election, then except to the extent that 

distributions may be attributable to amounts previously taxed pursuant to the CFC rules, some or all of any 

dividends distributed with respect to the Income Notes may be considered excess distributions, taxable as previously 

described. See “Income Tax Considerations— Tax Treatment of U.S. Holders of Income Notes— Investment in a 

Passive Foreign Investment Company.” 

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Sale, Redemption or other Disposition of Income Notes 

In general, a U.S. holder of an Income Note will recognize gain or loss (which will be capital gain or loss, 

except as discussed below) from sources within the United States upon the sale or exchange of an Income Note 

equal to the difference between the amount realized and such holder’s adjusted tax basis in the Income Note. A U.S. 

holder’s tax basis in an Income Note will generally equal the amount it paid for the Income Note, increased by 

amounts taxable to such holder by virtue of a QEF election, or under the CFC rules, and decreased by actual 

distributions from the Issuer that are deemed to consist of such previously taxed amounts or represent a return of 

capital. 

If a U.S. holder does not make a timely QEF election as described above and the PFIC rules are otherwise 

applicable, any gain realized on the sale or exchange of an Income Note will be treated as an excess distribution and 

effectively taxed as ordinary income with an interest charge under the special tax rules described above. See 

“Income Tax Considerations— Tax Treatment of U.S. Holders of Income Notes— Investment in a Passive Foreign 

Investment Company.” 

If the Issuer were treated as a CFC and a U.S. holder were treated as a U.S. Shareholder therein, then any 

gain realized by such holder upon the disposition of Income Notes would be treated as ordinary income to the extent 

of the U.S. holder’s share of the current and accumulated earnings and profits of the Issuer. In this respect, earnings 

and profits would generally not include earnings accumulated from income that was previously included in a U.S. 

holder’s income under the CFC rules or earnings previously included in the U.S. holder’s income under the rules for 

PFICs for which a QEF election has been made. 

The pledge of stock of a PFIC may in some circumstances be treated as a disposition of such stock. 

Potential Treatment of the Income Notes as Debt 

If, contrary to the above discussion, the Income Notes were treated as debt for U.S. federal income tax 

purposes, they would be subject to certain U.S. Treasury regulations governing contingent payment debt 

instruments. In that event, the timing and character of income, gain or loss recognized with respect to an investment 

in the Income Notes would be materially different from that summarized above. In general, U.S. holders would be 

required to include future contingent and noncontingent interest payments in income as such interest accrues based 

upon a projected payment schedule, subject to later adjustment to reflect differences between the accrued and actual 

income amounts, and all income from the Income Notes (including gains on sale) would be ordinary interest income. 

Potential U.S. holders of the Income Notes should, in consultation with their tax advisors, carefully consider the 

potential U.S. income tax characterization of the Income Notes and the potential consequences thereof. 

Tax Treatment of Non-U.S. Holders 

A non-U.S. holder of Notes will be exempt from any U.S. federal income or withholding taxes with respect 

to gain derived from the sale, exchange, or redemption of, or any distributions received in respect of, the Notes, 

unless such gain or distributions are effectively connected with a U.S. trade or business of such holder, or, in the 

case of gain, such holder is a nonresident alien individual who holds the Notes as a capital asset and who is present 

in the United States more than 182 days in the taxable year of the sale and certain other conditions are met. A non- 

U.S. holder will not be considered to be engaged in a U.S. trade or business solely by reason of holding Notes. 

“Non-effectively connected” gain or distributions received by a non-U.S. holder will not be subject to U.S. 

information reporting requirements or U.S. backup withholding, although such holders may be required to furnish a 

certificate to the paying agent of the Issuer attesting to their status as non-U.S. holders. 

Tax Treatment of Tax-Exempt U.S. Holders 

In general, a tax-exempt U.S. holder of Notes will not be subject to tax on unrelated business taxable 

income (“UBTI”) with respect to income from the Notes, except to the extent that the Notes are considered debtfinanced 

property (as defined in the Code) of that entity. A tax-exempt U.S. holder that owns more than fifty percent 

127

of the outstanding Income Notes and also owns Class A Notes, Class B Notes or Class C Notes should consider the 

possible application of the special UBTI rules for amounts received from controlled entities. 

A tax-exempt entity may not make a QEF election if the tax-exempt U.S. holder would not otherwise be 

subject to tax on income from the Income Notes. 

Information Reporting and Backup Withholding 

Information reporting to the IRS generally will be required with respect to payments on the Notes and 

proceeds of the sale of the Notes received by holders other than corporations or other exempt recipients. Certain 

U.S. holders may be subject to backup withholding unless such holders furnish to the Trustee or other paying agent 

IRS Form W-9 (or applicable successor form) or otherwise establish an exemption. Backup withholding will 

generally apply on payments to non-U.S. holders unless such holders furnish to the Trustee or other paying agent 

IRS Form W-8BEN (or applicable successor form) or otherwise establish an exemption. As a condition to the 

payment of principal and interest on any Note without U.S. federal backup withholding, the Issuer shall require 

holders of Notes to deliver to the Trustee properly completed and signed IRS forms as discussed above. 

Transfer Reporting 

Treasury regulations require reporting for certain transfers of property (including cash) to a foreign 

corporation by U.S. persons or entities. In general, if the Income Notes are treated as equity, these rules require any 

U.S. holders who acquire such Notes to file IRS Form 926 with the IRS and to supply certain additional information 

to the IRS. In the event a U.S. holder fails to file any such required form, the U.S. holder could be subject to a 

penalty equal to 10% of the gross amount paid for the Notes subject to a maximum penalty of U.S.$100,000 (except 

in cases involving intentional disregard). Purchasers of Income Notes are urged to consult their tax advisors 

regarding these reporting requirements. 

Disclosure Requirements for Holders Recognizing Significant Losses or Experiencing Significant Book-Tax 

Differences 

A holder that claims significant losses in respect of the Notes for U.S. federal income tax purposes 

(generally (i) $10,000,000 or more in a taxable year or $20,000,000 or more in any combination of taxable years for 

corporations or partnerships all of the partners of which are corporations, (ii) $2,000,000 or more in a taxable year or 

$4,000,000 or more in any combination of taxable years for all other taxpayers, and (iii) $50,000 or more in a 

taxable year for individuals or trusts with respect to foreign currency transactions) or reports any item of income, 

gain, expense, or loss in respect of the Notes for United States federal income tax purposes in an amount that differs 

from the amount reported for book purposes by more than $10,000,000 on a gross basis in any taxable year may be 

subject to certain disclosure requirements for “reportable transactions.” Failure to comply with the disclosure 

requirements will subject investors to substantial penalties. Prospective investors should consult with their tax 

advisors concerning any possible disclosure obligation with respect to the Notes. 

Cayman Islands Tax Considerations 

Prospective investors should consult their professional advisers on the possible tax consequences of buying, 

holding or selling any Notes under the laws of their country of citizenship, residence or domicile. 

The following is a discussion of certain Cayman Islands income tax consequences of an investment in the 

Notes. The discussion is a general summary of present law, which is subject to prospective and retroactive change. 

It is not intended as tax advice, does not consider any investor's particular circumstances, and does not consider tax 

consequences other than those arising under Cayman Islands law. 

Under existing Cayman Islands laws: 

(i) payments of principal and interest in respect of the Notes will not be subject to taxation in 

the Cayman Islands and no withholding will be required on such payments to any holder of a Note and 

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gains derived from the sale of Notes will not be subject to Cayman Islands income or corporation tax. The 

Cayman Islands currently have no income, corporation or capital gains tax and no estate duty, inheritance 

tax or gift tax; 

(ii) no stamp duty is payable in respect of the issue or transfer of the Notes, although such 

duty may be payable if any Notes are executed in or brought into the Cayman Islands; and 

(iii) certificates evidencing the Notes, in registered form, to which title is not transferable by 

delivery, should not attract Cayman Islands stamp duty. However, an instrument transferring title to a 

Note, if executed in or brought into the Cayman Islands, would be subject to Cayman Islands stamp duty. 

The Issuer has been incorporated under the laws of the Cayman Islands as an exempted company and has 

applied for and expects to obtain an undertaking from the Governor-in-Cabinet of the Cayman Islands in 

substantially the following form: 

The Tax Concessions Law 

(1999 Revision) 

Undertaking as to Tax Concessions 

In accordance with the provisions of Section 6 of The Tax Concessions Law (1999 Revision), the 

Governor-in-Cabinet undertakes with: 

MMCapS Funding XVII, Ltd. “the Company” 

(a) 

(b) 

that no Law which is hereafter enacted in the Islands imposing any tax to be levied on 

profits, income, gains or appreciations shall apply to the Company or its operations; and 

in addition, that no tax to be levied on profits, income, gains or appreciations or which is 

in the nature of estate, duty or inheritance tax shall be payable 

(i) 

(ii) 

on or in respect of the shares, debentures or other obligations of the Company; 

or 

by way of the withholding in whole or in part, of any relevant payment as 

defined in Section 6(3) of the Tax Concessions Law (1999 Revision). 

These concessions shall be for a period of THIRTY years from the 2 nd day of August 2005. 

Acting Governor-in-Cabinet 

The Cayman Islands does not have an income tax treaty arrangement with the United States or any other 

country. The Cayman Islands has entered into an information exchange agreement with the United States. 

All payments in respect of the Notes will be made without withholding or deduction for, or on account of, 

any present or future taxes, duties or charges of whatsoever nature unless the Issuer or the Paying Agent is required 

by applicable law to make any payment in respect of the Notes subject to any withholding or deduction for, or on 

account of, any present or future taxes, duties or charges of whatsoever nature. In that event the Issuer or the Paying 

Agent (as the case may be) shall make such payment after such withholding or deduction has been made and shall 

account to the relevant authorities for the amount so required to be withheld or deducted. Neither the Issuer nor the 

Paying Agent will be obliged to make any additional payments to holders of Notes in respect if such withholding or 

deduction. No income or withholding taxes are due in the Cayman Islands with respect to the Notes. 

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CERTAIN ERISA CONSIDERATIONS 

Any discussion of U.S. federal tax issues set forth in this Offering Circular was written in connection 

with the promotion and marketing by the Co-Issuers, the Initial Purchasers, and the Placement Agents of the 

transactions described in this Offering Circular. Such discussion was not intended or written to be legal or 

tax advice to any person and was not intended or written to be used, and it cannot be used, by any person for 

the purpose of avoiding any U.S. federal tax penalties that may be imposed on such person. Each investor 

should seek advice based on its particular circumstances from an independent tax advisor. 

The United States Employee Retirement Income Security Act of 1974, as amended (“ERISA”), imposes 

certain requirements on “employee benefit plans” (as defined in Section 3(3) of ERISA) subject to ERISA, including 

entities such as collective investment funds and separate accounts whose underlying assets include the assets of such 

plans (collectively, “ERISA Plans”) and on those persons who are fiduciaries with respect to ERISA Plans. 

Investments by ERISA Plans are subject to ERISA’s general fiduciary requirements, including the requirement of 

investment prudence and diversification and the requirement that an ERISA Plan’s investments be made in 

accordance with the documents governing the ERISA Plan. The prudence of a particular investment must be 

determined by the responsible fiduciary of an ERISA Plan by taking into account the ERISA Plan’s particular 

circumstances and all of the facts and circumstances of the investment including, but not limited to, the matters 

discussed above under “Risk Factors” and the fact that in the future there may be no market in which such fiduciary 

will be able to sell or otherwise dispose of any Notes it may purchase. 

Section 406 of ERISA and Section 4975 of the Code prohibit certain transactions involving the assets of an 

ERISA Plan, as well as those plans that are not subject to ERISA but which are subject to Section 4975 of the Code, 

such as individual retirement accounts (together with ERISA Plans, “Plans”), and including entities whose 

underlying assets include the assets of such Plans and persons (referred to as “parties in interest” or “disqualified 

persons”) having certain relationships to such Plans, unless a statutory, regulatory or administrative exemption is 

applicable to the transaction. A party in interest or disqualified person who engages in a prohibited transaction may 

be subject to excise taxes and other penalties and liabilities under ERISA and the Code. 

The U.S. Department of Labor has promulgated a regulation, 29 CFR Section 2510.3-101 (the “Plan Asset 

Regulation”), describing what constitutes the assets of a Plan with respect to the Plan’s investment in an entity for 

purposes of certain provisions of ERISA, including the fiduciary responsibility provisions of Title I of ERISA and 

Section 4975 of the Code. Under the Plan Asset Regulation, if a Plan invests in an “equity interest” of an entity that 

is neither a “publicly-offered security” nor a security issued by an investment company registered under the 

Investment Company Act, the Plan’s assets include both the equity interest and an undivided interest in each of the 

entity’s underlying assets, unless it is established that the entity is an “operating company” or that equity 

participation in the entity by Benefit Plan Investors is not “significant.” The term “Benefit Plan Investor” is defined 

in the Plan Asset Regulation as (a) any employee benefit plan (as defined in Section 3(3) of ERISA), whether or not 

it is subject to the provisions of Title I of ERISA, (b) any plan described in Section 4975(e)(1) of the Code and (c) 

any entity whose underlying assets include plan assets by reason of a plan’s investment in the entity. 

The Class A Notes, Class B Notes and Class C Notes should not be considered to be “equity interests” in 

the Co-Issuers. However, the Income Notes may constitute an “equity interest” in the Issuer for purposes of the Plan 

Asset Regulation, and such Income Notes will not constitute “publicly-offered securities” for purposes of the Plan 

Asset Regulation. In addition, the Issuer will not be registered under the Investment Company Act and it is not 

likely that the Issuer will qualify as an “operating company” for purposes of the Plan Asset Regulation. Therefore, 

if equity participation in the Issuer by Benefit Plan Investors is “significant” within the meaning of the Plan Asset 

Regulation, the assets of the Issuer would be considered to be the assets of any Plans that purchase or hold Income 

Notes. In such circumstances, in addition to considering the applicability of ERISA and the Code to the Income 

Notes, a Plan fiduciary considering an investment in the Income Notes should consider the applicability of ERISA 

and the Code to transactions involving the Issuer, Placement Agents, Initial Purchasers or Collateral Manager and 

their respective Affiliates, including whether such transactions might constitute a prohibited transaction under 

ERISA or Section 4975 of the Code or otherwise may result in a breach of fiduciary duty under ERISA. 

Under the Plan Asset Regulation, equity participation in an entity (including the Issuer) by Benefit Plan 

Investors is “significant” on any date if, immediately after the most recent acquisition of any equity interest in the 

130

entity, 25% or more of the value of any class of equity interests in the entity is held by Benefit Plan Investors. For 

purposes of this determination, the value of equity interests held by a person (other than a Benefit Plan Investor) that 

has discretionary authority or control with respect to the assets of the entity or that provides investment advice for a 

fee (direct or indirect) with respect to such assets (or any “affiliate” of such a person (as defined in the Plan Asset 

Regulation)) is disregarded (any such person with respect to the Issuer, a “Controlling Person”). 

The Issuer intends to limit equity participation in the Issuer by Benefit Plan Investors to less than 25% of 

the Income Notes. In order to effect this limitation, each prospective purchaser of Income Notes in the initial 

offering thereof will be required to represent, in effect, as to whether such purchaser is a Benefit Plan Investor or 

Controlling Person. No Income Notes will be sold to purchasers that have represented that they are Benefit Plan 

Investors or Controlling Persons to the extent that such sale would result in Benefit Plan Investors owning 25% or 

more of the Aggregate Principal Amount of the Income Notes, disregarding Income Notes held by Controlling 

Persons. In addition, as a condition to the transfer of Income Notes after the initial offering thereof, each 

prospective transferee will be required to represent, in effect, as to whether such transferee is a Benefit Plan Investor 

or Controlling Person, and the Trustee will not register the transfer of such Income Notes to persons that have 

represented that they are Benefit Plan Investors or Controlling Persons to the extent such transfer would result in 

Benefit Plan Investors owning 25% or more of the Aggregate Principal Amount of the Income Notes, disregarding 

Income Notes held by Controlling Persons. 

To the extent a change in the character of an owner of an Income Note causes the 25% limitation to be 

exceeded, the Issuer has the right under the Indenture (in addition to any other rights or remedies it may have under 

the Indenture or otherwise) to compel such owner to sell its interest in such Income Notes or to sell such interest on 

behalf of such owner in order to ensure that equity participation by Benefit Plan Investors is not “significant” within 

the meaning of the Plan Asset Regulations. 

There can be no assurance that, despite the transfer restrictions relating to purchases by Benefit Plan 

Investors and Controlling Persons and the procedures to be employed by the Trustee to attempt to limit the 

ownership by Benefit Plan Investors of the Income Notes to less than 25% of the Aggregate Principal Amount 

thereof, disregarding Income Notes held by Controlling Persons, Benefit Plan Investors will not in actuality own 

25% or more of the Income Notes. 

If for any reason the assets of the Issuer are deemed to be “plan assets” of a Plan subject to ERISA or 

Section 4975 of the Code because Benefit Plan Investors own 25% or more of the Income Notes and one or more 

Plans is an owner of Income Notes, certain transactions that the Issuer might enter into, or may have entered into, in 

the ordinary course of its business might constitute non-exempt “prohibited transactions” under Section 406 of 

ERISA or Section 4975 of the Code and might have to be rescinded at significant cost to the Issuer. The Collateral 

Manager, as an ERISA fiduciary, may be prevented from engaging in certain investments (as not being deemed 

consistent with ERISA prudent investment standards) or engaging in certain transactions or fee arrangements, 

because they might be deemed to cause non-exempt prohibited transactions. It also is not clear that Section 403(a) 

of ERISA, which generally requires that all of the assets of an ERISA Plan be held in trust and limits delegation of 

investment management responsibilities by fiduciaries of ERISA Plans, would be satisfied. 

Additionally, without regard to whether the assets of the Issuer are “plan assets” of investing Plans, 

prohibited transactions within the meaning of Section 406 of ERISA or Section 4975 of the Code may arise if Notes 

are acquired by a Plan with respect to which the Co-Issuers, Placement Agents or Initial Purchasers, or any of their 

respective Affiliates, is a party in interest or a disqualified person. Certain exemptions from the prohibited 

transaction provisions of Section 406 of ERISA and Section 4975 of the Code may be applicable, however, 

depending in part on the type of Plan fiduciary making the decision to acquire a Note and the circumstances under 

which such decision is made. Included among these exemptions are Prohibited Transaction Class Exemption 

(“PTCE”) 96-23 (relating to transactions directed by an in-house professional asset manager); PTCE 95-60 (relating 

to transactions involving insurance company general accounts); PTCE 91-38 (relating to investments by bank 

collective investment funds); PTCE 90-1 (relating to investments by insurance company pooled separate accounts); 

and PTCE 84-14 (relating to transactions effected by a qualified professional asset manager). There can be no 

assurance that any of these class exemptions or any other exemption will be available with respect to any particular 

transaction involving the Notes. 

131

BY ITS PURCHASE OF ANY NOTE IN THE FORM OF A GLOBAL NOTE, THE PURCHASER 

THEREOF WILL BE DEEMED TO HAVE REPRESENTED AND WARRANTED, AND PURCHASERS OF 

THE CERTIFICATED CLASS A NOTES, CERTIFICATED CLASS B NOTES, CERTIFICATED CLASS C 

NOTES AND INCOME NOTES WILL BE REQUIRED TO REPRESENT AND WARRANT, ON EACH DAY 

FROM THE DATE ON WHICH THE PURCHASER ACQUIRES ITS INTEREST IN SUCH NOTE THROUGH 

AND INCLUDING THE DATE ON WHICH THE PURCHASER DISPOSES OF ITS INTEREST IN SUCH 

NOTE, EITHER THAT (A) IT IS NOT A PLAN, AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE 

THE ASSETS OF ANY PLAN BY REASON OF DEPARTMENT OF LABOR REGULATION SECTION 2510.3- 

101 OR OTHERWISE, OR A GOVERNMENTAL OR OTHER PLAN WHICH IS SUBJECT TO ANY 

FEDERAL, STATE OR LOCAL LAW (“SIMILAR LAW”) THAT IS SUBSTANTIALLY SIMILAR TO THE 

PROVISIONS OF SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE OR (B) ITS PURCHASE, 

HOLDING AND DISPOSITION (1) OF A CLASS A NOTE, CLASS B NOTE OR CLASS C NOTE WILL 

SATISFY THE REQUIREMENTS FOR RELIEF UNDER PROHIBITED TRANSACTION CLASS EXEMPTION 

84-14, 90-1, 91-38, 95-60, 96-23 OR A SIMILAR EXEMPTION OR, IN THE CASE OF A PLAN SUBJECT TO 

SIMILAR LAW, WILL NOT RESULT IN A NONEXEMPT VIOLATION OF SUCH SIMILAR LAW, OR (2) OF 

AN INCOME NOTE WILL NOT RESULT IN A PROHIBITED TRANSACTION UNDER SECTION 406 OF 

ERISA OR SECTION 4975 OF THE CODE (OR, IN THE CASE OF A PLAN SUBJECT TO SIMILAR LAW, 

UNDER SUCH SIMILAR LAW) FOR WHICH AN EXEMPTION IS NOT AVAILABLE, ALL THE 

CONDITIONS OF WHICH ARE SATISFIED. 

Governmental plans and certain church plans, while not subject to the fiduciary responsibility provisions of 

ERISA or the provisions of Section 4975 of the Code, may nevertheless be subject to local, state or other federal 

laws that are substantially similar to the foregoing provisions of ERISA and the Code. Fiduciaries of any such plans 

should consult with their counsel before purchasing any Notes. 

Any Plan fiduciary that proposes to cause a Plan to purchase any Notes should consult with its counsel 

regarding the applicability of the fiduciary responsibility and prohibited transaction provisions of ERISA and 

Section 4975 of the Code to such an investment, and to confirm that such investment will not constitute or result in a 

prohibited transaction or any other violation of an applicable requirement of ERISA, the Code or other applicable 

law. 

The sale of any Notes to a Plan is in no respect a representation by the Co-Issuers, Placement Agents, 

Initial Purchasers or Collateral Manager that such an investment meets all relevant legal requirements with respect 

to investments by Plans generally or any particular Plan, or that such an investment is appropriate for Plans 

generally or any particular Plan. 

CERTAIN LEGAL INVESTMENT CONSIDERATIONS 

Institutions whose investment activities are subject to legal investment laws and regulations or to review by 

certain regulatory authorities may be subject to restrictions on investments in the Notes. Any such institution should 

consult its legal advisors in determining whether and to what extent there may be restrictions on its ability to invest 

in the Notes. Without limiting the foregoing, any financial institution that is subject to the jurisdiction of the 

Comptroller of Currency, the Board of Governors of the Federal Reserve System, the FDIC, the Office of Thrift 

Supervision, the National Credit Union Administration, any state insurance commission, or any other federal or state 

agencies with similar authority should review any applicable rules, guidelines and regulations prior to purchasing 

the Notes. Depository institutions should review and consider the applicability of the Federal Financial Institutions 

Examination Council Supervisory Policy Statement on Securities Activities, which has been adopted by the 

respective federal regulators. 

None of the Issuer, the Co-Issuer, the Initial Purchasers, the Placement Agents, the Collateral Manager, the 

Share Trustee, the Administrator or the Trustee or any of their Affiliates makes any representation as to the proper 

characterization of the Notes for legal investment or other purposes, or as to the ability of particular investors to 

purchase the Notes for legal investment or other purposes or as to the ability of particular investors to purchase the 

Notes under applicable investment restrictions. Accordingly, all institutions whose activities are subject to legal 

investment laws and regulations, regulatory capital requirements or review by regulatory authorities should consult 

132

their own legal advisors in determining whether and to what extent the Notes are subject to investment, capital or 

other restrictions. Without limiting the generality of the foregoing, none of the Issuer, the Co-Issuer, the Initial 

Purchasers, the Placement Agents, the Collateral Manager, the Share Trustee, the Administrator or the Trustee or 

any of their Affiliates makes any representation as to the characterization of the Notes as a U.S.-domestic or foreign 

(non-U.S.) investment under any state insurance code or related regulations, and they are not aware of any published 

precedent that addresses such characterization. Although they are not making any such representation, the Issuer 

and Co-Issuer understand that the New York State Insurance Department, in response to a request for guidance, has 

been considering the characterization (as U.S.-domestic or foreign (non-U.S.)) of certain collateralized debt 

obligation securities co-issued by a non-U.S. issuer and a U.S. co-issuer. There can be no assurance as to the nature 

of any advice or other action that may result from such consideration. The uncertainties described above (and any 

unfavorable future determinations concerning legal investment or financial institution regulatory characteristics of 

the Notes) may affect the liquidity of the Notes. 

RATINGS 

It is a condition to the issuance of the Notes that the Class A-1 Notes and the Class A-2 Notes each be rated 

“Aaa” by Moody’s, “AAA” by Fitch and “AAA” by S&P, that the Class B Notes each be rated at least “Aa2” by 

Moody’s, at least “AA” by Fitch and at least “AA” by S&P and that the Class C-1 Notes and Class C-2 Notes each 

be rated at least “A2” by Moody’s and at least “A” by Fitch. The ratings of the Class A Notes, Class B Notes and 

Class C Notes address timely payment of interest and ultimate payment of principal (in the case of the Class C-1 

Notes and Class C-2 Notes, the addition of Class C-1 Note Deferred Interest or Class C-2 Note Deferred Interest to 

the principal balance of the Class C-1 Notes and the Class C-2 Notes, respectively, as described herein rather than 

the payment of interest in cash is not a failure to timely pay interest on the Class C-1 Notes or Class C-2 Notes). 

The Income Notes will not be rated by any rating agency. 

A security rating is not a recommendation to buy, sell or hold securities and may be subject to revision or 

withdrawal at any time by the assigning rating agency. In the event that a rating initially assigned to the Class A 

Notes, Class B Notes or Class C Notes is subsequently lowered or withdrawn for any reason, no person or entity is 

obligated to provide any additional support or credit enhancement with respect to the Notes. 

The Indenture provides that the Issuer shall use its best reasonable efforts to obtain an annual review by 

each Rating Agency of its ratings assigned to the Notes. The Issuer is not required to maintain the above-described 

ratings after the Closing Date. Neither the failure of a Rating Agency to review or confirm a rating nor the 

withdrawal of a rating constitutes an Event of Default under the Indenture. 

USE OF PROCEEDS 

A portion of the gross proceeds received from the issuance and sale of the Notes and the Upfront Payment 

will be applied by the Issuer to pay the organizational expenses of the Co-Issuers (including, without limitation, the 

legal fees and expenses of counsel to the Co-Issuers, the Initial Purchasers, the Placement Agents and the Collateral 

Manager), expenses relating to the acquisition of the Collateral Debt Securities and any other Administrative 

Expenses incurred by the Issuer on or prior to, or in connection with, the Closing Date and expenses of the offering 

the Notes (including placement agency fees payable in connection with the placement of the Income Notes), such 

expenses in the aggregate estimated to equal U.S.$ 8,957,552. In addition, the Issuer will make a deposit of 

U.S.$50,000 in the Expense Reserve Account from proceeds received from the issuance and sale of the Notes and 

the Upfront Payment. The net proceeds received from the issuance and sale of the Notes and the Upfront Payment, 

after payment of the foregoing expenses, will be used by the Issuer to purchase a portfolio of Collateral Debt 

Securities with an aggregate Principal Balance of U.S.$300,000,000. 

PLAN OF DISTRIBUTION 

The Class A Notes, Class B Notes and Class C Notes are being offered by Sandler O’Neill & Partners, L.P. 

an Affiliate of the Collateral Manager, and Greenwich Capital Markets, Inc. (in such capacity, the “Initial 

133

Purchasers”), and the Income Notes are being offered by the Issuer through Sandler O’Neill & Partners, L.P. and 

Greenwich Capital Markets, Inc., (in such capacity, the “Placement Agents”), in each case to prospective purchasers 

from time to time in individually negotiated transactions at varying prices to be determined in each case at the time 

of sale, (a) within the United States or to U.S. Persons in transactions in which the purchasers are Qualified 

Purchasers that are also (x) Qualified Institutional Buyers, (y) in the case of Class A Notes, Class B Notes and Class 

C Notes issued in the form of Certificated Notes, institutional “accredited investors” (as defined in clause (1), (2), 

(3) or (7) of Rule 501(a) of Regulation D under the Securities Act (“Rule 501(a)”)) or (z) in the case of the Income 

Notes, “accredited investors” (as defined in Rule 501(a)), and (b) outside the United States to non-U.S. Persons in 

reliance on Regulation S. 

Subject to the terms and conditions set forth in the Purchase Agreement, the Co-Issuers have agreed to sell 

the Class A Notes, the Class B Notes and the Class C Notes to the Initial Purchasers, and each Initial Purchaser has 

agreed to purchase from the Co-Issuers the principal balance of each such Class of Notes as set forth under its name 

below. 

Class of Notes Greenwich Capital Markets, Inc. Sandler O’Neill & Partners, L.P. 

Class A-1 Notes: U.S.$153,900,000 U.S.$8,100,000 

Class A-2 Notes: $18,525,000 $975,000 

Class B Notes: $31,350,000 $1,650,000 

Class C-1 Notes: $33,701,250 $1,773,750 

Class C-2 Notes: $33,701,250 $1,773,750 

The Purchase Agreement provides that the obligations of the Initial Purchasers to purchase the Notes are 

subject to approval of legal matters by counsel and to other conditions. The Initial Purchasers must purchase all the 

Class A Notes, Class B Notes and Class C Notes if they purchase any of the Notes. The prices paid by the Initial 

Purchasers for the Class A Notes, Class B Notes and Class C Notes may be less than those paid by other purchasers 

of Class A Notes, Class B Notes and Class C Notes. The Initial Purchasers may offer or sell Class A Notes, Class B 

Notes and Class C Notes to purchasers at negotiated prices which may vary among different purchasers of Notes of 

any Class. In addition to the structuring and placement fees paid to them, the Initial Purchasers may be deemed to 

receive compensation for the sale of the Notes to the extent that the prices paid by them for the Notes are less than 

the prices at which the Notes are resold. 

The Notes are offered when, as and if issued, subject to prior sale or withdrawal, cancellation or 

modification of the offer without notice and subject to approval of certain legal matters by counsel and certain other 

conditions. It is expected that delivery of the Notes will be made on or about the Closing Date, against payment in 

immediately available funds. 

The Notes have not been and will not be registered under the Securities Act and may not be offered or sold 

within the United States or to, or for the account or benefit of, U.S. Persons except to Qualified Purchasers that are 

also (x) Qualified Institutional Buyers, (y) in the case of Class A Notes, Class B Notes and Class C Notes issued in 

the form of Certificated Notes, institutional “accredited investors” (as defined in clause (1), (2), (3) or (7) of Rule 

501(a) or (z) in the case of the Income Notes, “accredited investors” (as defined in Rule 501(a)). See “Notice to 

Purchasers.” No Note may be sold or transferred unless such sale or transfer does not cause either of the Co-Issuers 

or the Trust Estate to become subject to the regulatory requirements of the Investment Company Act. 

Each Initial Purchaser and Placement Agent has represented, warranted and agreed in the Purchase 

Agreement or the Agency Agreement, as applicable, that (A)(i) it has not offered or sold, and, prior to the expiration 

of a period of six months from the closing of the offering of the Notes, will not offer or sell any Notes to persons in 

the United Kingdom except to persons whose ordinary activities involve them in acquiring, holding, managing or 

disposing of investments (as principal or agent) for the purposes of their businesses or otherwise in circumstances 

which have not resulted and will not result in an offer to the public in the United Kingdom within the meaning of the 

Prospectus Regulations 2005, (ii) it has only communicated or caused to be communicated and will only 

communicate or cause to be communicated in the United Kingdom any invitation or inducement to engage in 

investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000 (the 

134

“FSMA”)) received by it in connection with the issue or sale of any Notes in circumstances in which section 21(1) 

of the FSMA does not apply to the Co-Issuers and (iii) it has complied and will comply with all applicable 

provisions of the FSMA with respect to anything done by it in relation to the Notes in, from or otherwise involving 

the United Kingdom, (B) it undertakes not to offer, sell, resell, transfer or deliver, directly or indirectly, any Notes, 

or to distribute or publish any of the offering documents, to any individual or legal entity in Belgium other than: (i) 

investors required to invest a minimum of EUR250,000 (per investor and per transaction); and (ii) institutional 

investors as defined in Article 3, 2°, of the Belgian Royal Decree of 7 July 1999 on the Public Character of Financial 

Transactions, acting for their own account and (C) (i) it has not offered or sold, and will not offer or sell, directly or 

indirectly, the Notes to the public in France and that offers and sales of the Notes in France will be made only to 

Qualified Investors (“Investisseurs Qualifies”) acting for their own account and/or a Limited Circle of Investors 

(“Cercle Restreint D'Investisseurs”) as defined and in accordance with Article L.411-2 of the French Code 

Monétaire et Financier and Décret no. 98-880 dated 1 October 1998, (ii) the Notes will not be subject to any 

approval by or registration (visa) with the French Autorité des Marchés Financiers and (iii) it has not distributed nor 

caused to be distributed and will not distribute nor cause to be distributed in France this Offering Circular or any 

other offering material relating to the Notes other than to investors to whom offers and sales of the Notes in France 

may be made as described above. 

One or more of the Initial Purchasers, the Placement Agents, their respective Affiliates and Initial 

Purchaser Affiliates and Placement Agent Affiliates may have had in the past and may in the future have business 

relationships and dealings with one or more issuers of Collateral Debt Securities and their Affiliates and may own 

equity or debt securities issued by issuers of Collateral Debt Securities or their Affiliates. One or more of the Initial 

Purchasers, the Placement Agents, their respective Affiliates and Initial Purchaser Affiliates and Placement Agent 

Affiliates may have provided and may in the future provide investment banking services to a Collateral Debt 

Securities Issuer, Affiliated Depository Institution or Affiliated Insurance Institution or any of their respective 

Affiliates and may have received or may receive compensation for such services. In addition, one or more of the 

Initial Purchasers, the Placement Agents, their respective Affiliates and Initial Purchaser Affiliates and Placement 

Agent Affiliates may buy securities from and sell securities to a Collateral Debt Securities Issuer, Affiliated 

Depository Institution or Affiliated Insurance Institution or any of their respective Affiliates for their own account or 

for the accounts of their customers. See “Risk Factors— Potential Conflicts of Interest— Conflicts of Interest 

Involving the Initial Purchasers and Placement Agents” and “— Purchase of Collateral Debt Securities; Warehouse 

Arrangements.” 

The Initial Purchasers or Placement Agents may not have completed their resale of the Notes by the 

Closing Date, which may affect the liquidity of the Notes, as well as the ability, if any, of the Initial Purchasers or 

Placement Agents to make a market in the Notes. In addition, the Initial Purchasers or Placement Agents or one or 

more of their respective Affiliates may enter into one or more derivative transactions with respect to any of the 

Notes on or after the Closing Date. 

The Issuer has agreed to indemnify the Initial Purchasers and Placement Agents against certain liabilities, 

including liabilities under the Securities Act, and has agreed to contribute to payments that the Initial Purchasers and 

Placement Agents may be required to make in respect thereof. 

No invitation, whether directly or indirectly, may be made to the public in the Cayman Islands to subscribe 

for the Notes. 

Purchasers of Notes sold outside the United States may be required to pay stamp taxes and other charges in 

accordance with the laws and practices of the country of purchase in addition to the price charged to investors for 

the Notes. 

The Notes will constitute a new issuance of securities with no established trading market. Such a market 

may or may not develop, but neither the Initial Purchasers nor the Placement Agents are under any obligation to 

make such a market, and if they do make such a market they may discontinue any market-making activities with 

respect to the Notes at any time without notice. In addition, market-making activity will be subject to the limits 

imposed by the Securities Act and the Exchange Act. Accordingly, no assurances can be made as to the liquidity of 

or the trading market for the Notes. 

135

Sandler O’Neill & Partners, L.P. may be contacted at 919 Third Avenue, 6th Floor, New York, New York 

10022, Attention: Investment Banking Group; Greenwich Capital Markets, Inc. may be contacted at 600 Steamboat 

Road, Greenwich, Connecticut 06380, Attention: CDO Desk. 

136

LISTING AND GENERAL INFORMATION 

1. Application has been made to the Irish Financial Services Regulatory Authority, as competent 

authority under the Prospectus Directive, for the Prospectus to be approved. Application has been made to the ISE 

for the Notes to be admitted to the Official List and trading on its regulated market, but there can be no assurance 

that such listing will be granted. The issuance, sale and settlement of the Notes on the Closing Date is not 

conditioned on the listing of the Notes on the ISE. Arthur Cox Listing Services Limited, in its capacity as Irish 

listing agent, is not seeking admission to listing on the ISE for purposes of the Prospectus Directive. 

2. In connection with the listing, for so long as any of the Notes are listed on the ISE and the 

following documents remain in effect, copies of the Memorandum of Association and Articles of Association of the 

Issuer, the Certificate of Incorporation and By-laws of the Co-Issuer, the Indenture, the Collateral Management 

Agreement, the Purchase Agreement, the Agency Agreement, the Administration Agreement and the Paying Agency 

Agreement for Ireland (such agreements collectively, the “Material Contracts”) will be available for inspection and 

will be obtainable in electronic format at the principal office of the Issuer and the offices of Custom House 

Administration and Corporate Services Limited (in such capacity, the “Paying Agent in Ireland”) in Dublin, Ireland, 

and copies thereof may be obtained upon request. 

3. Copies of the Memorandum of Association and Articles of Association of the Issuer, the 

Certificate of Incorporation and By-laws of the Co-Issuer, the Administration Agreement, the resolutions of the 

Board of Directors of the Issuer authorizing the issuance of the Notes, the resolutions of the Board of Directors of 

the Co-Issuer authorizing the issuance of the Class A Notes, Class B Notes and Class C Notes, the Indenture, the 

Collateral Management Agreement and the Hedge Agreements will be available for inspection during the term of 

the Class A Notes, Class B Notes, Class C Notes and Income Notes at the office of the Trustee. 

4. Each of the Co-Issuers represents that there has been no material adverse change in its financial 

position since its date of creation. 

5. The Co-Issuers are not, and have not since incorporation been, involved in any litigation, 

governmental or arbitration proceedings relating to claims in amounts which may have or have had a significant 

effect on the Co-Issuers, nor, so far as such Co-Issuers are aware, is any such litigation, governmental proceeding or 

arbitration involving them pending or threatened. 

6. The issuance of the Notes will be authorized by the Board of Directors of the Issuer by resolutions 

passed before the Closing Date. The issuance of the Class A Notes, Class B Notes and Class C Notes will be 

authorized by the Co-Issuer by the unanimous written consent of the Board of Directors before the Closing Date. 

Since the dates of their incorporation, the Co-Issuers have not commenced operations, and no financial statements 

have been prepared as of the date of this Offering Circular or will be prepared hereafter. 

7. The Issuer is not required by Cayman Islands law, and the Issuer does not intend, to publish 

annual reports and accounts. The Co-Issuer is not required by Delaware law, and the Co-Issuer does not intend, to 

publish annual reports and accounts. The Indenture, however, requires the Issuer to provide the Trustee and each 

Hedge Counterparty with written confirmation, on an annual basis, that to the best of its knowledge following 

review of the activities of the prior year, no Event of Default or Default or other matter required to be brought to the 

Trustee’s attention has occurred or, if one has, specifying the same. 

137

8. The applicable CUSIP Numbers for Rule 144A Global Securities, CUSIP (CINS) Numbers for 

Regulation S Global Securities, International Securities Identification Numbers (ISIN) and CUSIP Numbers for 

Physical Securities applicable to the Securities are as set forth below. Common Codes for clearance through 

Euroclear and Clearstream are available from the Initial Purchasers upon request. 

Notes 

CUSIP 

Numbers 

ISIN 

Numbers 

Class A-1 Floating Rate Notes: 144A Global 55312HAA7 US55312HAA77 

Class A-1 Floating Rate Notes: Reg S Global G61782AA9 USG61782AA97 

Class A-1 Floating Rate Notes: US Certificated 55312HAF6 US55312HAF64 

Class A-2 Floating Rate Notes: 144A Global 55312HAB5 US55312HAB50 

Class A-2 Floating Rate Notes: Reg S Global G61782AB7 USG61782AB70 

Class A-2 Floating Rate Notes: US Certificated 55312HAG4 US55312HAG48 

Class B Floating Rate Notes: 144A Global 55312HAC3 US55312HAC34 

Class B Floating Rate Notes: Reg S Global G61782AC5 USG61782AC53 

Class B Floating Rate Notes: US Certificated 55312HAH2 US55312HAH21 

Class C-1 Floating Rate Deferrable Interest Notes: 144A Global 55312HAD1 US55312HAD17 

Class C-1 Floating Rate Deferrable Interest Notes: Reg S Global G61782AD3 USG61782AD37 

Class C-1 Floating Rate Deferrable Interest Notes: US Certificated 55312HAJ8 US55312HAJ86 

Class C-2 Fixed Rate Deferrable Interest Notes: 144A Global 55312HAE9 US55312HAE99 

Class C-2 Fixed Rate Deferrable Interest Notes: Reg S Global G61782AE1 USG61782AE10 

Class C-2 Fixed Rate Deferrable Interest Notes: US Certificated 55312HAK5 US55312HAK59 

Subordinate Income Notes: 144A Certificated 55312JAA3 US55312JAA34 

Subordinate Income Notes: AI Certificated 55312JAB1 US55312JAB17 

Subordinate Income Notes: Reg S Certificated G6179FAA9 USG6179FAA96 

CERTAIN LEGAL MATTERS 

The validity of the Notes and certain other legal matters will be passed upon for the Issuer, the Co-Issuer, 

the Initial Purchasers and the Placement Agents by Sidley Austin Brown & Wood LLP, New York, New York. 

Certain legal matters relating to Cayman Islands law will be passed upon for the Issuer by Maples and Calder. 

Certain legal matters with respect to the Collateral Manager will be passed upon for the Collateral Manager by 

Sidley Austin Brown & Wood LLP, New York, New York. 

138

ANNEX A 

GLOSSARY OF CERTAIN DEFINED TERMS 

Set forth below are definitions of certain defined terms used in this Offering Circular. 

“Additional Amounts”: Such amounts necessary so that every net payment received by a United States 

Alien Holder of Bank Subordinated Notes, after deduction or withholding for or on account of any present or future 

tax, assessment or other governmental charge imposed upon or as a result of such payment by the United States or 

any political subdivision or taxing authority thereof or therein, will not be less than the amount such United States 

Alien Holder would have received had no such deduction or withholding been imposed. 

“Additional Interest”: Such amounts as shall be required so that the net amounts received and retained by a 

Capital Securities Issuer after paying all taxes (including withholding taxes), duties, assessments and governmental 

charges resulting from a Tax Event will equal the amount such Capital Securities Issuer would have received and 

retained had no such taxes, duties, assessments and governmental charges been imposed. 

“Administrative Action”: Any official administrative pronouncement, including any private letter ruling, 

technical advice memorandum, regulatory procedure, notice or announcement. 

“Administrative Expenses”: Amounts due from or accrued for the account of the Co-Issuers with respect to 

any Payment Date to (i) the Trustee for Trustee Expenses; (ii) the Independent accountants, agents and counsel of 

the Co-Issuers for fees and expenses; (iii) any Rating Agency for fees and expenses in connection with the rating of 

the Class A-1 Notes, Class A-2 Notes, Class B Notes, Class C-1 Notes or Class C-2 Notes (including any ongoing 

surveillance and credit estimates); (iv) the Administrator pursuant to the Administration Agreement; (v) trustee fees 

associated with the Collateral Debt Securities or related Corresponding Debentures; (vi) any other Person in respect 

of any governmental fee, charge or tax; and (vii) any other Person in respect of any other fees or expenses permitted 

under the Indenture and the documents delivered pursuant to or in connection with the Indenture and the Notes 

(including, without limitation, amounts owed by the Issuer with respect to any indemnities, the fees and expenses 

under the Collateral Administration Agreement, fees and expenses of advisors and experts retained in connection 

with Defaulted Securities, any reasonable fees and expenses incurred by the Issuer and Trustee in connection with a 

Clean Up Call, the Irish Stock Exchange fee, and SPV Trustee Expenses (the aggregate amount of such SPV Trustee 

Expenses not to exceed U.S.$7,000 per annum) but excluding the Collateral Management Fee but including other 

amounts for which the Collateral Manager may claim reimbursement pursuant to the Collateral Management 

Agreement); provided, however, that Administrative Expenses shall not include any amounts due or accrued with 

respect to the actions taken on or prior to the Closing Date in excess of U.S.$350,000 in the aggregate. 

“Administrator”: Maples Finance Limited, or any successor appointed by the Issuer. 

“Affiliate”: With respect to any specified Person, any other Person controlling or controlled by or under 

common control with such specified Person. For the purposes of this definition, “control,” when used with respect 

to any specified Person, means the power to direct the management and policies of such Person, directly or 

indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” 

and “controlled” have meanings correlative to the foregoing. For purposes of this definition, the management of an 

account by one Person for the benefit of any other Person shall not constitute “control” of such other Person and no 

entity shall be deemed an Affiliate of the Issuer or the Co-Issuer solely because the Administrator or its Affiliates 

serve as administrator or share trustee for such entity. 

“Affiliated Depository Institution”: With respect to each Bank Capital Securities Issuer, its parent bank 

holding company, thrift holding company or holding company of another depository institution whose deposits are 

insured by the FDIC. 

A-1

“Affiliated Depository Institution Indenture”: With respect to each Corresponding Debenture relating to the 

Bank Capital Securities, the indenture between the related Affiliated Depository Institution and the Debenture 

Trustee under which such Corresponding Debenture was issued. 

“Affiliated Insurance Institution”: With respect to each Insurance Capital Securities Issuer, its parent 

insurance holding company or insurance related company. 

“Affiliated Insurance Institution Indenture”: With respect to the Corresponding Debentures relating to the 

Insurance Capital Securities, the indenture between the related Affiliated Insurance Institution and the Debenture 

Trustee under which such Corresponding Debenture was issued. 

“Affiliated Insurance Institution Parent”: The parent entity of the Affiliated Insurance Institution that 

issues the Parent Guarantee and, if applicable, the Guarantee. 

“Agency Agreement”: The Private Placement Agency Agreement dated as of August 24, 2005 among the 

Issuer and the Placement Agents, as it may be amended or supplemented from time to time. 

“Aggregate Fees and Expenses”: With respect to any Payment Date, the sum of (a) the Trustee Fee with 

respect to such Payment Date and any Trustee Fee with respect to a previous Payment Date that was not paid on a 

previous Payment Date, (b) the Trustee Expenses with respect to such Payment Date and any Trustee Expenses with 

respect to a previous Payment Date that were not paid on a previous Payment Date, (c) the Collateral Management 

Fee with respect to such Payment Date and any Collateral Management Fee with respect to a previous Payment Date 

that was not paid on a previous Payment Date and (d) all expenses of the Issuer and the Co-Issuer (including 

Administrative Expenses) payable on such Payment Date in accordance with the first paragraph of the Priority of 

Payments (to the extent not included in (a), (b) and (c) above). 

“Aggregate Principal Amount”: With respect to any date of determination, (a) when used with respect to 

any Pledged Securities, the aggregate Principal Balance of such Pledged Securities on such date of determination; 

(b) when used with respect to any class of Notes, as of such date of determination, the original principal amount of 

such class, increased by, in the case of the Class C-1 Notes and the Class C-2 Notes, any Class C-1 Note Deferred 

Interest or Class C-2 Note Deferred Interest added to the principal balances thereof, and reduced by, in the case of 

all classes of Notes, all prior payments, if any, made with respect to principal of such class (including in the case of 

the Class C-1 Notes and the Class C-2 Notes, any Class C-1 Note Deferred Interest or Class C-2 Note Deferred 

Interest paid to such class); and (c) when used with respect to the Notes, the sum of the Aggregate Principal Amount 

of the Class A Notes, the Aggregate Principal Amount of the Class B Notes, the Aggregate Principal Amount of the 

Class C Notes and the Aggregate Principal Amount of the Income Notes. Payments of Class C-1 Note Deferred 

Interest will be payments of principal on the Class C-1 Notes, and payments of Class C-2 Note Deferred Interest will 

be payments of principal on the Class C-2 Notes. 

“Applicable Capital Securities Rate”: The rate (or manner of calculation of the rate) at which distributions 

on the applicable Capital Securities accrue. 

“Applicable Insurance Laws”: With respect to the Insurance Surplus Note Issuer, the insurance code and 

statutes of such Insurance Surplus Note Issuer’s state of domicile and all publicly available published regulations, 

bulletins and rulings thereunder and the order or approval of the Applicable Regulator authorizing the Insurance 

Surplus Note Issuer to issue its Insurance Surplus Note. 

“Applicable Periodic Rate”: With respect to the Class A-1 Notes, a rate equal to LIBOR for the applicable 

Periodic Interest Accrual Period plus 0.35% per annum. With respect to the Class A-2 Notes, a rate equal to LIBOR 

for the applicable Periodic Interest Accrual Period plus 0.45% per annum. With respect to the Class B Notes, a rate 

equal to LIBOR for the applicable Periodic Interest Accrual Period plus 0.60% per annum. With respect to the Class 

C-1 Notes, a rate equal to LIBOR for the applicable Periodic Interest Accrual Period plus 1.20% per annum. With 

respect to the Class C-2 Notes, a rate equal to 6.0825% per annum. 

A-2

“Applicable Regulator”: With respect to (a) any Affiliated Depository Institution or Bank Subordinated 

Note Issuer, the Board of Governors of the Federal Reserve System, in the case of bank holding companies and 

member banks, the Office of Thrift Supervision, in the case of thrift holding companies and federal savings banks, 

the Office of the Comptroller of the Currency, in the case of national charter banks, the Federal Deposit Insurance 

Corporation, in the case of state banks that are not members of the Federal Reserve System, and any other 

governmental agency with regulatory authority over the banking operations of an Affiliated Depository Institution or 

Bank Subordinated Note Issuer, if not regulated by the Board of Governors of the Federal Reserve System, the 

Office of Thrift Supervision, the Office of the Comptroller of the Currency or the FDIC and (b) the Insurance 

Surplus Note Issuer or any Affiliated Insurance Institution, the insurance regulatory authority of the state of domicile 

of such Insurance Surplus Note Issuer or the insurance company subsidiary of such Affiliated Insurance Institution, 

as the case may be. 

“Available Funds”: With respect to any Payment Date, the amount of any positive balance in both the 

Interest Collection Account and the Principal Collection Account as of the related Calculation Date plus any amount 

expected to be received with respect to the Hedge Agreements on or before such Payment Date; provided, however, 

that any Shortfall Amount transferred from the Class A/B Reserve Account to the Interest Collection Account shall 

not be included in “Available Funds”. With respect to any other date, such amount as of that date. 

“Bank Capital Securities”: Beneficial ownership interests in any Bank Capital Securities Issuer that are 

represented by preferred securities of a Bank Capital Securities Issuer that will be acquired by the Issuer. 

“Bank Capital Securities Issuer Securities”: All of the Common Securities of, and Bank Capital Securities 

issued by, a Bank Capital Securities Issuer. 

“Bank Capital Securities Issuers”: Any trust subsidiary wholly owned by an Affiliated Depository 

Institution that issues Bank Capital Securities. 

“Bank Capital Securities Special Event”: Each of a Tax Event, Investment Company Event and Capital 

Treatment Event, as applicable, with respect to the Bank Capital Securities. 

“Bank Subordinated Note Issuer”: Any bank, thrift or other depository institution or holding company of a 

bank, thrift or other depository institution. 

“Bank Subordinated Note Special Event”: means the receipt by the applicable Bank Subordinated Note 

Issuer of an opinion of counsel experienced in such matters to the effect that, as a result of any change (including 

any prospective change) in, or amendment to, the laws (or any regulations or rulings promulgated thereunder) of the 

United States or any political subdivision or taxing authority thereof or therein, or any change in the application or 

official interpretation of such laws, regulations or rulings, which change or amendment becomes effective on or after 

the original issuance date of the related Bank Subordinated Notes, there is more than an insubstantial risk that such 

Bank Subordinated Note Issuer has or will become obligated to pay Additional Amounts on such Bank Subordinated 

Notes. 

“Bank Subordinated Note Trustee”: The trustee for the Bank Subordinated Notes under the related Bank 

Subordinated Note Indenture. 

“Bank Subordinated Notes”: Any U.S. dollar-denominated subordinated notes issued by a Bank 

Subordinated Note Issuer and that will be acquired by the Issuer. 

“Business Day”: Any day that is not a Saturday, Sunday or other day on which commercial banking 

institutions in New York, New York or London, England or the city in which the Corporate Trust Office of the 

Trustee is located, are authorized or obligated by law or executive order to be closed. With respect to any act 

required of the Issuer, Business Day shall be construed to include a reference in the preceding sentence to the 

Cayman Islands; with respect to any act required of the Paying Agent in Ireland (or any act to be performed through 

the Paying Agent in Ireland), Business Day shall be construed to include a reference in the preceding sentence to 

Dublin, Ireland; with respect to the Capital Securities, Corresponding Debentures and Guarantees, Business Day 

A-3

shall be construed to substitute the reference in the preceding sentence to the city in which the Corporate Trust 

Office of the Trustee is located generally with the city in which the corporate trust office of the Debenture Trustee or 

the city in which the relevant Affiliated Depository Institution or Affiliated Insurance Institution, as applicable, is 

located; with respect to the Bank Subordinated Notes, Business Day shall be construed to substitute the reference in 

the preceding sentence to the city in which the Corporate Trust Office of the Trustee is located generally with the 

city in which the corporate trust office of the related Bank Subordinated Note Trustee or the city in which the related 

Bank Subordinated Note Issuer is located; and with respect to the Insurance Surplus Note, Business Day shall be 

construed to substitute the reference in the preceding sentence to the city in which the Corporate Trust Office of the 

Trustee is located generally with the city in which the corporate trust office of the related Insurance Surplus Note 

Trustee or the city in which the Insurance Surplus Note Issuer is located. 

“Calculation Date”: With respect to any Payment Date, the first Business Day following the last day of the 

Due Period with respect to such Payment Date. 

“Capital Securities”: Except as otherwise specified, the Bank Capital Securities and the Insurance Capital 

Securities. 

“Capital Securities Issuers”: Except as otherwise specified, the Bank Capital Securities Issuers and the 

Insurance Capital Securities Issuer. 

“Capital Securities Issuer Securities”: The Bank Capital Securities Issuer Securities or the Insurance 

Capital Securities Issuer Securities, as the context requires. 

“Capital Securities Payment Date”: Each date, specified in the applicable Declaration, on which 

distributions relating to the Capital Securities issued thereunder are payable, subject to the applicable Business Day 

convention. 

“Capital Securities Special Event”: Each of a Bank Capital Securities Special Event and an Insurance 

Capital Securities Special Event, as applicable. 

“Capital Treatment Event”: With respect to (a) an Affiliated Depository Institution that is a bank holding 

company, the receipt by such Affiliated Depository Institution and its Bank Capital Securities Issuer of an opinion of 

counsel experienced in such matters to the effect that, as a result of any amendment to, or change in, the laws, rules 

or regulations of the United States or any political subdivision thereof or therein, or as the result of any official or 

administrative pronouncement or action or decision interpreting or applying such laws, rules or regulations, which 

amendment or change is effective or which pronouncement, action or decision is announced on or after the date of 

original issuance of the related Corresponding Debentures, there is more than an insubstantial risk that such 

Affiliated Depository Institution will not, within 90 days of the date of such opinion, be entitled to treat an amount 

equal to the liquidation amount of the related Bank Securities as “Tier 1 Capital” (or the then equivalent thereof) for 

purposes of the capital adequacy guidelines of the Federal Reserve (or any successor regulatory authority with 

jurisdiction over bank holding companies), as then in effect and applicable to such Affiliated Depository Institution; 

provided, however, that the distribution of Corresponding Debentures in connection with the liquidation of any Bank 

Capital Securities Issuer by its parent Affiliated Depository Institution shall not in and of itself constitute a Capital 

Treatment Event unless such liquidation shall have occurred in connection with a Tax Event or an Investment 

Company Event or (b) an Affiliated Depository Institution that is a thrift holding company or other holding company 

of a depository institution, the receipt by such Affiliated Depository Institution and its Bank Capital Securities Issuer 

of an opinion of counsel experienced in such matters to the effect that, as a result of (1) any amendment to, or 

change in, the laws, rules or regulations of the United States or any political subdivision thereof or therein, or any 

rules, guidelines or policies of an applicable regulatory authority for such Affiliated Depository Institution or (2) any 

official or administrative pronouncement or action or decision interpreting or applying such laws, rules or 

regulations, which amendment or change is effective or which pronouncement, action or decision is announced on 

or after the date of original issuance of such Corresponding Debentures, there is more than an insubstantial risk that 

such Affiliated Depository Institution will not, within 90 days of the date of such opinion, be entitled to treat an 

amount equal to the liquidation amount of the related Bank Capital Securities as “Tier 1 Capital” (or its then 

equivalent if such Affiliated Depository Institution were subject to such capital requirement) applied as if such 

Affiliated Depository Institution (or its successors) were a bank holding company for purposes of the capital 

A-4

adequacy guidelines of the Federal Reserve (or any successor regulatory authority with jurisdiction over bank 

holding companies), or any capital adequacy guidelines as then in effect and applicable to such Affiliated 

Depository Institution; provided, however, that the distribution of Corresponding Debentures in connection with the 

liquidation of the Bank Capital Securities Issuer by its parent Affiliated Depository Institution shall not in and of 

itself constitute a Capital Treatment Event unless such liquidation shall have occurred in connection with a Tax 

Event or an Investment Company Event. 

“Class A Notes”: The Class A-1 Notes and the Class A-2 Notes. 

“Class A-1 Notes”: U.S.$162,000,000 Class A-1 Floating Rate Notes Due 2035 and having the terms 


“Class A-2 Notes”: U.S.$19,500,000 Class A-2 Floating Rate Notes Due 2035 and having the terms 


Test. 

herein. 

“Class A/B Coverage Tests”: The Class A/B Interest Coverage Test and the Class A/B Principal Coverage 

“Class B Notes”: U.S.$33,000,000 Class B Floating Rate Notes Due 2035 and having the terms described 

“Class C Coverage Tests”: The Class C Interest Coverage Test and the Class C Principal Coverage Test. 

“Class C Notes”: The Class C-1 Notes and the Class C-2 Notes. 

“Class C-1 Notes”: U.S.$35,475,000 Class C-1 Floating Rate Deferrable Interest Notes Due 2035 and 

having the terms described herein. 

“Class C-2 Notes”: U.S.$35,475,000 Class C-2 Fixed Rate Deferrable Interest Notes Due 2035 and having 

the terms described herein. 

“Clearstream”: Clearstream Banking, société anonyme, a corporation organized under the laws of the 

Grand Duchy of Luxembourg. 

“Closing Date”: September 8, 2005. 

“Code”: The United States Internal Revenue Code of 1986, as amended. 

“Co-Issuer”: MMCapS Funding XVII, Corp., a Delaware corporation. 

“Co-Issuers”: The Issuer and the Co-Issuer. 

“Collateral Administration Agreement”: The agreement dated as of the Closing Date among the Issuer, the 

Collateral Manager and JPMorgan Chase Bank, National Association, in its capacity as collateral administrator. 

“Collateral Debt Securities Issuer”: Each of a Capital Securities Issuer, a Bank Subordinated Note Issuer 

and an Insurance Surplus Note Issuer, as applicable. 

“Collection Accounts”: Collectively, the Interest Collection Account and the Principal Collection Account. 

“Collections”: With respect to any Payment Date, the sum of the Interest Collections and Principal 

Collections with respect to the relevant Calculation Date. 

“Common Securities”: Beneficial ownership interests in any Capital Securities Issuer represented by 

common securities of such Capital Securities Issuer. 

A-5

“Corporate Trust Office”: The principal corporate trust office of the Trustee currently located at 600 

Travis Street, 50th Floor, JPMorgan Chase Tower, Houston, Texas 77002, Attention: Worldwide Securities 

Services (Houston) – MMCapS Funding XVII, Ltd., telephone: (713) 216-4181, or at such other address as the 

Trustee may designate from time to time by notice to the Noteholders and the Issuer or the principal corporate trust 

office of any successor Trustee. 

“Corresponding Debentures”: Any of the junior subordinated debt securities issued pursuant to an 

Affiliated Depository Institution Indenture or an Affiliated Insurance Institution Indenture, as the case may be, and 

purchased by a Capital Securities Issuer from the parent Affiliated Depository Institution or Affiliated Insurance 

Institution, as the case may be, of such Capital Securities Issuer with the proceeds from the sale of its Capital 

Securities and Common Securities. 

“Coverage Tests”: The Class A/B Coverage Tests and the Class C Coverage Tests. 

“Credit Risk Security”: Any Collateral Debt Security that in the Collateral Manager’s reasonable business 

judgment, has a significant risk of declining in credit quality and, with lapse of time, becoming a Defaulted Security 

(but not including any Collateral Debt Security which has become a Defaulted Security). 

“Debenture Trustee”: The trustee for the Corresponding Debentures under the related Affiliated 

Depository Institution Indenture or Affiliated Insurance Institution Indenture, as the case may be. 

“Declaration”: Any Amended and Restated Declaration of Trust pursuant to which a Capital Securities 

Issuer issues Capital Securities. 

“Declaration Event of Default”: An event of default under the applicable Affiliated Depository Institution 

Indenture or the Affiliated Insurance Institution Indenture, as applicable. 

“Declining Premium Special Redemption Price”: A fixed percentage of the principal amount of the 

Corresponding Debentures, Bank Subordinated Notes or Insurance Surplus Note to be redeemed as specified in the 

related Affiliated Depository Institution Indenture, Bank Subordinated Note Indenture or Insurance Surplus Note 

Indenture, as applicable, declining ratably from their original issuance date until such time as such Corresponding 

Debentures, Bank Subordinated Notes or Insurance Surplus Note are subject to optional redemption at 100% of the 

principal amount thereof, in each case plus accrued and unpaid interest thereon to the Redemption Date. 

“Defaulted Interest”: Any interest due and payable in respect of any Note that is not punctually paid or 

duly provided for on the applicable Payment Date or at the Stated Maturity Date for such Note and any interest 

accrued thereon at the Applicable Periodic Rate (to the extent permitted by applicable law). Defaulted Interest will 

not include Class C-1 Note Deferred Interest or Class C-2 Note Deferred Interest. 

“Defaulted Security”: Any (a) Pledged Security in the Trust Estate with respect to which there has 

occurred and is continuing any default or event of default under the related Underlying Instrument or any other 

obligation of the issuer of such Pledged Security ranking pari passu or senior to the Underlying Instrument which 

results in the acceleration or entitles the holders of such Pledged Security, with the giving of notice or passage of 

time or both, to accelerate the maturity of all or a portion of the principal amount of such Pledged Security (but any 

such security shall be considered a “Defaulted Security” only until such time as the default or event of default has 

been cured or waived), (b) Capital Securities with respect to which any Deferred Interest remains outstanding 

(whether during or after an applicable Extension Period), (c) Collateral Debt Securities that are not repaid in full at 

their maturity, whether as a result of action or inaction by the Applicable Regulator or otherwise, and (d) Collateral 

Debt Securities with respect to which a DS Avoidance Event has occurred; provided, however, no Collateral Debt 

Security shall be a “Defaulted Security” (i) once any default or event of default under an instrument ranking pari 

passu or senior to the Collateral Debt Security or Corresponding Debenture or any DS Avoidance Event has been 

cured or waived, (ii) if any proposal giving rise to a DS Avoidance Event is withdrawn, or (iii) if any exchange of 

any instrument other than a Collateral Debt Security or Corresponding Debenture giving rise to a DS Avoidance 

Event is effected thereunder and the Trustee receives an opinion from an Independent investment bank (which may 

be Sandler O’Neill & Partners, L.P., Greenwich Capital Markets, Inc. or an Affiliate of either party) opining that the 

A-6

issuer of Collateral Debt Securities or its Affiliated Depository Institution or Affiliated Insurance Institution, as 

applicable, is not in default with respect to all other instruments ranking pari passu or senior to the Collateral Debt 

Security or Corresponding Debenture and not in default under the instrument received in the exchange. Notification 

will be sent to S&P by the Collateral Manager promptly after the Collateral Manager obtains actual knowledge of 

the occurrence of any event described in clause (i), (ii) or (iii) in the preceding sentence. Fees and expenses of any 

firm so retained shall be Administrative Expenses payable in accordance with the Priority of Payments. For purposes 

of this definition, the Insurance Surplus Note will constitute a “Defaulted Security” if the Insurance Surplus Note 

Issuer fails to make a scheduled payment of interest or principal on its Insurance Surplus Note as a result of a 

Payment Restriction, even though either such failure will not constitute an event of default under the Insurance 

Surplus Note Indenture with the giving of notice or the passage of time or both. 

“Deferred Interest”: Any (a) distribution or interest payment on any Capital Securities or the 

Corresponding Debentures that has not been made in cash as a result of the existence of an Extension Period with 

respect to the related Corresponding Debentures (including interest on such unpaid distributions or interest) and (b) 

interest payment on any Insurance Surplus Note that has not been paid in cash as a result of the existence of a 

Payment Restriction. 

“Distributions”: Any of the amounts paid at any time with respect to the Collateral Debt Securities. 

“DS Avoidance Event”: Any (i) bankruptcy, insolvency or receivership proceeding that has been initiated 

with respect to the issuer of Collateral Debt Securities or its Affiliated Depository Institution or Affiliated Insurance 

Institution, as applicable, or (ii) proposed or effected distressed exchange or other debt restructuring in which the 

issuer of Collateral Debt Securities or its Affiliated Depository Institution or Affiliated Insurance Institution, as 

applicable, has offered the holder of a Collateral Debt Security or Corresponding Debenture or any debt ranking pari 

passu or senior to such security a new security or package of securities that in the reasonable judgment of any 

Rating Agency has the purpose of helping the issuer of Collateral Debt Securities or its Affiliated Depository 

Institution or Affiliated Insurance Institution, as applicable, to avoid default thereunder. 

“Due Period”: With respect to any Payment Date, the period ending on the 23rd calendar day of the month 

preceding the month in which such Payment Date occurs (or the next Business Day following the 23rd calendar day 

if such date is not a Business Day) or, in the case of payments pursuant to any Hedge Agreement, ending on such 

Payment Date (or ending on the day preceding such Payment Date, in the case of a Due Period that is applicable to 

the Final Maturity Date relating to a particular Class of Notes), and in each case commencing on the calendar day 

following the end of the prior Due Period (or commencing on the Closing Date, in the case of the Due Period 

relating to the first Payment Date). 

“Eligible Investment”: Any U.S. dollar denominated investment that is one or more of the following 

obligations or securities: 

(a) direct registered obligations of, and registered obligations fully guaranteed by, the United 

States of America, or any agency or instrumentality of the United States of America the obligations of which are 

backed by the full faith and credit of the United States of America; 

(b) demand and time deposits in, and certificates of deposit of, any depository institution or 

trust company (including the Trustee) incorporated under the laws of the United States of America or any state 

thereof and subject to supervision and examination by federal and/or state banking authorities so long as the 

commercial paper and/or other debt obligations of such depository institution or trust company (or, in the case of the 

principal depository institution in a holding company system, the commercial paper or debt obligations of such 

holding company) at the time of such investment or the contractual commitment providing for such investment have 

a credit rating of Aa2 or better by Moody’s, AA or better by S&P and AA or better by Fitch, in the case of debt 

obligations other than commercial paper, or a short-term credit rating of P-1 or better and a long-term credit rating 

of A1 or better by Moody’s, a short-term credit rating of A-1+ by S&P and a short-term credit rating of F1+ or 

better by Fitch, in the case of commercial paper; 

(c) registered securities bearing interest or sold at a discount issued by any U.S. corporation 

under the laws of the United States of America or any state thereof that have a credit rating of Aa2 or better by 

A-7

Moody’s, AA or better by S&P and AA or better by Fitch at the time of such investment or the contractual 

commitment providing for such investment; 

(d) repurchase obligations with respect to any security described in clause (a) above, entered 

into with a depository institution or trust company (acting as principal) described in clause (b) above or entered into 

with a corporation (acting as principal) whose short-term debt has a credit rating of P-1 or better by Moody’s and 

A-1+ or better by S&P at the time of such investment in the case of any repurchase obligation for a security having a 

maturity not more than 183 days from the date of its issuance or whose long-term debt has a credit rating of Aa2 or 

better by Moody’s and AA by S&P at the time of such investment in the case of any repurchase obligation for a 

security having a maturity more than 183 days from the date of its issuance, or whose short-term debt has a credit 

rating of F1 or better by Fitch at the time of such investment in the case of any repurchase obligation for a security 

having a maturity less than 30 days from the date of its issuance or F1+ or better by Fitch at the time of such 

investment in the case of any repurchase obligation for a security having a maturity more than thirty days (but less 

than 365 days) from the date of its issuance; 

(e) commercial paper having at the time of such investment a short-term credit rating of P-1 

or better by Moody’s and A-1+ or better by S&P and a long-term credit rating of A1 or better by Moody’s and a 

short-term credit rating of F1 or better by Fitch and that has a maturity of not more than 183 days from its date of 

issuance; provided, however, that in the case of commercial paper with a maturity of longer than 91 days, the issuer 

of such commercial paper (or, in the case of a principal depository institution in a holding company system, the 

holding company of such system), if rated by Moody’s, must have at the time of such investment a long-term credit 

rating of Aa2 or better by Moody’s, AA or better by Fitch and AA or better by S&P; and 

(f) offshore money market funds with respect to any investments having, at the time of such 

investment, a money market credit rating of not less than Aa by Moody’s; so long as the Class A-1 Notes or the 

Class A-2 Notes are Outstanding and rated by S&P, AAAm by S&P; and, AAA or AAA/V1+ by Fitch; 

provided, however, that Eligible Investments purchased with funds deposited in the Class A/B Reserve Account or 

the Collection Accounts during any Due Period shall be held until maturity except as otherwise specifically provided 

herein and shall include only such obligations or securities as mature no later than the Business Day prior to the 

related Payment Date unless such Eligible Investments are issued by the Trustee in its capacity as a banking 

institution, in which event such Eligible Investments may mature on such Payment Date; and provided further, that 

(1) none of the foregoing obligations or securities shall constitute Eligible Investments if all, or substantially all, of 

the remaining amounts payable thereunder shall consist of interest and not principal payments, (2) Eligible 

Investments shall not include an obligation or security that is subject to U.S. withholding tax or foreign withholding 

tax unless, in the case of foreign withholding tax, the issuer of the obligation or security is required to make “gross 

up” payments for the full amount of such foreign withholding tax, (3) Eligible Investments shall not include an 

obligation or security that has an S&P rating which contains a “p”, “pi”, “q”, “r” or “t” subscript, (4) Eligible 

Investments shall not include “mortgage-backed securities,” (5) Eligible Investments shall not include an obligation 

or security purchased at a price in excess of 100% of par, (6) Eligible Investments shall not include an obligation or 

security subject to substantial non-credit related risk, as determined by the Collateral Manager in its commercially 

reasonable business judgment and (7) Eligible Investments shall not include an obligation or security subject to an 

outstanding offer to purchase or acquire such security or obligation. Eligible Investments may include Eligible 

Investments for which any of the Trustee, the Collateral Manager, the Initial Purchasers, the Placement Agents or 

their respective Affiliates provide services. 

“Euroclear”: Euroclear S.A./N.V., as operator of the Euroclear System. 

“Event of Default”: Any of the events defined as Events of Default under the Indenture. See “Legal 

Structure— The Indenture— Events of Default.” 

“Excess Sale Proceeds”: The amount, if any, by which (x) the sum of (without duplication) (i) Sale 

Proceeds received from a sale of Collateral in connection with an Optional Notes Redemption, (ii) any amounts paid 

to the Issuer by each Hedge Counterparty in connection with any termination of the Hedge Agreements in 

connection with such Optional Notes Redemption, and (iii) any other funds in the Interest Collection Account, 

Principal Collection Account, Class A/B Reserve Account, Expense Reserve Account and Semiannual Receipts 

A-8

Account, exceeds (y) the sum of (without duplication) (A) the aggregate Optional Note Redemption Price of all 

Class A Notes, Class B Notes and Class C Notes then being redeemed, (B) any amounts owed by the Issuer to each 

Hedge Counterparty in connection with any termination of the Hedge Agreements in connection with such Optional 

Notes Redemption and (C) all other amounts due and payable under the Indenture in connection with such Optional 

Notes Redemption (other than any amounts payable on the Income Notes). 

“Exchange Act”: The United States Securities Exchange Act of 1934, as amended. 

“Expense Reserve Account”: The expense reserve account established by the Trustee pursuant to the 

Indenture for use to pay certain Administrative Expenses on or before each Payment Date. 

“Extension Period”: The period during which the applicable Affiliated Depository Institution or Affiliated 

Insurance Institution defers its payments of interest on any of its Corresponding Debentures for a maximum of five 

consecutive annual periods or equivalent semiannual or quarterly periods; provided, however, that generally no 

Extension Period may extend beyond the maturity date, optional redemption date or special redemption date of the 

related Capital Securities issued by the subsidiary Capital Securities Issuer of such Affiliated Depository Institution 

or Affiliated Insurance Institution, as the case may be, or end on a date other than a Capital Securities Payment Date. 

“Federal Reserve”: The Board of Governors of the Federal Reserve System. 

“Final Maturity Date”: Any of the Class A-1 Final Maturity Date, the Class A-2 Final Maturity Date, the 

Class B Final Maturity Date, the Class C-1 Final Maturity Date, the Class C-2 Final Maturity Date or the Income 

Note Final Maturity Date, as the context may require. 

“Fitch”: Fitch, Inc. and any successors thereto. 

“Fixed/Floating Rate Bank Capital Securities”: As of any date of determination, outstanding Bank Capital 

Securities that accrue distributions at a fixed rate during the Fixed Rate Period and thereafter at a floating rate. 

“Fixed/Floating Rate Collateral Debt Securities”: As of any date of determination, outstanding Collateral 

Debt Securities that accrue distributions or bear interest at a fixed rate during the Fixed Rate Period and thereafter at 

a floating rate. 

“Fixed Rate Bank Capital Securities”: As of any date of determination, outstanding Bank Capital 

Securities that accrue distributions at a fixed rate. 

“Fixed Rate Bank Subordinated Notes”: As of any date of determination, outstanding Bank Subordinated 

Notes that bear interest at a fixed rate. 

“Fixed Rate Collateral Debt Securities”: As of any date of determination, outstanding Collateral Debt 

Securities that accrue distributions or bear interest at a fixed rate. 

“Fixed Rate Insurance Capital Securities”: As of any date of determination, outstanding Insurance Capital 

Securities that accrue distributions at a fixed rate. 

“Fixed Rate Period”: The period during which any Fixed/Floating Rate Collateral Debt Securities or 

Fixed/Floating Rate Bank Capital Securities accrue distributions or bear interest at a fixed rate. 

“Floating Rate Bank Capital Securities”: As of any date of determination, outstanding Bank Capital 

Securities that accrue distributions at a floating rate. 

“Floating Rate Bank Subordinated Notes”: As of any date of determination, outstanding Bank 

Subordinated Notes that bear interest at a floating rate. 

A-9

“Floating Rate Collateral Debt Securities”: As of any date of determination, outstanding Collateral Debt 

Securities that accrue distributions or bear interest at a floating rate. 

“Floating Rate Insurance Capital Securities”: As of any date of determination, outstanding Insurance 

Capital Securities that accrue distributions at a floating rate. 

“Global Note”: A Rule 144A Global Note, a Temporary Regulation S Global Note or a Regulation S 

Global Note. 

“Guarantee”: With respect to a Capital Securities Issuer, the limited and subordinated guarantee by its 

Affiliated Depository Institution or Affiliated Insurance Institution or Affiliated Insurance Institution Parent, as the 

case may be, to holders of Capital Securities issued by such Capital Securities Issuer for certain payments described 

under “Security for the Notes— Description of the Bank Capital Securities— Terms of the Guarantees,” and 

“Security for the Notes— Description of the Insurance Capital Securities— Terms of the Guarantees,” to the extent 

such Capital Securities Issuer shall have funds legally available therefor. 

“Hedge Agreements”: Two interest rate protection agreements with the Hedge Counterparty consisting of 

an interest rate swap and an interest rate cap and any replacements therefor entered into in accordance with the 

Indenture. 

“Hedge Counterparty”: Initially, Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A., and thereafter 

any of (i) one or more institutions which, at the time it becomes a party to the related Hedge Agreement, (x) has a 

short-term issuer credit rating by Fitch that is not lower than “F1” and a long-term issuer credit rating by Fitch that is 

not lower than “A”, or if no short-term rating is available, has a long-term issuer credit rating by Fitch that is not 

lower than “A” and (y) has a short-term rating by Moody’s that is not lower than “P-1” and a long-term rating by 

Moody’s that is not lower than “Al” and has not been placed on credit watch with negative implications by Moody’s 

and (z) has a short-term issuer credit rating by S&P that is not lower than “A-1”, or if no short-term rating is 

available, has a long-term issuer credit rating by S&P that is not lower than “A+” and with respect to which each of 

the Rating Agencies confirms in writing that its then-current rating on any Class of Notes rated by such Rating 

Agency will not be adversely affected, or (ii) any permitted assignee or successor under such Hedge Agreement with 

respect to which each of the Rating Agencies confirms in writing that its then-current rating on any Class of Notes 

rated by such Rating Agency will not be adversely affected. The address of Coöperatieve Centrale Raiffeisen- 

Boerenleenbank B.A., the initial Hedge Counterparty, is Investment Banking Services, Transaction Processing, 

OTC-Derivatives UC-O-311, Croeselaan 18, Utrecht, The Netherlands. 

“Hedge Priority Event”: The occurrence of (a) any Hedge Agreement Event of Default or Hedge 

Agreement Termination Event other than a Hedge Agreement Event of Default or Hedge Agreement Termination 

Event with respect to which the relevant Hedge Counterparty is the Defaulting Party or the sole Affected Party (as 

such terms are defined in the ISDA Master Agreement) and (b) a reduction in the Swap Notional Amount resulting 

in a Hedge Reduction. 

“Holder” or “Noteholder”: With respect to any Note, the Person in whose name such Note is registered in 

the Note Register. 

“Income Note Final Maturity Date”: The Payment Date following the date on which the final payment of 

principal and interest is made with respect to all of the Collateral Debt Securities (including recoveries in connection 

with defaulted Collateral Debt Securities) or the Collateral Debt Securities are liquidated, and if defaulted Collateral 

Debt Securities are Outstanding at such time, the Trustee has certified to the Issuer that further recovery efforts with 

respect to such defaulted Collateral Debt Securities would not be prudent and it has been unable to sell or otherwise 

liquidate such defaulted Collateral Debt Securities at any price. 

herein. 

“Income Notes”: U.S.$27,000,000 Subordinate Income Notes Due 2035 and having the terms described 

A-10

“Indenture”: The Indenture dated as of the Closing Date among the Issuer, the Co-Issuer and the Trustee, 

pursuant to which the Notes will be issued, as it may be amended or supplemented from time to time. 

“Independent”: When used with respect to any specified Person, means such a Person that (a) is in fact 

independent of either of the Co-Issuers and any other obligor upon the Notes and the Collateral Manager or any 

Affiliate of either of the Co-Issuers or such other obligor or the Collateral Manager, (b) does not have and is not 

committed to acquire any direct financial interest or any material indirect financial interest in either of the Co- 

Issuers or in any such other obligor or the Collateral Manager or in an Affiliate of either of the Co-Issuers or such 

other obligor or the Collateral Manager, and (c) is not connected with either of the Co-Issuers or any such other 

obligor or the Collateral Manager or any Affiliate of either of the Co-Issuers or such other obligor or the Collateral 

Manager as an officer, employee, promoter, underwriter, trustee, partner, director or person performing similar 

functions. “Independent” when used with respect to any accountant may include an accountant who audits the 

books of such Person if in addition to satisfying the criteria set forth above the accountant is independent with 

respect to such Person within the meaning of Rule 101 of the Code of Ethics of the American Institute of Certified 

Public Accountants. 

“Initial Purchasers”: Sandler O’Neill & Partners, L.P. and Greenwich Capital Markets, Inc. 

“Insolvency Law”: With respect to the Insurance Surplus Note Issuer, the provisions of the insurance 

insolvency rehabilitation and liquidation statutes of such Insurance Surplus Note Issuer’s state of domicile and all 

published regulations, bulletins and rulings thereunder. 

“Institutional Trustee”: The trustee for the Capital Securities under the related Declaration. 

“Insurance Capital Securities”: Beneficial ownership interests in the Insurance Capital Securities Issuer 

that are represented by preferred securities of the Insurance Capital Securities Issuer that will be acquired by the 

Issuer. 

“Insurance Capital Securities Issuer Securities”: All of the Common Securities of, and Insurance Capital 

Securities issued by, the Insurance Capital Securities Issuer. 

“Insurance Capital Securities Issuers”: Any trust subsidiary wholly owned by an Affiliated Insurance 

Institution that issues Insurance Capital Securities. 

“Insurance Capital Securities Special Event”: Each of a Tax Event and Investment Company Event, as 

applicable, with respect to the Insurance Capital Securities. 

“Insurance Surplus Note Issuer”: The insurance company that issues the Insurance Surplus Note. 

“Insurance Surplus Note Special Event”: means, with respect to the Insurance Surplus Note, the receipt by 

the Insurance Surplus Note Issuer of an opinion of counsel experienced in such matters to the effect that, as a result 

of any amendment to or change (including any announced prospective change) in the laws or any regulations 

thereunder of the United States or any political subdivision or taxing authority thereof or therein, or as a result of 

any official administrative pronouncement (including any private letter ruling, technical advice memorandum, 

regulatory procedure, notice or announcement (an “Administrative Action”)) or judicial decision interpreting or 

applying such laws or regulations, regardless of whether such Administrative Action or judicial decision is issued to 

or in connection with a proceeding involving the Insurance Surplus Note Issuer and whether or not subject to review 

or appeal, which amendment, clarification, change, Administrative Action or decision is enacted, promulgated or 

announced, in each case on or after the date of original issuance of the Insurance Surplus Note, there is more than an 

insubstantial risk that interest payable by the Insurance Surplus Note Issuer on its Insurance Surplus Note is not, or 

within 90 days of the date of such opinion, will not be, deductible by the Insurance Surplus Note Issuer, in whole or 

in part, for United States federal income tax purposes. 

“Insurance Surplus Note Trustee”: The trustee for the Insurance Surplus Note under the Insurance Surplus 

Note Indenture. 

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“Insurance Surplus Note”: The U.S. dollar-denominated surplus note issued by the Insurance Surplus Note 

Issuer and that will be acquired by the Issuer. 

“Interest Collection Account”: The interest collection account established by the Trustee pursuant to the 

Indenture for use in connection with the collection and disbursement of Interest Collections. 

“Interest Collections”: As of any date of determination, the sum of (i) all payments of interest with respect 

to any Collateral Debt Securities (excluding all amounts received on Defaulted Securities) in the Trust Estate 

(including all receipts of accrued interest, as well as all payments (other than principal or premiums) received 

pursuant to a consent or similar solicitation), and other amounts specified in the Indenture to be Interest Collections, 

that in each case were received during the related Due Period, but excluding any such payments of interest deposited 

into the Semiannual Receipts Account during such Due Period pursuant to the Indenture, (ii) all amounts transferred 

from the Semiannual Receipts Account to the Interest Collection Account on the first Business Day of such Due 

Period pursuant to the Indenture, (iii) the reinvestment income, if any, in the Collection Accounts which is received 

during such Due Period, (iv) all amendment and waiver fees, all late payment fees, all commitment fees and all other 

fees and commissions received during such Due Period (other than fees and commissions received in connection 

with the purchase of Collateral Debt Securities), (v) all amounts received in connection with the Hedge Agreements 

other than amounts applied or to be applied to enter into replacement Hedge Agreements, (vi) the Shortfall Amount 

transferred from the Class A/B Reserve Account to the Interest Collection Account for such Payment Date, (vii) on 

the first Payment Date after the Aggregate Principal Amounts of the Class A Notes and the Class B Notes have been 

reduced to zero, all amounts on deposit in the Class A/B Reserve Account, (viii) on the first Payment Date after the 

reduction of the Principal Balance of the Collateral Debt Securities to zero, all amounts on deposit in the Expense 

Reserve Account and (ix) after the Class A/B Reserve Account is closed, any prepayment premiums received in 

connection with a redemption of Collateral Debt Securities. 

“Interest Coverage Amount”: As of any Calculation Date, an amount equal to the sum of (a) the aggregate 

amount of Interest Collections received during the related Due Period, plus (b) the amount on deposit in the Class 

A/B Reserve Account as of such Calculation Date, plus (c) any amounts received or due to be received from each 

Hedge Counterparty after the prior Payment Date (or Closing Date in the case of the first Payment Date) and on or 

before the related Payment Date, minus (d) any amounts paid or due to be paid to each Hedge Counterparty after the 

prior Payment Date (or Closing Date in the case of the first Payment Date) and on or before the related Payment 

Date, minus (e) the amount expected to be payable as Aggregate Fees and Expenses on the Payment Date 

immediately following such Calculation Date For purposes of calculating the Interest Coverage Amount, Interest 

Collections will not include any unpaid Deferred Interest. 

“Investment Company Act”: The United States Investment Company Act of 1940, as amended. 

“Investment Company Event”: The receipt by an Affiliated Depository Institution or Affiliated Insurance 

Institution, as applicable, and its subsidiary Capital Securities Issuer of an opinion of counsel experienced in such 

matters to the effect that, as a result of a change in law or regulation or written change in interpretation or 

application of law or regulation by any legislative body, court, governmental agency or regulatory authority, there is 

more than an insubstantial risk that such Capital Securities Issuer is, or within 90 days of the date of such opinion 

will be, considered an “investment company” that is required to be registered under the Investment Company Act, 

which change (or prospective change) becomes effective or would become effective, as the case may be, on or after 

the date of the original issuance of the related Corresponding Debentures. 

“Issuer”: MMCapS Funding XVII, Ltd., an exempted company with limited liability incorporated under 

the laws of the Cayman Islands, and its permitted successors and assigns. 

“LIBOR”: The London interbank offered rate. 

“Liquidation”: Any voluntary or involuntary liquidation, dissolution, winding-up or termination of a 

Capital Securities Issuer. 

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“Liquidation Distribution”: Upon Liquidation of the issuing Capital Securities Issuer, distributions on the 

related Capital Securities equal to the liquidation amount thereof plus accrued and unpaid distributions thereon. 

“Listed Bidder”: In connection with an Auction, any of the Qualified Bidders, the Income Noteholders, the 

Trustee or any of their respective Affiliates designated as a potential bidder by them in writing to the Collateral 

Manager. 

“Majority Noteholders”: The Holders of more than 50% of the Aggregate Principal Amount of the Class A- 

1 Notes, so long as any Class A-1 Notes remain Outstanding, and thereafter the Holders of more than 50% of the 

Aggregate Principal Amount of the Class A-2 Notes, so long as any Class A-2 Notes remain Outstanding, and 

thereafter the Holders of more than 50% of the Aggregate Principal Amount of the Class B Notes, so long as any 

Class B Notes remain Outstanding, and thereafter the Holders of more than 50% of the Aggregate Principal Amount 

of the Class C Notes (treating the Class C-1 Notes and the Class C-2 Notes as a single Class for this purpose), so 

long as any Class C Notes remain Outstanding, and thereafter the Holders of more than 50% of the Aggregate 

Principal Amount of the Income Notes. 

“Make-Whole Special Redemption Price”: An amount generally determined as the greater of (i) 100% of 

the principal amount of the Corresponding Debentures or Bank Subordinated Notes to be redeemed and (ii) the sum 

of the present values of the remaining payments of principal and interest (excluding accrued and unpaid interest to 

the Redemption Date) thereon calculated as specified in the related Affiliated Depository Institution Indenture, 

Affiliated Insurance Institution Indenture or Bank Subordinated Note Indenture or, as applicable, over the 

Remaining Life, discounted to the Redemption Date on the payment frequency for such Corresponding Debentures 

or Bank Subordinated Notes (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate 

plus a spread specified in such Affiliated Depository Institution Indenture, Affiliated Insurance Institution Indenture 

or Bank Subordinated Note Indenture, as applicable, until such time as such Corresponding Debentures, Bank 

Subordinated Notes or the Insurance Surplus Note are subject to optional redemption at 100% of the principal 

amount thereof, in each case plus accrued and unpaid interest thereon to the Redemption Date. 

“Mandatory Auction Call”: A mandatory redemption of the Notes as set forth in “Description of the 

Notes— Mandatory Auction Call.” 

“Moody’s”: Moody’s Investors Service, Inc. and any successors thereto. 

“Non-Permitted Holder”: Either (i) a U.S. Person (other than a QIB/QP) that becomes the beneficial owner 

of any Global Note or (ii) a Person for which the representations made by such Person in the ERISA section in any 

representation letter or certificate required to be delivered by such Person are untrue. 

“non-U.S. Person”: A Person other than a U.S. Person. 

“Note Register”: Any note register in which the Issuer records the holders of the Notes pursuant to the 

Indenture. 

“Note Registrar”: JPMorgan Chase Bank, National Association, as note registrar under the Indenture. 

“Note Valuation Report”: The Note Valuation Report described in and required pursuant to the Indenture. 

“Noteholder”: A Holder. 

“Notes”: The Class A Notes, the Class B Notes, the Class C Notes, and the Income Notes. 

“Offshore Transaction”: An “offshore transaction” within the meaning of Regulation S. 

“Optional Redemption Price”: With respect to (i) Corresponding Debentures, the redemption price of the 

Corresponding Debentures required to be paid by the applicable Affiliated Depository Institution or Affiliated 

Insurance Institution, as the case may be, to its subsidiary Capital Securities Issuer and by such Capital Securities 

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Issuer to redeem its Capital Securities Issuer Securities in the event of a redemption prior to maturity other than as a 

result of a Capital Securities Special Event, (ii) Bank Subordinated Notes, the redemption price required to be paid 

by the applicable Bank Subordinated Note Issuer in the event of a redemption prior to maturity other than as a result 

of a Bank Subordinated Note Special Event or (iii) Insurance Surplus Note, the redemption price required to be paid 

by the Insurance Surplus Note Issuer in the event of a redemption prior to maturity other than as a result of an 

Insurance Surplus Note Special Event and which, in each case, will generally be equal to 100% of the principal 

amount thereof (but, in certain cases, may include a premium) plus accrued and unpaid interest to the Redemption 

Date. 

“Optional Note Redemption Price”: When used with respect to any Class A Note, Class B Note or Class C 

Note to be redeemed, an amount equal to 100% of the Aggregate Principal Amount to be redeemed (which in the 

case of the Class C-1 Notes and the Class C-2 Notes, includes any unpaid Class C-1 Note Deferred Interest and 

Class C-2 Note Deferred Interest), plus accrued and unpaid interest thereon to (but excluding) the date of 

redemption, plus in the case of the Class C-2 Notes only, the excess, if any, of (x) the present value of the scheduled 

payments of interest and principal which are remaining with respect to the Class C-2 Notes as of the Payment Date 

on which an Optional Notes Redemption, will be made, based on the assumption that no principal is paid on the 

Class C-2 Notes until the Class C-2 Notes are paid in full on the Payment Date in December 2015, and using a 

discount factor equal to the USD-ISDA-Swap Rate with a maturity as close to but not exceeding the period of time 

between the Payment Date of the redemption and the Payment Date occurring in December 2015 (calculated as of 

the 45th day preceding the Payment Date of the redemption), plus 1.45% over (y) 100% of the Aggregate Principal 

Amount of the Class C-2 Notes. When used with respect to any Income Note to be redeemed, an amount equal to its 

pro rata share (equal to a fraction, the numerator of which is the Aggregate Principal Amount of such Income Note 

and the denominator of which is the Aggregate Principal Amount of all Income Notes) of the Excess Sale Proceeds. 

“Optional Notes Redemption”: An optional redemption of the Notes as set forth in “Description of the 

Notes— Optional Notes Redemption.” 

“Ordinary Shares”: The 250 issued voting ordinary shares, U.S.$1.00 par value per share, of the Issuer. 

“Outstanding”: With respect to the Notes, as of any date of determination, “Outstanding” refers to all 

Notes theretofore authenticated and delivered under the Indenture except: (i) Notes theretofore canceled by the Note 

Registrar or delivered to the Note Registrar for cancellation; (ii) Notes or portions thereof for whose payment or 

redemption money in the necessary amount has been theretofore irrevocably deposited with the Trustee or any 

paying agent in trust for the Holders of such Notes; provided, however, that, if such Notes or portions thereof are to 

be redeemed, notice of such redemption has been duly given pursuant to the Indenture or provision therefor 

satisfactory to the Trustee has been made; (iii) Notes in exchange for or in lieu of which other Notes have been 

authenticated and delivered pursuant to the Indenture, unless proof satisfactory to the Trustee is presented that any 

such Notes are held by a holder in due course; and (iv) mutilated Notes and Notes alleged to have been destroyed, 

lost or stolen for which replacement Notes have been issued as provided in the Indenture; provided, however, that in 

determining whether the Holders of the requisite Aggregate Principal Amount have given any request, demand, 

authorization, direction, notice, consent or waiver thereunder, Notes owned by or pledged to the Issuer or any other 

obligor upon the Notes or any Affiliate of the Issuer or of such other obligor, and (in the case of any supplemental 

indenture that affects any provisions of the Indenture that affect the Trustee) Notes owned by or pledged to the 

Person acting as Trustee under the Indenture or any of its Affiliates, shall be disregarded and deemed not to be 

Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, 

demand, authorization, direction, notice, consent or waiver, only Notes that a responsible officer of the Trustee 

actually knows to be so owned or pledged shall be so disregarded. Notwithstanding the foregoing, at all times that 

the Collateral Manager or any of its Affiliates is acting as Collateral Manager, any Notes held by, or with respect to 

which discretionary voting rights are held by, the Collateral Manager or its Affiliates will have no voting rights with 

respect to any vote in connection with the removal of the Collateral Manager and will be deemed not to be 

Outstanding in connection with any such vote; provided, however, that any Notes held by, or with respect to which 

discretionary voting rights are held by, the Collateral Manager and its Affiliates or their respective employees will 

have voting rights with respect to all other matters as to which the holders of the Notes are entitled to vote, 

including, without limitation, any vote in connection with an Optional Notes Redemption or the appointment of a 

replacement collateral manager which is not affiliated with the Collateral Manager in accordance with the Collateral 

Management Agreement. 

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“Par Special Redemption Price”: 100% of the principal amount of the Corresponding Debentures or Bank 

Subordinated Notes to be redeemed plus accrued and unpaid interest thereon to the Redemption Date. 

“Parent Guarantee”: A guarantee issued by the Affiliated Insurance Institution Parent with the terms 

described under “Security for the Notes— Description of the Insurance Capital Securities— Terms of the 

Corresponding Debentures— Parent Guarantee.” 

“Paying Agent”: The Trustee in its capacity as paying agent with respect to the Notes or any successor or 

additional paying agent appointed in accordance with the Indenture. 

“Paying Agent in Ireland”: Custom House Administration and Corporate Services Limited in Dublin, 

Ireland, or any successor thereto, as paying agent in Ireland with respect to the Notes, so long as any such Notes are 

listed on the Irish Stock Exchange. 

“Payment Date”: March 1, June 1, September 1 and December 1 of each year commencing in December 

2005, or, if such day is not a Business Day, then the next succeeding Business Day. 

“Payment Restrictions”: Restrictions under Applicable Insurance Laws, or set forth on the order, permit or 

approval letter of the Applicable Regulator authorizing the issuance of the Insurance Surplus Note, restricting the 

payments of principal of and premium, if any, and interest on such Insurance Surplus Note. 

“Periodic Interest”: With respect to the Class A-1 Notes, the Class A-2 Notes, Class B Notes, the Class 

C-1 Notes and the Class C-2 Notes, in each case interest payable on each Payment Date on such Notes and accruing 

during each Periodic Interest Accrual Period at the Applicable Periodic Rate. 

“Periodic Interest Accrual Period”: With respect to the initial Payment Date, the period from and 

including the Closing Date to, but excluding, such Payment Date; thereafter, with respect to each Payment Date, the 

period beginning on the first day following the end of the preceding Periodic Interest Accrual Period and ending on 

the day before such Payment Date; provided, however, that with respect to the Class C-2 Notes only, the Periodic 

Interest Accrual Period for each Payment Date shall end on the day before March 1, June 1, September 1 and 

December 1 regardless of whether such day is a Business Day. 

“Periodic Interest Amount”: With respect to each class of Class A Notes, Class B Notes and Class C Notes 

and each Payment Date, the aggregate amount of interest accrued at the Applicable Periodic Rate during the related 

Periodic Interest Accrual Period on the Aggregate Principal Amount of such Notes as of the first day of such 

Periodic Interest Accrual Period (after giving effect to any payment of principal on such Notes on such first day, if 

applicable). The Periodic Interest Amount shall be calculated on the basis of the actual number of days elapsed in 

the applicable Periodic Interest Accrual Period divided by 360; provided, however, that with respect to the Class C-2 

Notes only, interest will be computed on the basis of a 360-day year consisting of twelve 30-day months. 

“Person”: Any individual, corporation, partnership, limited liability company, joint venture, association, 

joint stock company, trust (including any beneficiary thereof), unincorporated organization or government or any 

agency or political subdivision thereof. 

“Placement Agents”: Sandler O’Neill & Partners, L.P. and Greenwich Capital Markets, Inc. 

“Pledged Securities”: On any date of determination, the Collateral Debt Securities (including any 

Corresponding Debentures acquired by the Issuer in connection with any Capital Securities) and the Eligible 

Investments in the Trust Estate. 

“Premium Special Redemption Price”: A fixed percentage of the principal amount of the Corresponding 

Debentures or Bank Subordinated Notes to be redeemed specified in the related Affiliated Depository Institution 

Indenture, Affiliated Insurance Institution Indenture or Bank Subordinated Note Indenture, as applicable, until such 

time as such Corresponding Debentures or Bank Subordinated Notes are subject to optional redemption at 100% of 

the principal amount thereof, in each case plus accrued and unpaid interest thereon to the Redemption Date. 

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“Principal Balance”: With respect to any Eligible Investment, as of any date of determination, the balance 

of such Eligible Investment and with respect to any Collateral Debt Securities as of any date of determination, the 

outstanding liquidation or principal amount of such Collateral Debt Securities. 

“Principal Collection Account”: The principal collection account established by the Trustee pursuant to the 

Indenture for use in connection with the collection and disbursement of Principal Collections. 

“Principal Collections”: With respect to any date of determination, the sum, without duplication, of (i) all 

payments representing all or a portion of the Principal Balance of any Collateral Debt Securities in the Trust Estate 

which are received during the related Due Period (including principal recoveries with respect to defaulted Collateral 

Debt Securities), (ii) the aggregate Principal Balance of any Collateral Debt Securities received in connection with 

an optional redemption or a Special Event redemption, as applicable, of such Collateral Debt Securities, (iii) any 

other receipts on Collateral Debt Securities which are not included in Interest Collections, but excluding any 

prepayment premiums received in connection with a redemption of the Collateral Debt Securities deposited or to be 

deposited into the Class A/B Reserve Account and any payments of interest deposited into the Semiannual Receipts 

Account, (iv) all Sale Proceeds (exclusive of accrued interest) and (v) all amounts received on Defaulted Securities. 

“Principal Coverage Amount”: As of any Calculation Date, an amount equal to the sum of (i) the amount 

of Principal Collections in the Principal Collection Account on such date, (ii) the Aggregate Principal Amount of (a) 

the Collateral Debt Securities (other than Defaulted Securities) and (b) Eligible Investments (other than Defaulted 

Securities) that represent Principal Collections, in each case in the Trust Estate on such Calculation Date and (iii) 

5% of the aggregate Principal Balance of all Defaulted Securities in the Trust Estate on such Calculation Date. 

“Priority of Payments”: The Priority of Payments described under the heading “Description of the Notes— 

Priority of Payments” herein. 

“Purchase Agreement”: The Purchase Agreement dated as of August 24, 2005 among the Issuer, the Co- 

Issuer and the Initial Purchasers, as it may be amended or supplemented from time to time. 

“QIB/QP”: A person that is both a Qualified Institutional Buyer and a Qualified Purchaser. 

“Qualified Bidder”: Any of (i) Sandler O’Neill & Partners, L.P. and Greenwich Capital Markets, Inc., and 

any of their successors, (ii) any Person recommended by any Person in clause (i), and (iii) any Person selected by 

the Collateral Manager in its sole discretion; provided, however, that the Collateral Manager shall have no obligation 

to select a Person pursuant to this clause (iii); provided further that in each case such Person is (a) either a Qualified 

Institutional Buyer or an institutional “accredited investor” within the meaning of clause (1), (2), (3) or (7) of Rule 

501(a) of Regulation D under the Securities Act and (b) able to satisfy any other restrictions or conditions applicable 

to the sale or transfer of the Collateral Debt Securities. 

“Qualified Institutional Buyer”: A “qualified institutional buyer”, as defined under Rule 144A. 

“Qualified Purchaser”: A “qualified purchaser”, as defined in Section 2(a)(51)(A) of the Investment 

Company Act and the rules and regulations thereunder. 

“Quarterly Asset Amount”: With respect to any Payment Date, an amount equal to (i) the Aggregate 

Principal Amount of the Collateral Debt Securities, plus (ii) cash and Eligible Investments in the Principal 

Collection Account representing Principal Collections, minus (iii) the Aggregate Principal Amount of all Collateral 

Debt Securities that are Defaulted Securities, plus (iv) for each Defaulted Security, the product of (x) 5% and (y) the 

Aggregate Principal Amount of such Defaulted Security, in each case as of the first day of the related Due Period or, 

in the case of the first Due Period, on the Closing Date. 

“Rating Agencies”: Moody’s, Fitch and S&P, for so long as any such Rating Agency shall continue to rate 

any Notes rated by it as of the Closing Date. 

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“Rating Condition”: Written confirmation by each of Moody’s and S&P (or either one of them as specified 

herein) that the ratings of the Notes then Outstanding and rated by each such Rating Agency (or either one of them 

as specified herein) will not be reduced or withdrawn as a result of the proposed action. 

“Record Date”: The date on which the Holders of Notes entitled to receive a payment of principal or 

interest on the succeeding Payment Date are determined, such date as to any Payment Date being the fifteenth day 

(whether or not a Business Day) prior to such Payment Date. 

“Redemption Date”: The date fixed for the redemption of (i) Corresponding Debentures by an Affiliated 

Depository Institution or Affiliated Insurance Institution, as applicable, and concurrently for the redemption of the 

related Capital Securities by the subsidiary Capital Securities Issuer of such Affiliated Depository Institution or 

Affiliated Insurance Institution, as applicable, (ii) Bank Subordinated Notes by a Bank Subordinated Note Issuer or 

(iii) the Insurance Surplus Note by the Insurance Surplus Note Issuer. 

“Redemption Prepayment”: Any prepayment of Class A Notes, Class B Notes or Class C Notes in 

accordance with the Priority of Payments as a result of an optional redemption or Special Event redemption of the 

Collateral Debt Securities or any other early redemption provision of the Collateral Debt Securities. 

“Redemption Price”: An Optional Redemption Price or a Special Redemption Price. 

“Regulatory Interest Rate Limitations”: Caps or other limitations on the rate or amount of interest that may 

be paid on the Insurance Surplus Note pursuant to Applicable Insurance Laws or any order or approval letter 

approving the initial issuance of an Insurance Surplus Note. 

“Remaining Life”: With respect to any Corresponding Debenture, Bank Subordinated Note or Insurance 

Surplus Note, the period from the Redemption Date to the date after which optional redemption thereof is permitted 

or, in certain cases, to maturity. 

“Requisite Noteholders”: The Holders of more than 66-2/3% of the Aggregate Principal Amount of the 

Class A-1 Notes, so long as any Class A-1 Notes remain Outstanding, and thereafter the Holders of more than 66- 

2/3% of the Aggregate Principal Amount of the Class A-2 Notes, so long as any Class A-2 Notes remain 

Outstanding, and thereafter the Holders of more than 66-2/3% of the Aggregate Principal Amount of the Class B 

Notes, so long as any Class B Notes remain Outstanding, and thereafter the Holders of more than 66-2/3% of the 

Aggregate Principal Amount of the Class C Notes (treating the Class C-1 Notes and the Class C-2 Notes as a single 

class for this purpose), so long as any Class C Notes remain Outstanding, and thereafter the Holders of more than 

66-2/3% of the Aggregate Principal Amount of the Income Notes. 

“Rule 144A”: Rule 144A under the Securities Act. 

“S&P”: Standard & Poor’s, a division of The McGraw-Hill Companies, Inc., and any successor or 

successors thereto. 

“Sale Proceeds”: All proceeds received from the sale or other disposition of Collateral Debt Securities, 

including Defaulted Securities, or any other assets in the Trust Estate (including from the sale, termination or 

assignment of any Hedge Agreements), net of any reasonable amounts expended by the Trustee in connection with 

such sale or other disposition. 

“Secured Parties”: The Holders of the Notes and the Hedge Counterparties, in each case, to the extent 

provided in the granting clauses of the Indenture. 

“Securities Act”: The United States Securities Act of 1933, as amended. 

“Senior Claims”: With respect to the Insurance Surplus Note Issuer, all existing or future claims that, 

pursuant to the Insolvency Law, are senior to and would be paid prior to the Insurance Surplus Note in the event of 

A-17

ehabilitation, liquidation, conservation, dissolution, reorganization or supervision of such Insurance Surplus Note 

Issuer. 

“Senior Indebtedness”: With respect to (I) any Affiliated Depository Institution, (i) the principal, premium, 

if any, and interest in respect of (A) indebtedness of the Affiliated Depository Institution for money borrowed, 

similar obligations arising from off-balance sheet guarantees and direct credit substitutes and (B) indebtedness 

evidenced by securities, debentures, notes, bonds or other similar instruments issued by the Affiliated Depository 

Institution, (ii) all capital lease obligations of the Affiliated Depository Institution, (iii) all obligations of the 

Affiliated Depository Institution issued or assumed as the deferred purchase price of property, all conditional sale 

obligations of the Affiliated Depository Institution and all obligations of the Affiliated Depository Institution under 

any title retention agreement (but excluding trade accounts payable arising in the ordinary course of business), (iv) 

all obligations of the Affiliated Depository Institution for the reimbursement of any letter of credit, any banker’s 

acceptance, any security purchase facility, any repurchase agreement or similar arrangement, all obligations 

associated with derivative products such as interest rate and foreign exchange contracts and commodity contracts, 

any interest rate swap, any other hedging arrangement, any obligation under options or any similar credit or other 

transaction, (v) all obligations of the type referred to in clauses (i) through (iv) above of other Persons for the 

payment of which the Affiliated Depository Institution is responsible or liable as obligor, guarantor or otherwise and 

(vi) all obligations of the type referred to in clauses (i) through (v) above of other Persons secured by any lien on 

any property or asset of the Affiliated Depository Institution (whether or not such obligation is assumed by the 

Affiliated Depository Institution), whether incurred on or prior to the date of any Affiliated Depository Institution 

Indenture or thereafter incurred, unless, with the prior approval of the Applicable Regulator, if applicable, if not 

otherwise generally approved, in the instrument creating or evidencing the same or pursuant to which the same is 

outstanding, it is provided that such obligations are not superior or are pari passu in right of payment to the 

Corresponding Debentures; (II) any Affiliated Insurance Institution, (i) the principal, premium, if any, and interest in 

respect of (a) indebtedness of such Affiliated Insurance Institution for money borrowed and (b) indebtedness 

evidenced by securities, debentures, notes, bonds or other similar instruments issued by such Affiliated Insurance 

Institution, (ii) all capital lease obligations of such Affiliated Insurance Institution, (iii) all obligations of such 

Affiliated Insurance Institution issued or assumed as the deferred purchase price of property, all conditional sale 

obligations of such Affiliated Insurance Institution and all obligations of such Affiliated Insurance Institution under 

any title retention agreement (but excluding trade accounts payable arising in the ordinary course of business), 

(iv) all obligations of such Affiliated Insurance Institution for the reimbursement of any letter of credit, any banker’s 

acceptance, any security purchase facility, any repurchase agreement or similar arrangement, any interest rate swap, 

any other hedging arrangement, any obligation under options or any similar credit or other transaction, (v) all 

obligations of the type referred to in Clauses (i) through (iv) above of other persons for the payment of which such 

Affiliated Insurance Institution is responsible or liable as obligor, guarantor or otherwise and (vi) all obligations of 

the type referred to in Clauses (i) through (v) above of other persons secured by any lien on any property or asset of 

such Affiliated Insurance Institution (whether or not such obligation is assumed by such Affiliated Insurance 

Institution), whether incurred on or prior to the date of the related Affiliated Insurance Institution Indenture or 

thereafter incurred, unless it is provided in the instrument creating or evidencing the same or pursuant to which the 

same is outstanding that such obligations are not superior or are pari passu in right of payment to the Corresponding 

Debentures of such Affiliated Insurance Institution;, (III) the Insurance Surplus Note Issuer, (i) the principal, 

premium, if any, and interest in respect of (A) indebtedness of such Insurance Surplus Note Issuer for money 

borrowed and (B) indebtedness evidenced by securities, debentures, notes, bonds or other similar instruments issued 

by such Insurance Surplus Note Issuer, (ii) all capital lease obligations of such Insurance Surplus Note Issuer, 

(iii) all obligations of such Insurance Surplus Note Issuer issued or assumed as the deferred purchase price of 

property, all conditional sale obligations of such Insurance Surplus Note Issuer and all obligations of such Insurance 

Surplus Note Issuer under any title retention agreement (but excluding trade accounts payable arising in the ordinary 

course of business), (iv) all obligations of such Insurance Surplus Note Issuer for the reimbursement of any letter of 

credit, any banker’s acceptance, any security purchase facility, any repurchase agreement or similar arrangement, 

any interest rate swap, any other hedging arrangement, any obligation under options or any similar credit or other 

transaction, (v) all obligations of the type referred to in Clauses (i) through (iv) above of other Persons for the 

payment of which such Insurance Surplus Note Issuer is responsible or liable as obligor, guarantor or otherwise and 

(vi) all obligations of the type referred to in Clauses (i) through (v) above of other Persons secured by any lien on 

any property or asset of such Insurance Surplus Note Issuer (whether or not such obligation is assumed by such 

Insurance Surplus Note Issuer), whether incurred on or prior to the date of the Surplus Note Indenture or thereafter 

incurred, unless it is provided in the instrument creating or evidencing the same or pursuant to which the same is 

A-18

outstanding that such obligations are not superior or are pari passu in right of payment to the Insurance Surplus 

Note; and (IV) any Bank Subordinated Note Issuer, the principal of and any premium on the following, whether 

outstanding on the date of execution of the Bank Subordinated Note Indenture or thereafter created, assumed or 

incurred: (i) any obligation of, or any obligation guaranteed by, such Bank Subordinated Note Issuer for the 

repayment of borrowed money, whether or not evidenced by bonds, debentures, notes or other written instruments, 

and similar obligations arising from off-balance sheet guarantees and direct credit substitutes, including, except in 

the case of bank holding companies, its obligations to a Federal Reserve Bank or the FDIC, if any, and any rights 

acquired by the FDIC as a result of loans made by the FDIC to such Bank Subordinated Note Issuer or the purchase 

or guarantee of any of its assets by the FDIC pursuant to the provisions of 12 U.S.C. 1823(c), (d) or (e), if 

applicable, (ii) except in the case of bank holding companies, deposits, (iii) obligations under bankers’ acceptances 

and letters of credit, (iv) obligations associated with derivative products such as interest rate and foreign exchange 

rate contracts, commodity and currency contracts and similar arrangements, (v) any deferred obligations of, or any 

such obligation guarantees by, such Bank Subordinated Note Issuer for the payment of the purchase price of 

property or assets, excluding, in the case of bank holding companies, trade accounts payable in the ordinary course 

of business, (vi) obligations of such Bank Subordinated Note Issuer as lessee under any lease of real or personal 

property required to be capitalized under generally accepted accounting principles at the time, excluding, in the case 

of bank holding companies, trade accounts payable in the ordinary course of business and (vii) any amendments, 

deferrals, renewals, extensions or refundings of any such indebtedness or obligations referred to in clauses (i) or (iii) 

through (vi) above, provided, that Senior Indebtedness with respect to any Bank Subordinated Note Issuer will not 

include (i) obligations, renewals, extensions or refundings referred to in clauses (i) or (iii) through (vii) that 

specifically by their terms rank junior to, or equally with, the Bank Subordinated Notes of the related Bank 

Subordinated Note Issuer in right of payment in the event of certain events of bankruptcy, insolvency receivership or 

reorganization of such Bank Subordinated Note Issuer and (ii) the Bank Subordinated Notes of the related Bank 

Subordinated Note Issuer. 

“Shortfall Amount”: With respect to any Payment Date with respect to which the Interest Collections 

available for distribution on such Payment Date (other than amounts transferred from the Class A/B Reserve 

Account to the Interest Collection Account on such Payment Date) are insufficient to pay the items specified in 

clauses (a)(i) through (a)(v) of the Priority of Payments, an amount equal to the lesser of (a) an amount sufficient, 

when added to such Interest Collections, to pay such items in full on such Payment Date and (b) the entire balance in 

the Class A/B Reserve Account. 

“Special Event”: Each of a Capital Securities Special Event, Bank Subordinated Note Special Event and 

Insurance Surplus Note Special Event, as applicable. 

“Special Redemption Price”: With respect to (i) Corresponding Debentures, the redemption price of the 

Corresponding Debentures required to be paid by the applicable Affiliated Depository Institution or Affiliated 

Insurance Institution, as the case may be, to its subsidiary Capital Securities Issuer and by such Capital Securities 

Issuer to redeem its Capital Securities Issuer Securities in the event of a redemption prior to maturity as a result of a 

Capital Securities Special Event, (ii) Bank Subordinated Notes, the redemption price required to be paid by the 

applicable Bank Subordinated Note Issuer in the event of redemption prior to maturity as a result of a Bank 

Subordinated Note Special Event or (iii) Insurance Surplus Note, the redemption price required to be paid by the 

Insurance Surplus Note Issuer in the event of redemption prior to maturity as a result of an Insurance Surplus Note 

Special Event, and which, in each case, will generally be a Par Special Redemption Price, a Premium Special 

Redemption Price, a Declining Premium Special Redemption Price or a Make-Whole Special Redemption Price. 

“SPV Trustee Expenses”: With respect to certain special purpose vehicles that hold Income Notes and 

other assets, any fees and expenses payable to the trustees or administrators of such special purpose vehicles. 

“Stated Maturity Date”: December 1, 2035. 

“Subpool”: Each of the groups of Collateral Debt Securities designated by the Collateral Manager in 

accordance with the Auction Procedures on which Listed Bidders may provide a separate bid in an Auction. 

“Successor Securities”: Securities issued by a successor entity to a Capital Securities Issuer having 

substantially the same terms as the Capital Securities Issuer Securities of such Capital Securities Issuer. 

A-19

“Tax Event”: The receipt by an Affiliated Depository Institution or Affiliated Insurance Institution, as 

applicable, and its subsidiary Capital Securities Issuer of an opinion of counsel experienced in such matters to the 

effect that, as a result of any amendment to or change (including any announced prospective change) in the laws or 

any regulations thereunder of the United States or any political subdivision or taxing authority thereof or therein, or 

as a result of any official or administrative pronouncement (including any private letter ruling, technical advice 

memorandum, regulatory procedure, notice or announcement (an “Administrative Action”)) or judicial decision 

interpreting or applying such laws or regulations, regardless of whether such Administrative Action or judicial 

decision is issued to or in connection with a proceeding involving such Affiliated Depository Institution or Affiliated 

Insurance Institution, as applicable, or such Capital Securities Issuer and whether or not subject to review or appeal, 

which amendment, clarification, change, Administrative Action or decision is enacted, promulgated or announced, 

in each case on or after the date of original issuance of the related Corresponding Debentures, there is more than an 

insubstantial risk that: (a) such Capital Securities Issuer is, or will be within 90 days of the date of such opinion, 

subject to United States federal income tax with respect to income received or accrued on such Corresponding 

Debentures; (b) interest payable by such Affiliated Depository Institution or Affiliated Insurance Institution, as 

applicable, on such Corresponding Debentures is not, or within 90 days of the date of such opinion will not be, 

deductible by such Affiliated Depository Institution or Affiliated Insurance Institution, as applicable, in whole or in 

part, for United States federal income tax purposes; or (c) such Capital Securities Issuer is, or will be within 90 days 

of the date of such opinion, subject to more than a de minimis amount of other taxes (including withholding taxes), 

duties, assessments or other governmental charges. 

“Treasury Rate”: (i) the yield, under the heading which represents the average for the week immediately 

prior to the date of calculation, appearing in the most recently published statistical release designated H.15 (519) or 

any successor publication which is published weekly by the Federal Reserve and which establishes yields on 

actively traded United States Treasury securities adjusted to constant maturity under the caption “Treasury Constant 

Maturities”, for the maturity corresponding to the Remaining Life (if no maturity is within three months before or 

after the Remaining Life, yields for the two published maturities most closely corresponding to the Remaining Life 

shall be determined and the Treasury Rate shall be interpolated or extrapolated from such yields on a straight-line 

basis, rounding to the nearest month) or (ii) if such release (or any successor release) is not published during the 

week preceding the calculation date or does not contain such yields, the rate per annum equal to the quarterly or 

semiannual, as applicable, equivalent yield to maturity of the comparable treasury issue, calculated using a price for 

the comparable treasury issue (expressed as a percentage of its principal amount) equal to the comparable treasury 

price for such Redemption Date. The Treasury Rate shall be calculated on the third Business Day preceding the 

Redemption Date. 

“Trust Estate”: The Trust Estate will generally consist of all money, instruments and other property and 

rights subject to the lien of the Indenture and all proceeds thereof, including the Collateral Debt Securities, the 

Guarantees, the Eligible Investments, the Class A/B Reserve Account, the Expense Reserve Account, the 

Semiannual Receipts Account, the Interest Collection Account, the Principal Collection Account and the Issuer’s 

rights under the Hedge Agreements and the Collateral Management Agreement. 

“Trustee”: JPMorgan Chase Bank, National Association, a banking association organized under the laws 

of the United States, and its permitted successors. 

“Trustee Expenses”: With respect to any Payment Date (including without limitation any Final Maturity 

Date), an amount equal to the sum of all amounts incurred by or otherwise owing to the Trustee accrued during the 

preceding Due Period in accordance with the Indenture other than the Trustee Fee. 

“Trustee Fee”: With respect to any Payment Date (including without limitation any Final Maturity Date), a 

trustee fee in an aggregate amount equal to 0.015% per annum multiplied by the sum of (i) the Aggregate Principal 

Amount of the Collateral Debt Securities and (ii) cash and Eligible Investments representing Principal Collections in 

the Principal Collection Account as of the first day of the related Due Period. 

“Underlying Instrument”: The trust agreement, indenture or other agreement pursuant to which a Pledged 

Security has been issued or created and each other agreement that governs the terms of or secures the obligations 

represented by such Pledged Security or of which the holders of such Pledged Security are the beneficiaries. 

A-20

“United States Alien Holder”: Any Holder of Bank Subordinated Notes that is not a “United States person,” 

within the meaning of Section 7701(a)(30) of the Code. 

Act. 

“U.S. Person”: As defined in Regulation S and within the interpretations under the Investment Company 

“USD-ISDA-Swap Rate”: With respect to a reset date will be the rate for U.S. Dollar swaps with a maturity 

of the designated maturity, expressed as a percentage, which appears as the “mid rate” on the Bloomberg Screen 

IRSB Selection United States Page as of 11:00 a.m., New York City time, on the day that is two Business Days 

preceding that reset date. If such rate does not appear on the Bloomberg Screen IRSB Selection United States Page, 

the rate for that reset date will be the rate for U.S. Dollar swaps with a maturity of the designated maturity, 

expressed as a percentage, which appears on the Reuters Screen ISDAFIXI Page as of 11:00 a.m., New York City 

time, on the day that is two Business Days preceding that reset date. If such rate does not appear on the Reuters 

Screen ISDAFIXI Page, the rate for that reset date will be determined as described in the Indenture. 

A-21

ANNEX B 

INDEX OF CERTAIN DEFINED TERMS 

Additional Amounts................................................ A-1 

Additional Interest................................................... A-1 

Administration Agreement ........................................38 

Administrative Action........................A-1, A-11, A-20 

Administrative Expenses ........................................ A-1 

Administrator...............................................17, 38, A-1 

Affiliate.................................................................... A-1 

Affiliated Depository Institution ................12, 55, A-1 

Affiliated Depository Institution Indenture ........... A-2 

Affiliated Insurance Institution ..................12, 55, A-2 

Affiliated Insurance Institution Indenture ............. A-2 

Affiliated Insurance Institution Parent.............79, A-2 

Agency Agreement ................................................. A-2 

Agency Cross Transactions .......................................33 

Aggregate Fees and Expenses ................................ A-2 

Aggregate Principal Amount.................................. A-2 

Applicable Bank Subordinated Interest Rate ...........69 

Applicable Capital Securities Rate ........................ A-2 

Applicable Insurance Laws .................................... A-2 

Applicable Insurance Surplus Note Interest Rate ....82 

Applicable Periodic Rate .......3, 4, 5, 6, 7, 41, 42, A-2 

Applicable Regulator .............................................. A-3 

Auction....................................................................9, 51 

Auction Date...............................................................51 

Auction Procedures....................................................51 

Available Funds....................................................... A-3 

Bank Capital Securities........................................ i, A-3 

Bank Capital Securities Issuer Securities .............. A-3 

Bank Capital Securities Issuers .............................. A-3 

Bank Capital Securities Special Event.............61, A-3 

Bank Subordinated Note Indenture...........................68 

Bank Subordinated Note Issuer..................12, 55, A-3 

Bank Subordinated Note Payment Date ...................69 

Bank Subordinated Note Special Event................. A-3 

Bank Subordinated Note Trustee ........................... A-3 

Bank Subordinated Notes ........................i, 12, 55, A-3 

Benefit Plan Investor.......................................... vi, 130 

Blue Sky............................................................. 26, 109 

Business Day ........................................................... A-3 

Calculation Agent.......................................................42 

Calculation Date...................................................... A-4 

Cap ..............................................................................99 

Cap Notional Amount ................................................99 

Capital Securities .....................................i, 12, 55, A-4 

Capital Securities Issuer ..................................... 12, 55 

Capital Securities Issuer Securities............59, 72, A-4 

Capital Securities Issuers............................12, 55, A-4 

Capital Securities Payment Date............................ A-4 

Capital Securities Special Event ............................ A-4 

Capital Treatment Event ......................................... A-4 

Cause.........................................................................104 

B-1 

Cercle Restreint D'Investisseurs..............................135 

Certificated Note ........................................................54 

CFC ...........................................................................126 

Class A Notes ................................................1, 39, A-5 

Class A/B Coverage Prepayments ..................... 10, 47 

Class A/B Coverage Tests ...................................... A-5 

Class A/B Interest Coverage Test .............................47 

Class A/B Principal Coverage Test...........................47 

Class A/B Reserve Account ......................................16 

Class A-1 Final Maturity Date ..............................3, 41 

Class A-1 Notes.............................................1, 39, A-5 

Class A-2 Final Maturity Date ..............................4, 41 

Class A-2 Notes.............................................1, 39, A-5 

Class B Final Maturity Date..................................5, 41 

Class B Notes ................................................1, 39, A-5 

Class C Coverage Prepayments.......................... 11, 48 

Class C Coverage Tests .......................................... A-5 

Class C Interest Coverage Test .................................48 

Class C Notes ................................................1, 39, A-5 

Class C Principal Coverage Test...............................48 

Class C-1 Final Maturity Date...............................6, 42 

Class C-1 Note Deferred Interest ..........................6, 42 

Class C-1 Notes.............................................1, 39, A-5 

Class C-2 Final Maturity Date...............................7, 42 

Class C-2 Note Deferred Interest ..........................7, 42 

Class C-2 Notes.............................................1, 39, A-5 

Clean Up Call ...................................................... 10, 49 

Clearance System .......................................................53 

Clearstream........................................................53, A-5 

Client Cross Transactions..........................................33 

Closing Date ......................................................... i, A-5 

Code ......................................................................... A-5 

Co-Issuer...........................................................i, 1, A-5 

Co-Issuers .........................................................i, 1, A-5 

Collateral Administration Agreement.................... A-5 

Collateral Administrator ..........................................107 

Collateral Debt Securities............................i, 1, 12, 55 

Collateral Debt Securities Issuer............................ A-5 

Collateral Management Agreement ............................2 

Collateral Management Fee.....................................106 

Collateral Manager........................................... i, 2, 101 

Collateral Manager Personnel ...................................31 

Collateralization Event ..............................................99 

Collection Accounts..........................................15, A-5 

Collections ............................................................... A-5 

Common Securities................................................. A-5 

Controlling Person ...................................................131 

Corporate Trust Office............................................ A-6 

Corresponding Debentures .........................13, 55, A-6 

Corresponding Security .............................................89 

Coverage Prepayments ....................................... 11, 48

Coverage Tests ........................................................ A-6 

Credit Risk Security ................................................ A-6 

Debenture Trustee ................................................... A-6 

Declaration............................................................... A-6 

Declaration Event of Default.................................. A-6 

Declining Premium Special Redemption Price..... A-6 

Defaulted Interest .................................................... A-6 

Defaulted Security.............................................20, A-6 

Deferred Interest...................................................... A-7 

Demutualization .........................................................84 

Distributions ............................................................ A-7 

DS Avoidance Event............................................... A-7 

DTC...............................................................................2 

Due Period ............................................................... A-7 

Early Termination ......................................................99 

Eligible Investment ................................................. A-7 

ERISA......................................................112, 118, 130 

ERISA Plans.............................................................130 

Euroclear............................................................53, A-8 

Event of Default ................................................91, A-8 

Excess Sale Proceeds.............................................. A-8 

Exchange Act ...................................................xiii, A-9 

Exchange Date............................................................53 

Expense Reserve Account ................................17, A-9 

Expenses ...................................................................103 

Extension Period ..................................................... A-9 

FAS 150......................................................................35 

FASB...........................................................................34 

FDIC ...........................................................................19 

Federal Reserve ....................................................... A-9 

FIN 46.........................................................................34 

FIN 46R ......................................................................34 

Final Maturity Date................................................. A-9 

Fitch ...................................................................... i, A-9 

Fixed Rate Bank Capital Securities ....................... A-9 

Fixed Rate Bank Subordinated Notes..............69, A-9 

Fixed Rate Collateral Debt Securities.................... A-9 

Fixed Rate Insurance Capital Securities ................ A-9 

Fixed Rate Period.................................................... A-9 

Fixed/Floating Rate Bank Capital Securities ........ A-9 

Fixed/Floating Rate Collateral Debt Securities..... A-9 

Floating Rate Bank Capital Securities ................... A-9 

Floating Rate Bank Subordinated Notes..........69, A-9 

Floating Rate Collateral Debt Securities ............. A-10 

Floating Rate Insurance Capital Securities.......... A-10 

Floating Rate Notes....................................................43 

Floating Rates.............................................................42 

FSMA........................................................................135 

GAAP..........................................................................22 

Geographical Regions................................................58 

Global Note ........................................................... A-10 

Global Notes...............................................................53 

Glossary ........................................................................1 

Guarantee............................................................... A-10 

Hedge Agreement Events of Default ........................99 

Hedge Agreements....................................17, 98, A-10 

B-2 

Hedge Counterparty ..................................17, 98, A-10 

Hedge Counterparty Collateral Account ................100 

Hedge Priority Event............................................. A-10 

Hedge Reduction........................................................99 

Hedge Termination Events ........................................99 

Hedge Transactions....................................................33 

Holder .................................................................... A-10 

Income Note Final Maturity Date ........................ A-10 

Income Notes...............................................1, 39, A-10 

Indemnified Party.....................................................103 

Indenture ......................................................1, 39, A-11 

Independent ........................................................... A-11 

Initial Purchaser Affiliates.........................................33 

Initial Purchasers........................................i, 134, A-11 

Insolvency Law ..................................................... A-11 

Institutional Trustee .............................................. A-11 

Insurance Capital Securities ..................i, 12, 55, A-11 

Insurance Capital Securities Issuer ..........12, 55, A-11 

Insurance Capital Securities Issuer Securities..... A-11 

Insurance Capital Securities Special Event ..............74 

Insurance Capital Securities Special Event ......... A-11 

Insurance Surplus Note..........................i, 12, 55, A-12 

Insurance Surplus Note Excess Interest....................83 

Insurance Surplus Note Indenture.............................82 

Insurance Surplus Note Interest Payment Date........82 

Insurance Surplus Note Issuer..................12, 55, A-11 

Insurance Surplus Note Maturity Date .....................83 

Insurance Surplus Note Special Event................. A-11 

Insurance Surplus Note Trustee ........................... A-11 

Interest Collection Account ............................15, A-12 

Interest Collections .........................................15, A-12 

Interest Coverage Amount........................11, 47, A-12 

Investisseurs Qualifies .............................................135 

Investment Company Act ..................................i, A-12 

Investment Company Event ................................. A-12 

InvStG.........................................................................37 

IRS ............................................................................122 

ISE........................................................................... i, 17 

Issuer...............................................................i, 1, A-12 

ITA ..............................................................................37 

Liabilities ..................................................................103 

LIBOR .............................................................42, A-12 

LIBOR Determination Date ......................................42 

Liquidation............................................................. A-12 

Liquidation Distribution ....................................... A-13 

London Banking Day.................................................42 

Majority Noteholders............................................ A-13 

Majority-in-Interest..................................................103 

Make-Whole Special Redemption Price.............. A-13 

Manager Party ............................................................89 

Mandatory Auction Call .............................9, 51, A-13 

Mandatory Auction Call Amount..........................9, 52 

Material Contracts....................................................137 

Moody’s ..............................................................i, A-13 

Non-Permitted Holder........................................... A-13 

non-U.S. holder ........................................................122

non-U.S. Person..................................................... A-13 

Note Register......................................................... A-13 

Note Registrar........................................................ A-13 

Note Stated Maturity Date.........................................69 

Note Valuation Report .......................................... A-13 

Noteholder ...................................................A-10, A-13 

Notes ............................................................1, 39, A-13 

Notes Redemption Date.............................................52 

Offshore Transaction ............................................ A-13 

OID............................................................................123 

Optional Note Redemption Price ......................... A-14 

Optional Notes Redemption ................................. A-14 

Optional Redemption Price .................................. A-13 

Order ............................................................................vi 

Ordinary Shares...........................................1, 38, A-14 

Outstanding............................................................ A-14 

Par Special Redemption Price .............................. A-15 

Parent Guarantee .............................................79, A-15 

Paying Agent ...................................................40, A-15 

Paying Agent in Ireland ..........................40, 137, A-15 

Payment Date ..............................................3, 40, A-15 

Payment Restrictions ......................................83, A-15 

Periodic Interest.......................... 3, 4, 5, 6, 7, 40, A-15 

Periodic Interest Accrual Period ................4, 40, A-15 

Periodic Interest Amount...................................... A-15 

Person..................................................................... A-15 

PFIC ..........................................................................125 

Physical Note..............................................................54 

Placement Agent Affiliates........................................33 

Placement Agents.......................................i, 134, A-15 

Plan Asset Regulation..............................................130 

Plans..........................................................................130 

Pledged Securities ................................................. A-15 

Premium Special Redemption Price .................... A-15 

Principal Balance ......................................59, 72, A-16 

Principal Collection Account .........................15, A-16 

Principal Collections.......................................15, A-16 

Principal Coverage Amount .....................11, 47, A-16 

Principal Transactions................................................33 

Priority of Payments .......................................44, A-16 

Prospectus......................................................................i 

Prospectus Directive .............................................. i, 17 

PTCE........................................................110, 115, 131 

Purchase Agreement ............................................. A-16 

QEF...........................................................................125 

QIB/QP ..............................................................v, A-16 

Qualified Bidder.................................................... A-16 

Qualified Institutional Buyer................................ A-16 

Qualified Institutional Buyers ..................................i, 2 

Qualified Purchaser............................................... A-16 

Qualified Purchasers .................................................i, 2 

Quarterly Asset Amount ....................................... A-16 

Quarterly Report.........................................................95 

Rating Agencies .................................................... A-16 

Rating Condition ................................................... A-17 

Record Date.....................................................40, A-17 

B-3 

Redemption Date................................................... A-17 

Redemption Prepayment................................. 49, A-17 

Redemption Price.................................................. A-17 

Reference Banks.........................................................43 

Regulation S .................................................................2 

Regulation S Global Notes ........................................53 

Regulatory Interest Rate Limitation..........................24 

Regulatory Interest Rate Limitations ................... A-17 

Relevant Persons .........................................................vi 

Remaining Life...................................................... A-17 

Requisite Noteholders........................................... A-17 

Rule 144A..........................................................2, A-17 

Rule 144A Global Note .........................................2, 53 

Rule 501(a) ...............................................................134 

S&P.....................................................................i, A-17 

Sale Proceeds......................................................... A-17 

Sandler O’Neill Advisors .................................... i, 101 

SAP .............................................................................22 

SEC .............................................................................26 

Secured Parties ...................................................... A-17 

Securities Act .....................................................i, A-17 

Semiannual Receipts Account...................................17 

Senior Claims ........................................................ A-17 

Senior Indebtedness .............................................. A-18 

Share Trustee..............................................................38 

Shortfall Amount................................................... A-19 

Similar Law ................................................vi, 118, 132 

Special Event......................................................... A-19 

Special Redemption Date ................................... 61, 74 

Special Redemption Price..................................... A-19 

SPV Trustee Expenses.......................................... A-19 

Stated Maturity Date ...................................3, 41, A-19 

Subpool.................................................................. A-19 

Substitute Party ........................................................100 

Substitution Event ....................................................100 

Successor Securities.............................................. A-19 

Swap............................................................................98 

Swap Notional Amount .............................................98 

Tax Event............................................................... A-20 

Telerate Page 3750.....................................................42 

Temporary Regulation S Global Notes.....................53 

Transferee .................................................................109 

Treasury ......................................................................36 

Treasury Rate ........................................................ A-20 

Trust Estate ............................................................ A-20 

Trustee ...............................................................1, A-20 

Trustee Expenses.............................................94, A-20 

Trustee Fee ............................................................ A-20 

Turbo Date....................................................................4 

U.S. holder................................................................122 

U.S. Person ............................................................ A-21 

U.S. Persons...................................................................i 

U.S. Shareholder ......................................................126 

UBTI .........................................................................127 

Underlying Instrument.......................................... A-20 

United States Alien Holder................................... A-21

Upfront Payment ....................................................2, 98 

USA PATRIOT Act...................................................36 

USD-ISDA-Swap Rate ......................................... A-21 

Warehouse Provider...................................................12 

B-4

PRINCIPAL OFFICES OF THE CO-ISSUERS 

MMCapS Funding XVII, Ltd. 

c/o Maples Finance Limited 

P.O. Box 1093 GT 

Queensgate House 

South Church Street 

George Town, Grand Cayman 


MMCapS Funding XVII, Corp. 

850 Library Avenue 

Suite 204 

Newark, Delaware 19711 

COLLATERAL MANAGER 

Sandler O’Neill Advisors, L.P. 

919 Third Avenue, 6 th Floor 

New York, New York 10022 

TRUSTEE, PRINCIPAL PAYING 

AGENT AND REGISTRAR 

JPMorgan Chase Bank, National Association 

Worldwide Securities Services (Houston) — 

MMCapS Funding XVII, Ltd. 

600 Travis Street, 50 th Floor 

JPMorgan Chase Tower 

Houston, Texas 77002 

IRISH LISTING AGENT 

Arthur Cox Listing Services Limited 

Earlsfort Centre 

Earlsfort Terrace 

Dublin 2 

Ireland 

IRISH PAYING AGENT 

Custom House Administration and 

Corporate Services Limited 

25 Eden Quay 

Dublin 1 

Ireland 

LEGAL ADVISORS 

To the Co-Issuers 

As to United States Law 

Sidley Austin Brown & Wood LLP 

787 Seventh Avenue 


To the Issuer 

As to Cayman Islands Law 

Maples and Calder 

P.O. Box 309 GT 

Ugland House 

South Church Street 

George Town, Grand Cayman 


To the Initial Purchasers 

and the Placement Agents 




To the Collateral Manager 



New York, New York 10019

MMCAPS FUNDING XVII, LTD. 

MMCAPS FUNDING XVII, CORP. 



U.S.$33,000,000 Class B Floating Rate Notes Due 2035 

U.S.$35,475,000 Class C-1 Floating Rate Deferrable Interest Notes Due 2035 

U.S.$35,475,000 Class C-2 Fixed Rate Deferrable Interest Notes Due 2035 

U.S.$27,000,000 Subordinate Income Notes Due 2035 

_____________________________ 

OFFERING CIRCULAR 

_____________________________ 

September 8, 2005 

RBS Greenwich Capital 

Sandler O’Neill & Partners, L.P.

MMCapS XVII Final Offering Circular - Irish Stock Exchange

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