31PE Canary 6.455%33

 

TIDM31PE TIDMSBD 
 
RNS Number : 9411F 
Canary Wharf Finance II PLC 
21 January 2010 
 

CANARY WHARF FINANCE II PLC 
25 BANK STREET 
 
 
As issuer of the notes under the Canary Wharf Finance II plc ("CWF II") 
securitisation structure ("the Securitisation") CWF II announces that the 
administrators acting on behalf of Lehman Brothers Limited (in administration) 
("Lehman") have advised that: - 
 
 
  1.  As from 1 January 2010 Lehman has paid rent in respect of 290,146 sq ft, being 
  the areas of 25 Bank Street which it currently occupies and not for the whole of 
  25 Bank Street, and; 
  2.  Lehman proposes to move from 25 Bank Street by 31 March 2010 and from 1 April 
  2010 Lehman intends that it will cease paying rent and the estate service charge 
  on 25 Bank Street. 
 
 
 
Sub-tenants which currently occupy 484,000 sq ft will continue to pay rent 
directly to the Securitisation rental receipts account. 
 
 
Under the terms of a facility agreement with AIG Financial Products Corp ("the 
AIG Facility"), where there is a shortfall of rent on 25 Bank Street, amounts 
equal to the shortfall may be drawn down from the AIG Facility for a period of 
four years from the date of any initial drawdown. 
 
Notwithstanding any partial occupation of 25 Bank Street by the Administrator, 
CWF II continues to expect full performance of the Lehman obligations under the 
lease and payment of rent on the whole of 25 Bank Street will be pursued in line 
with a recent High Court ruling on administrator liability. Pending resolution 
of this issue there has been a net shortfall in rental income of GBP2.57m within 
the Securitisation structure this quarter. This shortfall has, however, been 
satisfied from existing cash resources in a coverage reserve account established 
within the Securitisation to meet such shortfalls. There will therefore be no 
immediate drawdown under the AIG Facility. 
 
 
Date:  21 January 2010 
  Enquiries: 
 
 
John Garwood 
Canary Wharf Finance II plc 
+44 (0) 20 7418 2000 
 
 
James Rossiter/Nick Claydon 
Brunswick Group LLP 
+ 44 (0) 207404 5959 
 
 
NOTES TO EDITORS 
As at 22 October 2009 the following notes issued by CWF II were outstanding: 
 
 
+-------+-----------+------------+----------------------------------------+ 
|Class  | Principal |  Interest  |               Repayment                | 
+-------+-----------+------------+----------------------------------------+ 
|       |      GBPm |            |                                        | 
+-------+-----------+------------+----------------------------------------+ 
|  A1   |   1,189.7 |  6.455%    |    By instalment from 2009 to 2033     | 
+-------+-----------+------------+----------------------------------------+ 
|  A3   |     400.0 |  5.952%    |    By instalment from 2032 to 2037     | 
+-------+-----------+------------+----------------------------------------+ 
|  A7   |     222.0 |  Floating  |                In 2035                 | 
+-------+-----------+------------+----------------------------------------+ 
|  B    |     203.9 |  6.800%    |    By instalment from 2005 to 2033     | 
+-------+-----------+------------+----------------------------------------+ 
|  B3   |     104.0 |  Floating  |                In 2035                 | 
+-------+-----------+------------+----------------------------------------+ 
|  C2   |     275.0 |  Floating  |                In 2035                 | 
+-------+-----------+------------+----------------------------------------+ 
|  D2   |     125.0 |  Floating  |                In 2035                 | 
+-------+-----------+------------+----------------------------------------+ 
|       |   2,519.6 |            |                                        | 
+-------+-----------+------------+----------------------------------------+ 
 
 
The securitisation has the benefit of an agreement with AIG which provides for 
the payment of the contracted rent under the lease following a default from 
Lehman, either in its entirety or to cover any shortfall. The agreement is for a 
period of 4 years from a payment default by Lehman. The amounts would be 
repayable if subsequent recoveries made in respect of amounts claimed or 
subsequent rentals in the properties exceed the rents that would have been 
received from Lehman. Under this agreement, AIG is obliged to maintain a certain 
credit rating. Following the fall in its credit rating, AIG posted cash 
collateral of approximately GBP224.0m. This collateral is held in AIG bank 
accounts with the Bank of New York Mellon, London branch and AIG has granted 
security over the deposits as collateral for its obligations. The amount 
initially posted in respect of AIG's obligations is subject to periodic 
adjustment to reflect movements in interest rates. 
 
 
CWF II also has the benefit of a GBP300.0m liquidity facility provided by 
Lloyds, under which drawings may be made in the event of a cash flow shortage 
under the securitisation. This facility is renewable annually. 
 
 
www.canarywharf.com 
 
 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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