HERCULES (ECLIPSE 2006-4) PLC
a public limited company incorporated in England and Wales with company registration number 5895593
NOTICE TO THE HOLDERS OF
£666,000,000 Class A Commercial Mortgage Backed Floating Rate Notes due 2018
ISIN (Reg S Notes) XS0276410080
£43,950,000 Class B Commercial Mortgage Backed Floating Rate Notes due 2018
ISIN (Reg S Notes) XS0276410833
£25,000,000 Class C Commercial Mortgage Backed Floating Rate Notes due 2018
ISIN (Reg S Notes) XS0276412375
£51,000,000 Class D Commercial Mortgage Backed Floating Rate Notes due 2018
ISIN (Reg S Notes) XS0276413183
£29,000,000 Class E Commercial Mortgage Backed Floating Rate Notes due 2018
ISIN (Reg S Notes) XS0276413340
(together the "Notes")
The Notes are admitted to the official list of the Irish Stock Exchange plc and to trading on its regulated market.
Directive 2003/6/EC of the European Parliament and of the Council of 28 January 2003 on insider dealing and market manipulation together with Implementing Directive 2003/124/EC (as implemented in Ireland by the Market Abuse (Directive 2003/6/EC) Regulations 2005) requires disclosure of inside information relating to the Notes.
The Special Servicer has made the following information (shown in quotation marks below) available to the Issuer. The Issuer notes that it has not been involved in the preparation of this information and in accordance with normal practice, the Issuer expresses no opinion in respect of the information contained in this Notice. Furthermore, this Notice is issued without prejudice to any and all of the Issuer's rights under the Transaction Documents relating to the Notes, all of which are expressly reserved.
This Notice is solely directed to the holders of the Notes ("Noteholders") and should not be relied upon or used by any other person.
Please note that, in accordance with normal practice, neither the Trustee nor any of its advisers has been consulted or involved in the formulation or negotiation of the matters contemplated by this Notice or has verified the information contained in any part of this Notice. Further neither the Trustee nor any of its advisers expresses any opinion as to the merits or purpose of the matters contemplated by this Notice or as to the action the Noteholders should take in relation to them. Neither the Trustee nor any of its advisers makes any representation regarding the accuracy, sufficiency, relevance or otherwise of any information contained in this Notice or otherwise disclosed or to be disclosed to the Noteholders in connection with the matters contemplated by this Notice or that all relevant information has been disclosed to Noteholders in this Notice or otherwise. Neither the Trustee nor any of its advisers accepts any liability in relation to the matters contemplated by this Notice. Accordingly, the Trustee urges Noteholders who are in any doubt as to the impact of the matters contemplated by this Notice to seek their own independent financial and/or legal advice.
Capitalised terms used but not defined in this Notice shall have the meanings given to them in the Prospectus dated 5 December 2006 issued by the Issuer (the "Prospectus").
"An update notice is relation to the Ashbourne Portfolio Priority A Whole Loan (the "Priority A Whole Loan) (currently split 50 per cent. by principal amount holding by the Issuer and a 50 per cent. by principal amount holding by Hercules (ECLIPSE 2006-4) plc) was given by the Issuer on 26th May 2016 (the "May 2016 Notice").
UPDATE ON PROCESS
The Special Servicer continues to work closely with the Borrower and all associated parties to support the ongoing Portfolio Sales Process. As advised in the May 2016 Notice, concurrently as a parallel track the Special Servicer has progressed, and is at a very advanced stage of the evaluation of certain other alternative strategies, to ensure it is in a position to determine the most optimum strategy to be deployed, that maximises recoveries of funds taking into account, the likelihood of the level of recovery proceeds, plus the timing and associated cost of recoveries, consistent with the Special Servicer's duties under the Servicing Standard.
THE PORTFOLIO SALE AND ALTERNATIVE STRATEGIES
Portfolio Sale: as advised in the May 2016 Notice a total of three Round 2 bids were received from interested parties (the "Bidders"). At that time each bid had elements that presented uncertainties, relating to the ability to execute, the availability and terms of debt, and the quantum of the bids. In the intervening period, since the May 2016 Notice, dialogue has continued with the Bidders. The Special Servicer wishes to advise that a revised enhanced bid was received from one of the bidders ("Bidder A") on the 19th August 2016 together with indicative Term Sheets from two reputable lending sources. This follows a period of further diligence undertaken by Bidder A, which included inter alia site visits by Bidder A and their advisers, to in excess of a third of the estate of care homes, carried out over July 2016 plus more advanced discussions with their preferred Lender(s). The quantum of the bid has increased from the previous indicative level, and the associated terms, whilst conditional, have been further advanced with significant levels of detail provided relative to Bidder A's funding arrangements. The enhancements were considered, by both the Borrower and the Special Servicer, to represent a positive move and a meeting was requested with Bidder A, to include also the participation of their associated preferred Lender(s). This meeting convened on 30th August 2016, and included representation from the Borrower, Bidder A and their Advisers, Bidder A's Lender(s), the Special Servicer and Ernst and Young LLP (being the party appointed by the Borrower to manage the Portfolio Sale process). Certain progress was made at the meeting in terms of important clarifications and all of the parties remain actively engaged, albeit that Bidder A's bid remains conditional and involves certain further due diligence by Bidder A.
Alternative Strategies: as advised in the May 2016 Notice the Special Servicer had been and continues to prepare and evaluate, in conjunction with its Advisers, a range of other alternative realisation strategies, with a view to determining the most favourable strategy to be deployed.
The alternative strategies being considered are described more specifically in the May 2016 Notice as "Portfolio Breakup" and "Hold Strategy". For these strategies significant reliance is placed on the preparation and evaluation of Operating budgets for the portfolio of care homes, including critical elements such as Capital Expenditure budgets. The Borrower, Asset Manager and the Special Servicer have been working closely with the new Operator of the care homes in Great Britain, Healthcare Management Solutions ("HCMS") in the preparation of forward looking budgets that cover an extended period, to provide necessary inputs to the evaluation of these alternative strategies. The Special Servicer has also engaged the services of a recognised and reputable Accountancy Firm, with experience in the care home sector. That Firm's scope of work includes a review of operational and capital expenditure budgets, prepared on a home by home basis and a review of underlying assumptions and sector related external factors. Also included in scope is commentary around both a "Portfolio Breakup" and "Hold Strategy". This work is currently ongoing and expected to conclude by early October 2016.
In addition, as advised in the May 2016 Notice the Special Servicer has had advanced discussions with market leading Business Transfer Agents following a structured selection process, with extensive experience, recognised expertise and national coverage in the care home sector. These discussions have included an evaluation of their recommend approach in executing asset sales in a Portfolio Breakup scenario, to include anticipated timelines to completion as well as indicative recoveries achievable.
The works above are designed collectively to advance matters and to ensure that the Special Servicer has reliable information to evaluate, determine and agree the optimum realisation strategy.
The Special Servicer continues to advance and evaluate the various options, which are all now at an advanced stage, and no single strategy has been determined at this point in time.
Operational surveillance by Special Servicer: In the meantime, at an operational level, the Special Servicer is engaged in regular update meetings with the Borrower as Asset Manager and HCMS as the principal care home operator. This has latterly extended to include a face to face meeting with the national regulator, CQC, who maintain an active interest in developments.
The Special Servicer will continue to update the Issuer as the process develops in terms of the various strategies and the selection of the most favourable one to be deployed. "
Special Servicer contact:
Capita Asset Services (London) Limited
40 Dukes Place
E-mail: [email protected]
Hercules (ECLIPSE 2006-4) plc
35 Great St Helen's
(in its capacity as Issuer)
BNY Mellon Corporate Trustee Services Limited
One Canada Square
(in its capacity as Trustee)
Date: 6 Sept 2016
This announcement has been issued through the Companies Announcement Service of
The Irish Stock Exchange
This information is provided by RNS