AVOCA CREDIT OPPORTUNITIES PLC

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Microsoft Word - 18916794_4.DOCAVOCA CREDIT OPPORTUNITIES PLC (a public limited company incorporated under the laws of Ireland with a registered number of 424581) €20,000,000 Class E-8 Subordinated Notes due 2086
Avoca Credit Opportunities PLC (the "Issuer") may from time to time issue further notes, the terms and conditions of which are described in this prospectus (the "Prospectus"). This Prospectus relates to the Class E-8 Subordinated Notes (as defined below).
The Issuer has already issued its €200,000,000 VF-1 Senior Secured Variable Funding Notes due 2014 (the "VF-1 Notes"), €70,000,000 Class A-1 Senior Secured Floating Rate Notes due 2014 (the "Initial Issuance Class A Notes"), €8,750,000 Class B-1 Second Senior Secured Floating Rate Notes due 2014 (the "Initial Issuance Class B Notes"), €8,750,000 Class C-1 Third Senior Secured Floating Rate Notes due 2014 (the "Initial Issuance Class C Notes"), €4,500,000 Class D-1 Fourth Senior Secured Floating Rate Notes due 2014 (the "Initial Issuance Class D Notes"), €30,500,000 Class E-1 Subordinated Notes due 2086 (the "Initial Issuance Class E-1 Subordinated Notes"), €10,000,000 Class E-2 Subordinated Notes due 2086 (the "Initial Issuance Class E-2 Subordinated Notes") and €10,000,000 Class E-3 Subordinated Notes due 2086 (the "Initial Issuance Class E-3 Subordinated Notes", which together with the Initial Issuance Class E-1 Subordinated Notes and the Initial Issuance Class E-2 Subordinated Notes comprise the "Initial Issuance Class E Subordinated Notes", and together with the VF-1 Notes, the Initial Issuance Class A Notes, the Initial Issuance Class B Notes, the Initial Issuance Class C Notes and the Initial Issuance Class D Notes comprise the "Initial Issuance Notes"). The Initial Issuance Notes were the subject of an offering circular dated 2 August 2007 (the "Initial Offering Circular") and were issued and secured pursuant to a master trust deed (the "Master Trust Deed") dated 2 August 2007 (the "Initial Closing Date"), made between (amongst others) the Issuer and Deutsche Trustee Company Limited in its capacity as trustee (the "Trustee"), together with various trust instruments dated the Initial Closing Date supplemental thereto (such trust instruments together with the Master Trust Deed, the "Initial Trust Deed").
The Issuer has also issued its €20,000,000 Class E-4 Subordinated Notes due 2086 (the "March 2008 Issuance Class E-4 Subordinated Notes") and €5,000,000 Class E-5 Subordinated Notes due 2086 (the "March 2008 Issuance Class E-5 Subordinated Notes", which together with the March 2008 Issuance Class E-4 Subordinated Notes comprise the "March 2008 Issuance Class E Subordinated Notes"). The March 2008 Issuance Class E Subordinated Notes were the subject of a supplemental offering circular dated 14 March 2008 (the "March 2008 Issuance Offering Circular") and were issued and secured pursuant to the Master Trust Deed and a trust instrument supplemental thereto dated 10 March 2008 (the "March 2008 Closing Date"), made between (amongst others) the Issuer and the Trustee.
The Issuer has also issued its €30,000,000 Class I-1 Intervening Notes due 2014 (the "November 2008 Issuance Class I-1 Intervening Notes"). The November 2008 Issuance Class I-1 Intervening Notes were the subject of a supplemental offering circular dated 11 November 2008 (the "November 2008 Issuance Offering Circular") and were issued and secured pursuant to the Master Trust Deed and a trust instrument supplemental thereto dated 11 November 2008 (the "November 2008 Closing Date") made between (amongst others) the Issuer and the Trustee.
The Issuer has also issued its €30,000,000 Class E-6 Subordinated Notes due 2086 (the "September 2009 Issuance Class E Subordinated Notes"). The September 2009 Issuance Class E Subordinated Notes were the subject of a supplemental offering circular dated 11 September 2009 (the "September 2009 Issuance Offering Circular") and were issued and secured pursuant to the Master Trust Deed and a trust instrument supplemental thereto dated 10 September 2009 (the "September 2009 Closing Date") made between (amongst others) the Issuer and the Trustee.
The Issuer has also issued its €30,000,000 Class E-7 Subordinated Notes due 2086 (the "December 2009 Issuance Class E Subordinated Notes" and, together with the Initial Issuance Notes, the March 2008 Issuance Class E Subordinated Notes, the November 2008 Issuance Class I-1 Intervening Notes and the September 2009 Issuance Class E Subordinated Notes, the "Issued Notes"). The December 2009 Issuance Class E Subordinated Notes were the subject of a supplemental offering circular dated 10 December 2009 (the "December 2009 Issuance Offering Circular") and were issued and secured pursuant to the Master Trust Deed and a trust instrument supplemental thereto dated 10 December 2009 (the "December 2009 Closing Date") made between (amongst others) the Issuer and the Trustee.
On 4 June 2009 the Issuer repurchased and cancelled €8,750,000 in principal amount of its Initial Issuance Class B Notes, €4,750,000 in principal amount of its Initial Issuance Class C Notes and €2,500,000 in principal amount of its Initial Issuance Class D Notes. On 10 December 2009 the Issuer redeemed €30,000,000 in principal amount of its November 2008 Issuance Class I-1 Intervening Notes.
This Prospectus does not change or amend the terms and conditions of the Initial Issuance Notes, the March 2008 Issuance Class E Subordinated Notes, the November 2008 Issuance Class I-1 Intervening Notes, the September 2009 Issuance Class E Subordinated Notes or the December 2009 Issuance Class E Subordinated Notes. The provisions of this Prospectus relate to the issuance of the Class E-8 Subordinated Notes. The Class E-8 Subordinated Notes will be issued and secured pursuant to a trust instrument which is supplemental to the Master Trust Deed (such trust instrument together with the Initial Trust Deed and the supplemental trust instruments dated 10 March 2008, 11 November 2008, 10 September 2009 and 10 December 2009 referred to above, the "Trust Deed").
The Issuer will issue €20,000,000 Class E-8 Subordinated Notes due 2086 (the "Class E-8 Subordinated Notes" or the "December 2010 Issuance Class E Subordinated Notes" and, together with the Issued Notes, the "Notes") on 10 December 2010 (the "December 2010 Closing Date"). For the purposes of this Prospectus, "Specified Notes", shall include the December 2010 Issuance Class E Subordinated Notes.
The December 2010 Issuance Class E Subordinated Notes will be initially offered at the prices specified in the section of this Prospectus headed "Overview" or such other prices as may be negotiated at the time of sale.
The assets securing the Issued Notes and the December 2010 Issuance Class E Subordinated Notes will consist primarily of a portfolio of loans, high yield securities and special opportunity investments in respect of which Avoca Capital Holdings is acting as investment manager (the "Investment Manager"). The acquisition of such portfolio was financed by advances made pursuant to the VF-1 Notes which rank pari passu with the Class A Notes and the issue proceeds of the other Issued Notes. Additional external financing may also be obtained prior to or subsequent to the December 2010 Closing Date which will also be secured on the portfolio and may rank pari passu with one or more classes of Notes.
The December 2010 Issuance Class E Subordinated Notes, at the Investment Manager’s discretion and providing certain conditions for disbursement of the same are met, will receive Class E Restricted Disbursements (as defined herein) on Payment Dates (see Condition 3(d) (Restricted Payments) and Condition 3(c) (Payment of Amounts)). The Rated Notes and the Class E Subordinated Notes will be subject to mandatory redemption and optional redemption, in each case, as described herein (see Condition 7 (Redemption)).
The Rated Notes, the Intervening Notes and the Class E Subordinated Notes will be subject to mandatory redemption and optional redemption, in each case, as described herein (see Condition 7 (Redemption))
See the section of this Prospectus headed "Risk Factors" for a discussion of certain factors to be considered in connection with an investment in the December 2010 Issuance Class E Subordinated Notes.
This Prospectus comprises a prospectus for the purposes of Article 5 of Directive 2003/71/EC (the "Prospectus Directive"). This Prospectus has been approved by the Central Bank of Ireland, as competent authority under the Prospectus Directive. The Central Bank of Ireland only approves this Prospectus as meeting the requirements imposed under Irish and EU law pursuant to the Prospectus Directive. Application has been made to the Irish Stock Exchange for the Class E-8 Subordinated Notes to be admitted to the Official List and trading on its regulated market.
A copy of this Prospectus has been or will be delivered to the Registrar of Companies in Ireland for registration in accordance with the Prospectus Directive and Regulation 38 of the Irish Prospectus (Directive 2003/71/EC) Regulations 2005 (the "Prospectus Regulations").
The December 2010 Issuance Class E Subordinated Notes have not been and will not be registered under the United States Securities Act of 1933, as amended (the "Securities Act") or the securities laws of any state of the United States or any other jurisdiction. The December 2010 Issuance Class E Subordinated Notes will be offered only outside the United States to non-U.S. Persons in offshore transactions in compliance with Regulation S ("Regulation S") under the Securities Act ("Regulation S Notes"). The December 2010 Issuance Class E Subordinated Notes may not be offered or sold within the United States or to, or for the account or benefit of, U.S. Persons except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. Neither the Issuer nor the pool of underlying assets will be registered under the Investment Company Act. Interests in the December 2010 Issuance Class E Subordinated Notes will be subject to certain restrictions on transfer, and each purchaser of December 2010 Issuance Class E Subordinated Notes offered hereby in making its purchase will be deemed to have made certain acknowledgements, representations and agreements. See "Plan of Distribution" and "Transfer Restrictions".
Any investment in the December 2010 Issuance Class E Subordinated Notes does not have the status of a bank deposit and is not within the scope of the deposit protection scheme operated by the Central Bank of Ireland. The Issuer is not regulated by the Central Bank of Ireland.
The credit ratings included or referred to in this Prospectus have been issued by Fitch Ratings, Moody’s or S&P, each of which is established in the European Union and each of which has applied to be registered under Regulation (EC) No 1060/2009 of the European Parliament and of the Council of 16 September 2009 on credit rating agencies.
Dated 17 December 2010
PRIORITIES OF NOTES
The Class A Notes will rank pari passu with any External Senior Permitted Debt and the rights of any Secured Hedging Counterparties and rateably without any preference among themselves for all purposes and in priority to the Class B Notes and any External Second Senior Permitted Debt, the Class C Notes and any External Third Senior Permitted Debt, the Class D Notes and any External Fourth Senior Permitted Debt, the Intervening Notes and any External Intervening Permitted Debt and the Class E Subordinated Notes. The Class B Notes will rank pari passu with any External Second Senior Permitted Debt and rateably without any preference among themselves for all purposes and in priority to the Class C Notes and any External Third Senior Permitted Debt, the Class D Notes and any External Fourth Senior Permitted Debt, the Intervening Notes and any External Intervening Permitted Debt and the Class E Subordinated Notes. The Class C Notes will rank pari passu with any External Third Senior Permitted Debt and rateably without any preference among themselves for all purposes and in priority to the Class D Notes and any External Fourth Senior Permitted Debt, the Intervening Notes and any External Intervening Permitted Debt and the Class E Subordinated Notes. The Class D Notes will rank pari passu with any External Fourth Senior Permitted Debt and rateably without any preference among themselves for all purposes and in priority to the Intervening Notes and any External Intervening Permitted Debt and the Class E Subordinated Notes. The Intervening Notes and any External Intervening Permitted Debt will rank amongst itself in accordance with any Intervening Indebtedness Priority of Payments and in priority to the Class E Subordinated Notes. The Class E Subordinated Notes will rank rateably without any preference among themselves for all purposes but subordinate to the Rated Notes and any External Senior Permitted Debt, the rights of Secured Hedging Counterparties, External Second Senior Permitted Debt, External Third Senior Permitted Debt, External Fourth Senior Permitted Debt, the Intervening Notes and any External Intervening Permitted Debt.
LIMITED RECOURSE AND NON-PETITION
The VF Notes and the Notes are limited recourse obligations of the Issuer which are payable solely out of amounts received by or on behalf of the Issuer in respect of the Collateral. The net proceeds of the realisation of the security over the Collateral following a Transaction Default or the aggregate proceeds of liquidation of the Collateral may be insufficient to pay all amounts due to the VF Noteholders and Noteholders after making payments to other creditors (including any External Creditors) of the Issuer ranking prior thereto or pari passu therewith. In the event of a shortfall in such proceeds, the Issuer will not be obliged to pay, and the other assets (including the Issuer Irish Account and the rights of the Issuer under the Corporate Administration Agreement) of the Issuer will not be available for payment of, such shortfall and all claims in respect of which shall be extinguished (see Condition 4 (Security)).
RESPONSIBILITY
The Issuer accepts responsibility for the information contained in this Prospectus (save for the information contained in the sections of this Prospectus headed "Description of the Investment Manager" and "Description of the Collateral Administrator - General"). To the best of the knowledge and belief of the Issuer (which has taken all reasonable care to ensure that such is the case), such information is in accordance with the facts and does not omit anything likely to affect the import of such information. Neither Deutsche Bank AG, London Branch nor the Trustee accepts responsibility for the accuracy, adequacy, reasonableness or completeness of the information contained therein. The delivery of this Prospectus at any time does not imply that the information herein is correct at any time subsequent to the date of this Prospectus.
The Investment Manager accepts responsibility for the information contained in the section of this Prospectus headed "Description of the Investment Manager". To the best of the knowledge and belief of the Investment Manager (which has taken all reasonable care to ensure that such is the case), such information is in accordance with the facts and does not omit anything likely to affect the import of such information. None of Deutsche Bank AG, London Branch, the Trustee and the Issuer accepts responsibility for the accuracy, adequacy, reasonableness or completeness of the information contained therein.
The Collateral Administrator accepts responsibility for the information contained in the section of this Prospectus headed "Description of the Collateral Administrator - General". To the best of the knowledge and belief of the Collateral Administrator (which has taken all reasonable care to ensure
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that such is the case), such information is in accordance with the facts and does not omit anything likely to affect the import of such information. None of Deutsche Bank AG, London Branch (other than in its capacity as Collateral Administrator), the Trustee and the Issuer accepts responsibility for the accuracy, adequacy, reasonableness or completeness of the information contained therein.
DISCLAIMER
None of the Initial Purchaser, the Trustee, the Investment Manager (save in respect of the section of this Prospectus headed "Description of the Investment Manager"), the Collateral Administrator (save in respect of the section of this Prospectus headed "Description of the Collateral Administrator - General"), any Agent or any other party (including any Secured Hedging Counterparty) has separately verified the information contained in this Prospectus and, accordingly, none of the Initial Purchaser, the Trustee, the Investment Manager (save as specified above), the Collateral Administrator (save as specified above), any Agent or the Issuer (save for the Issuer as specified above in relation to the acceptance of responsibility) or any other party (including any Secured Hedging Counterparty) makes any representation, recommendation or warranty, express or implied, regarding the accuracy, adequacy, reasonableness or completeness of the information contained in this Prospectus or in any further notice or other document which may at any time be supplied in connection with the VF Notes or the Notes or accepts any responsibility or liability therefor. None of the Initial Purchaser, the Trustee, the Investment Manager, the Collateral Administrator (save as specified above), any Agent or any other party (including any Secured Hedging Counterparty) undertakes to review the financial condition or affairs of the Issuer during the life of the arrangements contemplated by this Prospectus nor to advise any investor or potential investor in the VF Notes or the Notes of any information coming to the attention of any of the aforementioned parties which is not included in this Prospectus.
OFFER/INVITATION/DISTRIBUTION RESTRICTIONS
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OF, OR AN INVITATION BY OR ON BEHALF OF THE ISSUER, THE INITIAL PURCHASER OR ANY OF THEIR AFFILIATES, THE INVESTMENT MANAGER, THE COLLATERAL ADMINISTRATOR OR ANY OTHER PERSON TO SUBSCRIBE FOR OR PURCHASE ANY OF THE DECEMBER 2010 ISSUANCE CLASS E SUBORDINATED NOTES. THE DISTRIBUTION OF THIS PROSPECTUS AND THE OFFERING OF THE DECEMBER 2010 ISSUANCE CLASS E SUBORDINATED NOTES IN CERTAIN JURISDICTIONS MAY BE RESTRICTED BY LAW. PERSONS INTO WHOSE POSSESSION THIS PROSPECTUS COMES ARE REQUIRED BY THE ISSUER AND THE INITIAL PURCHASER TO INFORM THEMSELVES ABOUT AND TO OBSERVE ANY SUCH RESTRICTIONS. IN PARTICULAR, THE COMMUNICATION CONSTITUTED BY THIS PROSPECTUS IS DIRECTED ONLY AT PERSONS WHO (I) ARE OUTSIDE THE UNITED KINGDOM AND ARE OFFERED AND ACCEPT THIS PROSPECTUS IN COMPLIANCE WITH SUCH RESTRICTIONS OR (II) ARE PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) (HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS ETC.) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 OR WHO OTHERWISE FALL WITHIN AN EXEMPTION SET FORTH IN SUCH ORDER SO THAT SECTION 21(1) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 DOES NOT APPLY TO THE ISSUER (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS"). THIS COMMUNICATION MUST NOT BE DISTRIBUTED TO, ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS COMMUNICATION RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. FOR A DESCRIPTION OF CERTAIN FURTHER RESTRICTIONS ON OFFERS AND SALES OF DECEMBER 2010 ISSUANCE CLASS E SUBORDINATED NOTES AND DISTRIBUTION OF THIS PROSPECTUS, SEE "PLAN OF DISTRIBUTION" AND "TRANSFER RESTRICTIONS" BELOW.
UNAUTHORISED INFORMATION
IN CONNECTION WITH THE ISSUE AND SALE OF THE DECEMBER 2010 ISSUANCE CLASS E SUBORDINATED NOTES, NO PERSON IS AUTHORISED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORISED BY OR ON BEHALF OF THE ISSUER, THE INITIAL
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PURCHASER, THE TRUSTEE, ANY AGENT, THE INVESTMENT MANAGER OR THE COLLATERAL ADMINISTRATOR. THE DELIVERY OF THIS PROSPECTUS AT ANY TIME DOES NOT IMPLY THAT THE INFORMATION CONTAINED IN IT IS CORRECT AS AT ANY TIME SUBSEQUENT TO ITS DATE.
GENERAL NOTICE
FOR A DISCUSSION OF CERTAIN FACTORS REGARDING THE ISSUER AND THE DECEMBER 2010 ISSUANCE CLASS E SUBORDINATED NOTES THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE DECEMBER 2010 ISSUANCE CLASS E SUBORDINATED NOTES, SEE "RISK FACTORS".
SEE "TRANSFER RESTRICTIONS" BELOW FOR CERTAIN TERMS AND CONDITIONS OF THE OFFERING OF THE DECEMBER 2010 ISSUANCE CLASS E SUBORDINATED NOTES HEREUNDER.
IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE ISSUER AND THE TERMS OF THE DECEMBER 2010 ISSUANCE CLASS E SUBORDINATED NOTES AND THE OFFERING THEREOF DESCRIBED HEREIN,…