<PAGE>
As filed with the Securities and Exchange Commission on September 24, 1998
Registration No. 333-_____
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-11
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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WESTPAC SECURITISATION MANAGEMENT PTY LIMITED
(ACN 081 709 211)
(Exact name of registrant as specified in its governing instruments)
Level 4, 60 Martin Place
Sydney, NSW 2000
Australia
Telephone: 612-9226-3589
(Address, including zip code/post code, and telephone number, including area
code, of registrant's principal executive offices)
---------------------------
Lewis E. Love, Jr.
Director & Secretary
Westpac Securitisation Management Pty Limited
575 Fifth Avenue, 39th Floor
New York, New York 10017-2422
Telephone: (212) 551-1905
(Name, address, including zip code and telephone number,
including area code, of agent for service)
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With a copy to:
Kimberley Gire Diane Citron, Esq.
Director Mayer, Brown & Platt
Westpac Securitisation Management 1675 Broadway
Pty Limited New York, New York 10019
Level 6, 60 Martin Place
Sydney, NSW 2000
Australia
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Approximate date of commencement of proposed sale to the public: From
time to time on or after the effective date of the registration statement, as
determined by market conditions.
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434
check the following box. / /
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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Proposed Proposed
Amount Maximum Maximum Amount of
Title of Each Class of to be Offering Price Aggregate Registration
Securities to Be Registered Registered Per Unit Offering Price* Fee
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<S> <C> <C> <C> <C>
Mortgage Backed Floating Rate Notes..................... $1,000,000 100% $1,000,000 $295.00
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</TABLE>
* Estimated for the purpose of calculating the registration fee.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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<PAGE>
CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
Name and Caption in Form S-11 Caption in Prospectus
----------------------------- ---------------------
<S> <C> <C> <C>
1. Forepart of Registration Statement and Outside Front Front Cover of Registration Statement; Outside Front
Cover Page of Prospectus.................................... Cover Page of Prospectus
2. Inside Front and Outside Back Cover Pages of Inside Front Cover Page of Prospectus; Outside Back
Prospectus.................................................. Cover Page of Prospectus
3. Summary Information, Risk Factors and Ratio of Summary of Terms; Risk Factors
Earnings to Fixed Charges...................................
4. Determination of Offering Price............................. *
5. Dilution.................................................... *
6. Selling Security Holders.................................... *
7. Plan of Distribution........................................ Underwriting
8. Use of Proceeds............................................. Use of Proceeds
9. Selected Financial Data..................................... *
10. Management's Discussion and Analysis of Financial The Trust Fund; The Trust Manager
Condition and Results of Operations.........................
11. General Information as to Registrant........................ Description of the Offered Notes; The Trust Manager
12. Policy with respect to Certain Activities................... Description of the Offered Notes
13. Investment Policies of Registrant........................... Description of the Offered Notes
14. Description of Real Estate.................................. The Trust Fund; Westpac Residential Loan Program
15. Operating Data.............................................. *
16. Tax Treatment of Registrant and Its Security Holders........ United States Federal Income Tax Consequences;
Certain Australian Tax Matters
17. Market Price of and Dividends on the Registrant's *
Common Equity and Related Stockholder Matters...............
18. Description of Registrant's Securities...................... Description of the Offered Notes
19. Legal Proceedings........................................... *
20. Security Ownership of Certain Beneficial Owners and The Trust Manager
Management..................................................
21. Directors and Executive Officers............................ The Trust Manager
22. Executive Compensation...................................... *
23. Certain Relationships and Related Transactions.............. *
24. Selection, Management and Custody of Registrant's Description of the Offered Notes; Westpac
Investments................................................. Residential Loan Program
25. Policies with Respect to Certain Transactions............... Description of the Offered Notes
26. Limitations of Liability.................................... Description of the Offered Notes
27. Financial Statements and Information........................ *
28. Interests of Named Experts and Counsel...................... *
29. Disclosure of Commission Position on Indemnification Part II of Registration Statement
for Securities Act Liabilities..............................
30. Quantitative and Qualitative Disclosures about Market *
Risk........................................................
</TABLE>
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* Not Applicable
<PAGE>
Information contained herein is subject to completion or amendment. A
Registration Statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the Registration Statement becomes
effective. This Prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there by any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
SUBJECT TO COMPLETION, DATED SEPTEMBER 24, 1998
PRELIMINARY PROSPECTUS
US$_______________
Westpac Securities Administration Limited
(ACN 000 049 472)
in its capacity as Trustee of the
Series 1998-2G WST Trust
US$________ Class A Mortgage Backed Floating Rate Notes due _____
US$________ Class B Mortgage Backed Floating Rate Notes due _____
Interest on the Class A Mortgage Backed Floating Rate Notes (the "Class
A Notes") and the Class B Mortgage Backed Floating Rate Notes (the "Class B
Notes" and together with the Class A Notes, the "Offered Notes") offered hereby
and issued by Westpac Securities Administration Limited solely in its capacity
as trustee of the Series 1998-2G WST Trust (the "Trust") (the "Issuer Trustee")
will be payable quarterly on the 19th day of each of February, May, August and
November (or if such 19th day is not a Business Day (as defined herein), the
next succeeding Business Day in the same month or, if not in the same month, the
immediately preceding Business Day), commencing ____________ (each, a "Payment
Date"). The principal of a class of Offered Notes will be payable on its
maturity date indicated above, subject to earlier redemption in whole or in part
as described herein. Only the Offered Notes are offered hereby.
Under certain limited circumstances, the Issuer Trustee may issue
certain additional securities, the RFSs, which in certain circumstances will
convert to RFS Class A Notes. The RFSs will be senior in priority of
distributions of principal to the Class A Notes and the RFS Class A Notes
(except with respect to enforcement, in which case such classes will be pari
passu) and senior in priority of distributions of principal and interest to the
Class B Notes. Upon conversion, the RFS Class A Notes will rank pari passu in
respect of priority of principal and interest with the Class A Notes and senior
in priority of distributions of principal and interest to the Class B Notes. The
RFSs and RFS Class A Notes are not offered hereby. See "SUMMARY OF
TERMS--Redraws, RFSs and RFS Class A Notes."
(Continued on next page)
---------------------------
PROSPECTIVE INVESTORS IN THE NOTES SHOULD REVIEW THE INFORMATION SET
FORTH UNDER "RISK FACTORS" BEGINNING ON PAGE __ HEREIN.
THE OFFERED NOTES REPRESENT OBLIGATIONS OF THE ISSUER TRUSTEE IN ITS CAPACITY AS
TRUSTEE OF THE TRUST ONLY AND DO NOT REPRESENT INTERESTS IN OR OBLIGATIONS OF
WESTPAC, THE MORTGAGE COMPANY PTY LIMITED, WESTPAC SECURITISATION MANAGEMENT PTY
LIMITED, ANY OF THEIR RESPECTIVE AFFILIATES (OTHER THAN THE ISSUER TRUSTEE) OR
ANY GOVERNMENT OR GOVERNMENTAL AGENCY. NEITHER THE OFFERED NOTES NOR THE HOUSING
LOANS ARE INSURED OR GUARANTEED BY ANY GOVERNMENT OR GOVERNMENTAL AGENCY EXCEPT
TO THE LIMITED EXTENT DESCRIBED HEREIN.
THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
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Proceeds to Issuer
Price to Public Underwriting Fees Trustee(1)
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<S> <C> <C> <C>
Class A Notes......................... % (2) %
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Class B Notes......................... % (3) %
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Total ............................. US$ (4) US$
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</TABLE>
(1) Expenses, estimated to be US$______, will be paid by Westpac Banking
Corporation.
(2) Westpac Banking Corporation will pay fees to the Underwriters equal to
___% of the Initial Invested Amount of the Class A Notes.
(3) Westpac Banking Corporation will pay fees to the Underwriters equal to
___% of the Initial Invested Amount of the Class B Notes.
(4) The total underwriting fees paid to the Underwriters are equal to
$________.
Application has been made to the London Stock Exchange Limited (the
"London Stock Exchange") for the Offered Notes to be admitted to the Official
List. Copies of this Prospectus (which includes the Appendices), which comprise
Listing Particulars with regard to the Issuer Trustee and the Offered Notes in
accordance with the listing rules made under Part IV of the Financial Services
Act of 1986, have been delivered to the Registrar of Companies in England and
Wales for registration in accordance with Section 149 of that Act.
The Offered Notes are offered by the Underwriters (as defined herein)
subject to prior sale when, as and if issued to and accepted by them, subject to
approval of certain legal matters by counsel for the Underwriters. The
Underwriters reserve the right to reject any order in whole or in part and to
withdraw, cancel or modify the offer without notice. It is expected that
delivery of the Offered Notes will be made in book-entry form through the
facilities of The Depository Trust Company ("DTC"), Cedel Bank, societe anonyme
("Cedel") and the Euroclear System ("Euroclear") on or about _________ against
payment therefor in immediately available funds.
The date of this Prospectus is __________.
<PAGE>
(Continued from the cover page)
The Offered Notes will be collateralized by a pool of variable and
fixed rate residential housing loans secured by Mortgaged Properties (as defined
herein) located in Australia (the "Housing Loans") which are repayable in
Australian dollars, rights under certain insurance policies with respect to the
Housing Loans, amounts on deposit in certain accounts, amounts invested in
Authorized Investments (as defined herein) and the Issuer Trustee's rights under
the Transaction Documents (as defined herein) (collectively, the "Trust
Assets"). The Housing Loans are from a general portfolio of residential Housing
Loans which have been originated by Westpac Banking Corporation (ARBN 007 457
141) ("Westpac") in the ordinary course of its business. The Housing Loans will
be sold either by Westpac or the Seller Trustee (as defined herein) to the
Issuer Trustee. The Offered Notes and the Transaction Documents (other than the
Security Trust Deed and certain of the Swap Agreements) are governed by, and
shall be construed in accordance with, the laws of New South Wales, Australia.
The Security Trust Deed (as defined herein) is governed by, and shall be
construed in accordance with, the laws of the Australian Capital Territory.
The Issuer Trustee was incorporated on 11th July 1944 as, and continues
to exist and operate as, a limited liability public company under the
Corporations Law of New South Wales, Australia. The Trust will be formed on or
about ____________ pursuant to the Notice of Creation of Trust (as defined
herein) executed by the Issuer Trustee and Westpac Securitisation Management Pty
Limited (the "Trust Manager"). The Issuer Trustee will issue the Offered Notes
in its capacity as trustee of the Trust.
The Offered Notes shall be subject to mandatory redemption in part on
any Payment Date if on that date there are any Principal Collections (as defined
herein) available to be distributed in relation to the Offered Notes. The
Offered Notes are also subject to optional redemption in full in certain
circumstances described herein.
The Class A Notes rank pari passu and without any preference among
themselves and the Class B Notes rank pari passu and without any preference
among themselves. The right to payment of principal of and interest on the Class
B Notes is subordinated and may be limited as more particularly described
herein. In addition, under certain limited circumstances, the Trust may issue
certain additional debt securities, the Redraw Funding Securities ("RFSs"),
which in certain circumstances will convert to RFS Class A Notes (the "RFS Class
A Notes"). Upon conversion, the RFS Class A Notes will rank pari passu in
respect of priority of principal and interest with the Class A Notes. The RFSs,
along with repayments under the Redraw Facility (as defined herein), will be
senior in priority of distributions of principal to the Class A Notes and the
RFS Class A Notes. The RFSs, the RFS Class A Notes and fees with respect to the
Redraw Facility and the Class A Notes will rank pari passu in respect to
priority of payments of interest. Payments in respect of principal and interest
in respect of the Class B Notes are subordinated to such payments in respect of
the Class A Notes, RFSs and RFS Class A Notes. See "DESCRIPTION OF THE OFFERED
NOTES--Description of the Redraw Facility, the Redraw Funding Securities and the
RFS Class A Notes," "--Interest Payable on the RFSs and the RFS Class A Notes"
and "--Subordination of the Class B Notes; Priority of Payment of Principal to
RFSs." The RFSs and the RFS Class A Notes are not being offered hereby.
The Offered Notes may not, in connection with their initial
distribution, be offered or sold, directly or indirectly, in the Commonwealth of
Australia, its territories or possessions or to any resident of Australia.
The Offered Notes should not be acquired by any associate (as defined
in Section 128F of the Income Tax Assessment Act of 1936 of Australia) of the
Issuer Trustee (which for these purposes, is Westpac and its associates).
The Issuer Trustee's liability to make payments in respect of the
Offered Notes is limited to its right of indemnity from the assets of the Trust
which are from time to time available for this purpose pursuant to the Master
Trust Deed, the Series Notice and the Security Trust Deed. All claims against
the Issuer Trustee in relation to the Offered Notes may only be satisfied out of
the assets of the Trust, and are limited in recourse to the assets of the Trust.
Each Noteholder is required to accept any distribution of moneys under
the Security Trust Deed in full and final satisfaction of all moneys owing to
it, and any debt represented by any shortfall that exists after any such final
distribution is extinguished. The Issuer Trustee shall not be liable to satisfy
any obligations or liabilities in relation to
2
<PAGE>
the Offered Notes from its personal assets except arising from (and to the
extent of ) any fraud, negligence or breach of trust on the part of the Issuer
Trustee.
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN
TRANSACTIONS THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE
SECURITIES. SPECIFICALLY, THE UNDERWRITERS MAY OVERALLOT IN CONNECTION WITH THE
OFFERING, AND MAY BID FOR, AND PURCHASE, THE SECURITIES IN THE OPEN MARKET. SEE
"UNDERWRITING."
Until 90 days after the date of this Prospectus, all dealers effecting
transactions in the Offered Notes, whether or not participating in this
distribution, may be required to deliver a Prospectus. This is in addition to
the obligation of dealers to deliver a Prospectus when acting as underwriters
and with respect to their unsold allotments or subscriptions.
THE OFFERED NOTES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
COMMISSIONER OF INSURANCE OF THE STATE OF NORTH CAROLINA, NOR HAS THE
COMMISSIONER OF INSURANCE RULED UPON THE ACCURACY OR THE ADEQUACY OF THIS
PROSPECTUS.
ANNOUNCEMENT
By distributing or arranging for the distribution of this Prospectus to
the Underwriters and the persons to whom this Prospectus is distributed, the
Issuer Trustee announces to the Underwriters and each such person that: (1) the
Offered Notes will be issued in the form of one or more Book-Entry Notes issued
to and lodged with Cede & Co. as nominee of DTC; (2) in connection with the
issue, DTC will confer rights in relation to the Offered Notes and Noteholders
and will record the existence of those rights; and (3) as a result of the issue
of the Offered Notes in this manner, such rights will be able to be created.
REPORTS TO NOTEHOLDERS
Unless and until Definitive Notes (as defined herein) are issued,
periodic and annual unaudited reports containing information concerning the
Trust and the Offered Notes will be prepared by the Trust Manager and sent on
behalf of the Issuer Trustee to Cede & Co. ("Cede"), as nominee of DTC as
registered holder of the Offered Notes pursuant to the Note Trust Deed. See
DESCRIPTION OF THE OFFERED NOTES--Book-Entry Registration" and "--Determination
Date-Calculations and Reports to Noteholders." Such reports will be made
available by the Issuer Trustee to DTC and its participants. DTC and its
participants will make such reports available to holders of interests in the
Offered Notes in accordance with the rules, regulations and procedures creating
and affecting DTC. However, such reports will not be sent directly to each
beneficial owner while the Offered Notes are in book-entry form. Upon the
issuance of fully registered, certificated Offered Notes, such reports will be
sent directly to each Noteholder. Such reports will not constitute financial
statements prepared in accordance with generally accepted accounting principles.
The Trust Manager, on behalf of the Issuer Trustee, will file with the
Securities and Exchange Commission (the "Commission") such periodic reports as
are required under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the rules and regulations of the Commission thereunder.
However, in accordance with the Exchange Act and the rules and regulations of
the Commission thereunder, the Trust Manager expects that the Issuer Trustee's
obligation to file such reports will be terminated following the end of June
1999.
3
<PAGE>
DISCLAIMERS WITH RESPECT TO SALES TO NON-U.S. INVESTORS
This section applies only to the offer to subscribe for, or purchase,
the Offered Notes in any country outside the United States of America. The
Issuer Trustee's responsibility for, and liability in respect of, this
Prospectus is limited accordingly.
This Prospectus does not constitute an offer of, or an invitation by or
on behalf of, the Issuer Trustee or the Underwriters or any of them, to
subscribe for or purchase any of the Offered Notes, and must not be relied upon
by anybody intending to purchase the Offered Notes.
No action has been or will be taken by the Issuer Trustee or the
Underwriters that would permit a public offer of the Offered Notes in any
country or jurisdiction (other than in the United States of America) where
action for that purpose is required. Accordingly, the Offered Notes may not be
offered or sold, directly or indirectly, and neither this Prospectus nor any
offering circular, prospectus, form of application, advertisement or other
offering material may be issued or distributed or published in any country or
jurisdiction, except in circumstances that will result in compliance with all
applicable laws and regulations and the Underwriters have represented that all
offers and sales by them have been and will be made on such terms. Persons into
whose possession this document comes are required by the Issuer Trustee and the
Underwriters to inform themselves about and to observe any such restrictions.
For a description of certain further restrictions on offers and sales of Offered
Notes, see "UNDERWRITING."
The Issuer Trustee accepts responsibility for the information contained
in this Prospectus (which includes the Appendices). To the best of the knowledge
and belief of the Issuer Trustee (which has taken all reasonable care to ensure
that such is the case), the information contained in this Prospectus (which
includes the Appendices) is in accordance with the facts and does not omit
anything likely to affect the import of such information.
The Currency Swap Providers (as defined herein) accept responsibility
for the information contained in "CURRENCY SWAP PROVIDERS" and "DESCRIPTION OF
THE SWAP AGREEMENTS--Description of Currency Swaps". To the best of the
knowledge and belief of the Currency Swap Providers (which have 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. The Currency Swap Providers do not accept responsibility
for any other information contained in this Prospectus. Save for the above
information, the Currency Swap Providers have not separately verified the
information contained herein. No representation, warranty or undertaking,
express or implied, is made and no responsibility or liability is accepted by
the Currency Swap Providers as to the accuracy or completeness of any of the
information in this Prospectus (other than the information described above) or
any other information supplied in connection with the Offered Notes or their
distribution.
None of the Seller Trustee, the Servicer, Trust Manager, Westpac, the
Security Trustee, the Note Trustee, any Mortgage Insurer or the Underwriters
accepts any responsibility for any information contained in this Prospectus and
none of them has separately verified the information contained herein. No
representation, warranty or undertaking, express or implied, is made and no
responsibility or liability is accepted by the Seller Trustee, the Servicer, the
Trust Manager, Westpac, the Security Trustee, the Note Trustee, any Mortgage
Insurer or the Underwriters as to the accuracy or completeness of any
information contained in this Prospectus or any other information supplied in
connection with the Offered Notes or their distribution. Each person receiving
this Prospectus acknowledges that such person has not relied on the Seller
Trustee, the Servicer, the Trust Manager, Westpac, the Security Trustee, the
Note Trustee, any Mortgage Insurer or the Underwriters nor on any person
affiliated with any of them in connection with its investigation of the accuracy
of such information or its investment decisions.
No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus in connection with
the issue or sale of the Offered Notes and, if given or made, such information
or representation must not be relied upon as having been authorized by the
Issuer Trustee or any of the Underwriters. Neither the delivery of this
Prospectus nor any sale made in connection herewith shall, under any
circumstances, create any implication that there has been no material change in
the affairs of the Issuer Trustee or any other party named in the Prospectus
since the date hereof or the date upon which this document has been most
recently
4
<PAGE>
amended or supplemented or that there has been no material adverse change in the
financial position of the Issuer Trustee or any other party named in the
Prospectus since the date hereof or the date upon which this document has been
most recently amended or supplemented or that any other information supplied in
connection with the Offered Notes is correct as of any time subsequent to the
date on which it is supplied or, if different, the date indicated in the
document containing the same. The Underwriters expressly do not undertake to
review the financial condition or affairs of the Issuer Trustee or any other
party named in the Prospectus during the life of the Offered Notes.
Neither this Prospectus nor any other information supplied in
connection with the Offered Notes is intended to provide the basis of any credit
or other evaluation and should not be considered as a recommendation by the
Issuer Trustee, the Note Trustee, the Currency Swap Providers or any of the
Underwriters that any recipient of this Prospectus, or any other information
supplied in connection with the Offered Notes, should purchase any of the
Offered Notes. Each investor contemplating purchasing any of the Offered Notes
should make its own independent investigation of the financial condition and
affairs, and its own appraisal of the creditworthiness of the Issuer Trustee and
each investor should seek its own tax, accounting and legal advice as to the
consequences of investing in any of the Offered Notes and none of the Servicer,
Trust Manager, the Seller Trustee, Westpac, the Note Trustee, the Security
Trustee, any Mortgage Insurer or any of the Underwriters accept any
responsibility or make any representation as to the tax consequences of
investing in the Offered Notes.
AVAILABLE INFORMATION
The Trust Manager has filed with the Commission a Registration
Statement (together with all amendments and exhibits thereto, referred to herein
as the "Registration Statement") under the Securities Act of 1933, as amended
(the "Securities Act") with respect to the Offered Notes offered pursuant to
this Prospectus. For further information, reference is made to the Registration
Statement and amendments thereof and to the exhibits thereto, which are
available for inspection without charge at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549;
and at the Commission's regional offices at Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661, and 7 World Trade Center, Suite
1300, New York, New York 10048. Copies of the Registration Statement and
amendments thereof and exhibits thereto may be obtained from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. The Commission also maintains a World Wide Web site
which provides on-line access to reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission at the address "http://www.sec.gov."
5
<PAGE>
AUSTRALIAN DISCLAIMERS
(a) The Offered Notes do not represent deposits or other liabilities of
Westpac or associates of Westpac.
(b) The holding of the Offered Notes is subject to investment risk,
including possible delays in repayment and loss of income and principal
invested.
(c) Neither Westpac nor any associate of Westpac in any way stands
behind the capital value and/or performance of the Offered Notes or the assets
of the Trust except to the limited extent provided in the Transaction Documents
for the Trust.
(d) None of Westpac, the Issuer Trustee, The Mortgage Company Pty
Limited (the "Servicer") or the Trust Manager guarantees the payment of interest
or the repayment of principal due on the Offered Notes.
(e) None of the obligations of the Trust Manager are guaranteed in any
way by Westpac or any associate of Westpac.
---------------------------
6
<PAGE>
ENFORCEMENT OF FOREIGN JUDGMENTS IN AUSTRALIA
The Trust Manager is an Australian proprietary company incorporated
with limited liability under the Corporations Law. Any final and conclusive
judgment of any New York State or United States Federal Court sitting in the
Borough of Manhattan in the City of New York having jurisdiction recognized by
the relevant Australian jurisdiction in respect of an obligation of the Trust
Manager in respect of an Offered Note, which is for a fixed sum of money and
which has not been stayed or satisfied in full, would be enforceable by action
against the Trust Manager in the courts of the relevant Australian jurisdiction
without a re-examination of the merits of the issues determined by the
proceedings in the New York State or United States Federal Court, as applicable,
unless: (a) the proceedings in New York State or United States Federal Court, as
applicable, involved a denial of the principles of natural justice; (b) the
judgment is contrary to the public policy of the relevant Australian
jurisdiction; (c) the judgment was obtained by fraud or duress or was based on a
clear mistake of fact; (d) the judgment is a penal or revenue judgment; or (e)
there has been a prior judgment in another court between the same parties
concerning the same issues as are dealt with in the judgment of the New York
State or United States Federal Court, as applicable. A judgment by a court may
be given in some cases only in Australian dollars. The Trust Manager expressly
submits to the jurisdiction of New York State and United States Federal Courts
sitting in the Borough of Manhattan in the City of New York for the purpose of
any suit, action or proceedings arising out of this offering. The Trust Manager
has appointed Lewis E. Love, Jr., its Director and Secretary, 575 Fifth Avenue,
39th Floor, New York, New York 10017-2422, as its agent upon whom process may be
served in any such action.
The majority of the directors and executive officers of the Trust
Manager, and certain experts named herein, reside outside the United States (in
the Commonwealth of Australia). Substantially all or a substantial portion of
the assets of all or many of such persons are located outside the United States.
As a result, it may not be possible for holders of the Offered Notes to effect
service of process within the United States upon such persons or to enforce
against them judgments obtained in United States courts predicated upon the
civil liability provisions of Federal securities laws of the United States. The
Trust Manager has been advised by its Australian counsel Allen Allen & Hemsley,
that, based on the restrictions referred to above, there is doubt as to the
enforceability in the Commonwealth of Australia, in original actions or in
actions for enforcement of judgments of United States courts, of civil
liabilities predicated upon the Federal securities laws of the United States.
EXCHANGE CONTROLS AND LIMITATIONS
Under temporary Australian foreign exchange controls, payments by an
Australian resident to, or on behalf of: (a) the Government of Iraq or its
agencies or nationals; (b) the authorities of the Federal Republic of Yugoslavia
(Serbia and Montenegro); or (c) the Government of Libya or any public authority
or controlled entity of the Government of Libya may only be made with Reserve
Bank of Australia approval. Such restrictions may change in the future. See
"RISK FACTORS--Risks of Currency Exchange Controls."
U.S. DOLLAR PRESENTATION
In this Prospectus, references to "U.S. dollars" and "US$" are
references to U.S. currency and references to "Australian dollars" and "A$" are
references to Australian currency. Unless otherwise stated herein, the
translations of Australian dollars into U.S. dollars have been made at a rate of
US$_____=A$1.00, the noon buying rate in New York City for cable transfers in
Australian dollars as certified for customs purposes by the Federal Reserve Bank
of New York on _____________. Use of such rate is not a representation that
Australian dollar amounts actually represent such U.S. dollar amounts or could
be converted into U.S. dollars at that rate.
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SUMMARY OF TERMS.................................................................................................13
STRUCTURAL CHART.................................................................................................26
CASH FLOW SUMMARY................................................................................................27
Collections.............................................................................................27
Gross Principal Collections.............................................................................27
Principal Losses........................................................................................28
Income Collections......................................................................................28
Liquidity Support.......................................................................................29
Currency Swaps..........................................................................................29
CASH FLOW CHART..................................................................................................30
RISK FACTORS.....................................................................................................31
Limited Liability under the Offered Notes...............................................................31
Risk of Equitable Assignment of Housing Loans Rather than Legal Assignment..............................31
Risk of Losses and Delays from Enforcement of the Housing Loans.........................................32
Mortgage Insurance Policies Are Subject to Exclusions and Limitations...................................32
Risks Associated with High LVR Housing Loans............................................................32
Risks Associated with Westpac's Ability to Set Rates on Variable Rate Housing Loans
at Its Discretion..............................................................................32
Ability to Change Housing Loan Features May Result in Changes to the Mortgage Pool
and Higher Rates of Principal Prepayment on the Offered Notes..................................33
Risks of Currency Exchange Controls.....................................................................33
Risks Related to a Termination of the Swap Agreements...................................................33
Delinquency and Default Risk............................................................................35
Risk of Early Defaults..................................................................................35
Principal Prepayment and Yield Considerations...........................................................35
No Gross-Up; Tax Redemption.............................................................................36
Reinvestment Risk.......................................................................................36
Servicer Risk...........................................................................................37
Subordination of the Class B Notes......................................................................37
Priority of RFSs and RFS Class A Notes Owned by Australian Resident Investors...........................37
Credit Enhancement Provides Only Limited Protection Against Losses......................................38
Limitations on the Liquidity Support....................................................................38
Exercise of Clean-up Offer May Result in Shortfalls to Noteholders......................................38
Redemption of the Notes.................................................................................38
Geographic Concentration May Affect Performance.........................................................39
Consumer Credit Legislation.............................................................................39
Risk of Commingling.....................................................................................40
Limited Liquidity.......................................................................................40
Ratings of the Notes; Factors Affecting Ability to Maintain Ratings.....................................40
Book-Entry Notes........................................................................................40
Other Considerations....................................................................................41
FORMATION OF THE TRUST...........................................................................................41
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Westpac Securitisation Trust Programme..................................................................41
Series 1998-2G WST Trust................................................................................41
Trust Assets............................................................................................42
SECURITY FOR THE NOTES...........................................................................................42
Charge..................................................................................................42
Security Trustee........................................................................................42
Nature of Security......................................................................................43
Enforcement.............................................................................................43
Priorities under the Security Trust Deed................................................................44
Security Trustee's Fees and Expenses....................................................................46
Retirement and Removal..................................................................................46
Additional Provisions of the Security Trust Deed........................................................46
THE TRUST FUND...................................................................................................47
General.................................................................................................47
Transfer and Assignment of Housing Loans................................................................47
Representations and Warranties..........................................................................48
Breach of Representations and Warranties................................................................50
Housing Loan Statistics.................................................................................50
THE ISSUER TRUSTEE...............................................................................................60
Incorporation...........................................................................................60
Share Capital...........................................................................................60
Business................................................................................................60
Experience..............................................................................................60
Directors...............................................................................................61
Powers..................................................................................................61
Duties..................................................................................................61
Delegation..............................................................................................62
Issuer Trustee Fees and Expenses........................................................................62
Removal of the Issuer Trustee...........................................................................63
Voluntary Retirement of the Issuer Trustee..............................................................63
Limitation of Issuer Trustee's Liability................................................................63
Rights of Indemnity of Issuer Trustee...................................................................64
Limitation of Seller Trustee's Liability and Rights of Indemnity........................................64
Rights of Indemnity of Seller Trustee...................................................................65
THE NOTE TRUSTEE.................................................................................................65
ORIGINATOR OF THE HOUSING LOANS..................................................................................65
Year 2000...............................................................................................65
THE SERVICER.....................................................................................................65
General.................................................................................................65
Servicing of Housing Loans..............................................................................66
Document Custody........................................................................................66
Collection and Enforcement Procedures...................................................................66
Delinquencies and Mortgagee in Possession with respect to the Securitized Portfolios....................67
THE TRUST MANAGER................................................................................................71
General.................................................................................................71
Incorporation...........................................................................................71
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Share Capital...........................................................................................71
Directors...............................................................................................71
Duties and Role of the Trust Manager....................................................................71
Removal of the Trust Manager............................................................................72
Voluntary Retirement of the Trust Manager...............................................................73
Limitation of Trust Manager's Liability.................................................................73
WESTPAC RESIDENTIAL LOAN PROGRAM.................................................................................73
Origination of Housing Loans............................................................................73
Underwriting of Housing Loans...........................................................................73
Servicing of Housing Loans..............................................................................74
Housing Loan Products...................................................................................74
Housing Loan Features...................................................................................75
THE MORTGAGE INSURANCE POLICIES..................................................................................78
Mortgage Insurance Policies--General....................................................................78
The HLIC Mortgage Pool Insurance Policy.................................................................78
Primary Mortgage Insurance Policies.....................................................................82
PREPAYMENT AND YIELD CONSIDERATIONS..............................................................................84
General.................................................................................................84
Prepayments.............................................................................................84
Weighted Average Lives .................................................................................84
DESCRIPTION OF THE OFFERED NOTES.................................................................................88
General.................................................................................................88
Collections and Payment.................................................................................89
Collections.............................................................................................89
Calculation of Total Available Funds....................................................................90
Available Income........................................................................................90
Principal Draws.........................................................................................92
Liquidity Draws.........................................................................................92
Remaining Liquidity Shortfall...........................................................................92
Distribution of Total Available Funds...................................................................93
Excess Available Income.................................................................................95
Gross Principal Collections.............................................................................96
Principal Collections...................................................................................97
Distribution of Principal Collections...................................................................98
Payments of Principal on the Notes......................................................................98
Application of Principal Charge Offs...................................................................101
Payments into US$ Account..............................................................................103
Payments out of US$ Account............................................................................103
Prepayment Costs and Prepayment Benefits...............................................................103
Description of the Redraw Facility, the Redraw Funding Securities and the RFS Class A Notes............103
Redraw Facility........................................................................................104
Issuance of Redraw Funding Securities ("RFS")..........................................................107
RFS Class A Notes......................................................................................108
Form of the RFSs and the RFS Class A Notes.............................................................108
Interest Payable on the RFSs and the RFS Class A Notes.................................................108
Subordination of Class B Notes; Priority of Payment of Principal to RFSs...............................109
Substitution of Housing Loans..........................................................................109
Prescription...........................................................................................109
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Clean-up Offer.........................................................................................109
Redemption of the Notes................................................................................110
Withholding or Tax Deductions..........................................................................110
Redemption of the Offered Notes for Taxation or Other Reasons..........................................110
Termination of the Trust...............................................................................111
Trust Accounts.........................................................................................111
General................................................................................................112
Determination Date--Calculations and Reports to Noteholders............................................112
Book-Entry Registration................................................................................114
Definitive Notes.......................................................................................117
Modification of Master Trust Deed, Series Notice and the Note Trust Deed Without Noteholder Consent....117
Modification of Master Trust Deed, Series Notice and the Note Trust Deed With Noteholder Consent.......118
Meetings of Voting Mortgagees..........................................................................118
Voting of Class A Noteholders; Modification; Consents; Waiver..........................................118
Voting of Class B Noteholders; Modifications; Consents; Waiver.........................................119
Events of Default; Rights Upon Event of Default........................................................120
Enforcement of the Security Trust Deed.................................................................120
Certain Covenants......................................................................................123
Annual Compliance Statement............................................................................124
The Note Trustee.......................................................................................124
Governing Law..........................................................................................124
London Stock Exchange Listing..........................................................................124
DESCRIPTION OF THE SERVICING AGREEMENT..........................................................................124
General................................................................................................125
Servicing..............................................................................................125
Document Custody.......................................................................................128
Amendment..............................................................................................129
Termination of Servicing Agreement.....................................................................129
THE LIQUIDITY FACILITY..........................................................................................130
General Description....................................................................................130
Liquidity Draws........................................................................................130
Conditions Precedent to a Liquidity Draw...............................................................130
Deposit into a Collateral Account......................................................................130
Interest on Liquidity Draws............................................................................131
Commitment Fee.........................................................................................131
Repayment of Liquidity Drawings........................................................................131
Events of Default......................................................................................131
Consequences of Default................................................................................132
Termination............................................................................................132
DESCRIPTION OF THE SWAP AGREEMENTS..............................................................................132
Description of Interest Rate Swap Agreements...........................................................132
Description of Currency Swaps..........................................................................134
Replacement of Currency Swaps..........................................................................136
Downgrade of Currency Swap Providers...................................................................137
Cross Support..........................................................................................137
CURRENCY SWAP PROVIDERS.........................................................................................137
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CERTAIN LEGAL ASPECTS OF THE HOUSING LOANS......................................................................138
General................................................................................................138
Nature of Housing Loans as Security....................................................................138
Enforcement of Housing Loans...........................................................................140
Penalties and Prohibited Fees..........................................................................141
Consumer Credit Legislation............................................................................141
Bankruptcy.............................................................................................142
Environmental..........................................................................................142
Insolvency Considerations..............................................................................143
Treatment of Interest Payments with respect to Australian Housing Loans................................143
USE OF PROCEEDS.................................................................................................143
UNITED STATES FEDERAL INCOME TAX CONSEQUENCES...................................................................143
General................................................................................................144
Sales of Notes.........................................................................................144
Market Discount........................................................................................144
Premium................................................................................................145
Backup Withholding.....................................................................................145
AUSTRALIAN TAX MATTERS..........................................................................................145
Payments of Principal, Premiums and Interest...........................................................146
Profit on Sale.........................................................................................146
Other Taxes............................................................................................147
ERISA CONSIDERATIONS............................................................................................147
RATINGS OF THE NOTES............................................................................................148
LEGAL INVESTMENT CONSIDERATIONS.................................................................................148
UNDERWRITING....................................................................................................148
United Kingdom.........................................................................................149
Australia..............................................................................................150
LISTING AND GENERAL INFORMATION.................................................................................150
Listing................................................................................................150
Authorization..........................................................................................150
Litigation.............................................................................................150
Euroclear and Cedel....................................................................................150
Documents Available for Collection and Inspection......................................................150
Temporary Australian Foreign Exchange Controls.........................................................151
Consents to Opinions...................................................................................152
LEGAL MATTERS...................................................................................................152
APPENDIX I - GLOSSARY OF AUSTRALIAN LEGAL TERMS.................................................................I-1
APPENDIX II - TERMS AND CONDITIONS OF THE CLASS A NOTES........................................................II-1
APPENDIX III - TERMS AND CONDITIONS OF THE CLASS B NOTES......................................................III-1
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SUMMARY OF TERMS
This Summary of Terms is qualified in its entirety by reference to the
detailed information appearing elsewhere in this Prospectus. Certain capitalized
terms used in this Summary of Terms are defined elsewhere in this Prospectus on
the pages indicated in the "Index of Defined Terms."
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Issuer Trustee....................... Westpac Securities Administration Limited (ACN 000 049 472), a limited
liability public company under the Corporations Law of New South Wales,
Australia, a wholly owned, indirect subsidiary of Westpac Banking
Corporation, in its capacity as trustee of the Series 1998-2G WST Trust
(the "Trust") (the "Issuer Trustee") will issue the Offered Notes.
Approved Seller...................... Either Westpac Banking Corporation (ARBN 007 457 141) ("Westpac"), a
corporation organized under the laws of New South Wales in the
Commonwealth of Australia, in its capacity as seller under a notice of
sale (a "Sale Notice") between Westpac and the Issuer Trustee or the
Seller Trustee (as defined herein) under a Sale Notice between the Seller
Trustee and the Issuer Trustee. Westpac and Westpac Securities
Administration Limited, in its capacity as Seller Trustee, are referred
to herein as "Approved Sellers."
Servicer............................. The Mortgage Company Pty Limited (ACN 070 968 302) (the "Servicer" or
"TMC"), a wholly owned direct subsidiary of Westpac, in its capacity as
servicer under the Servicing Agreement among Westpac, the Servicer and
the Issuer Trustee dated February 18, 1997, as amended from time to time
(the "Servicing Agreement").
Trust Manager and Registrant......... Westpac Securitisation Management Pty Limited (ACN 081 709 211) (the
"Trust Manager"), a wholly owned indirect subsidiary of Westpac, in its
capacity as trust manager under the Master Trust Deed, dated February 14,
1997 (the "Master Trust Deed"), as amended by the Series Notice (as
defined herein), between the Issuer Trustee and the Trust Manager dated
on or about the Closing Date. See "FORMATION OF THE TRUST."
Note Trustee......................... _________________ (the "Note Trustee"), in its capacity as note trustee
under the Note Trust Deed among the Issuer Trustee, the Trust Manager and
the Note Trustee dated on or about ________, as amended from time to time
(the "Note Trust Deed"). See "THE NOTE TRUSTEE."
Security Trustee..................... Perpetual Trustee Company Limited (ACN 000 001 007) (the "Security
Trustee"), a company within the Perpetual group with its holding company
being Perpetual Trustees Australia Limited (ACN 000 431 827), in its
capacity as security trustee under the Security Trust Deed among the
Issuer Trustee, the Trust Manager, the Note Trustee and the Security
Trustee dated on or about _________, as amended from time to time (the
"Security Trust Deed").
Seller Trustee....................... Westpac Securities Administration Limited in its capacity as trustee of
any other WST trust established under the Master Trust Deed (in that
capacity, the "Seller Trustee"). The Seller Trustee may sell housing
loans relating to such other trusts to the Trust and may repurchase the
Housing Loans relating to the Trust upon the exercise of the Clean-up
Offer (as defined herein).
Paying Agents........................ ______________________, will act as the principal paying agent
("Principal Paying Agent"). The Principal Paying Agent and any other
paying agents are referred to herein as the "Paying Agents".
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Roles of the Security Trustee and
Note Trustee.................... The structure of the Series 1998-2G WST Trust transaction employs several
different trustees. The Security Trustee is the entity that holds a
security interest over the Trust Assets (as defined herein) and has the
responsibility of securing such assets and distributing the proceeds received
upon the liquidation of such assets upon the occurrence of a default and enforcement of
the security interest. The Note Trustee is the entity which represents the interests
of the Offered Noteholders. The provisions of the Security Trust Deed require the
Security Trustee to consult with, and obtain the consent of, the Note Trustee
before taking certain actions. Thus, not only does the Security Trustee owe
fiduciary duties to the Note Trustee (and the Offered Noteholders and the other
secured creditors), it has contractual obligations to consult with and act at the
Note Trustee's direction in accordance with the Security Trust Deed. The Note
Trustee owes fiduciary duties to the Offered Noteholders and must act in
accordance with those duties when directing the Security Trustee to act or
not to act. The roles of the Note Trustee and the Security Trustee together
approximate the role of an indenture trustee in a typical United States
transaction.
Securities Offered................... The Issuer Trustee, in its capacity as trustee of the Series 1998-2G WST
Trust, which was formed under the laws of New South Wales, will issue and
hereby offer the following Mortgage Backed Floating Rate Notes:
Class A Mortgage Backed Floating Rate Notes due _________ in the
aggregate principal amount of US$___________(the "Class A Notes").
Class B Mortgage Backed Floating Rate Notes due _________ in the
aggregate principal amount of US$_________ (the "Class B Notes").
The Class A Notes and the Class B Notes are collectively referred to
herein as the "Offered Notes."
Redraws, RFSs and RFS Class A
Notes........................... Certain Housing Loans provide the relevant Borrower (as defined herein)
with the ability to "reborrow" from Westpac amounts that have been
previously paid by the Borrower which are in excess of scheduled repayments required
under the contractual amortization schedule for the relevant Housing Loan.
Such amounts drawn by Borrowers on principal repayments made in excess of
scheduled payments are called "redraws". Westpac is entitled to be reimbursed by
the Issuer Trustee for such redraws from Gross Principal Collections (as defined
herein) prior to any payments being made on the Offered Notes from such Collections.
On or before the Closing Date, Westpac as provider of the Redraw
Facility (as defined herein) will enter into a Redraw Facility Agreement (as
defined herein). If Gross Principal Collections for a period are insufficient
to fund a redraw provided to a Borrower by Westpac, drawings will be made under the
Redraw Facility Agreement to fund the redraw (up to the limit set out in the
Redraw Facility Agreement).
If there are insufficient amounts available under the
Redraw Facility Agreement to fund redraws, the Trust Manager may direct the Issuer
Trustee to issue additional debt securities known as "Redraw Funding
Securities" or "RFSs". The RFSs and payments under the Redraw Facility
Agreement will be senior in priority of distributions of principal to the Class A
Notes and RFS Class A Notes (as defined herein). Interest on the RFSs, RFS Class A
Notes and Class A Notes and fees with respect to the Redraw Facility Agreement
will rank pari passu in respect of priority.
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If any RFSs remain outstanding for a period of five or more Collection Periods
(as defined herein), they shall convert into RFS Class A Notes (the "RFS Class A
Notes"), the holders of which will rank pari passu with the Class A Notes as to
the payment of interest and principal and have certain rights of payment senior to
those rights of holders of the Class B Notes. The RFSs, RFS Class A Notes and the
Offered Notes are referred to herein as the "Notes."
The RFSs and RFS Class A Notes, if issued, will be denominated in Australian dollars
and issued in Australia to Australian residents only. The RFSs and
RFS Class A Notes will be in book-entry form and will not be registered with the
Securities and Exchange Commission in the United States and will not be registered
with the relevant companies authority in Australia. The RFSs and RFS Class A Notes
are not offered hereby.
For a description of the RFSs, the RFS Class A Notes and the priority of their payment,
see "Priority of Distribution with respect to the Offered Notes, RFSs and RFS Class A Notes"
herein and "DESCRIPTION OF THE OFFERED NOTES--Description of the Redraw Facility,
Redraw Funding Securities and the RFS Class A Notes," "--Interest Payable on the
RFSs and the RFS Class A Notes" and "--Subordination of the Class B Notes;
Priority of Principal Payments to RFSs" herein.
Cut-Off Date......................... __________ (the "Cut-Off Date").
Closing Date......................... __________ (the "Closing Date").
Maturity Date........................ __________(the "Maturity Date").
Terms of the Offered Notes
General......................... Payments of interest and principal on each class ("Class") of Offered
Notes will be made quarterly on the 19th day of each of February, May,
August and November (or if such 19th day is not a Business Day, the next
succeeding Business Day in the same month or, if not in the same month,
the immediately preceding Business Day), commencing on _______(each such
date, a "Payment Date").
As used in this Prospectus, "Business Day" means (a) in relation to the Note Trust
Deed, the Agency Agreement and any Note, any day, other than a Saturday, Sunday or
public holiday, on which banks are open for business in London and New York City;
(b) in relation to US$ payments under a Currency Swap, any day, other than a
Saturday, Sunday or public holiday, on which banks are open for business in
London and New York City; and (c) in relation to A$ payments under the Currency
Swap and any other Transaction Document, any day, other than a Saturday, Sunday or
public holiday, on which banks are open for business in Sydney. If a public
holiday is occurring in any of the referenced locales, then such day is not a
Business Day, and no scheduled payments will be made on such day.
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Payments of interest and principal will be made to the holders of the Offered Notes
(the "Offered Noteholders") of record as of the day which is two Business Days
preceding the Payment Date (so long as the Offered Notes are held in book-entry form)
or the last day of the prior calendar month (if Definitive Notes have been
issued) (such day, the "Record Date"). Each Offered Note bears interest on its
Invested Amount. The "Invested Amount" of an Offered Note is equal to the Initial
Invested Amount (as defined herein) of such Offered Note less all payments
previously made in respect of principal in respect of such Offered Note. The "Initial
Invested Amount" of a Class of Notes is its principal balance on the date of its
issuance. Each "Interest Period" (other than the initial Interest Period and the
final Interest Period) with respect to the Offered Notes commences on (and includes)
a Payment Date and ends on (but excludes) the next Payment Date. The initial
Interest Period with respect to the Offered Notes commences on (and includes)
the Closing Date and ends on (but excludes) the first Payment Date. The
final Interest Period ends on (but excludes) the Maturity Date.
The "Interest Rate" for the Class A Notes for a particular Interest Period is equal to
USD-LIBOR-BBA on the related Interest Determination Date (as defined herein)
plus _____%. The "Interest Rate" for the Class B Notes for a particular Interest
Period is equal to USD-LIBOR-BBA on the related Interest Determination Date plus
_____%. The Interest Rate on the Class A Notes for the first Interest Period will
be determined on ________. The Interest Rate on the Class B Notes for the first
Interest Period will be determined on ________. See "DESCRIPTION OF THE OFFERED
NOTES--Calculation of USD-LIBOR-BBA" herein.
On the second London banking day before the beginning of each Interest Period
(each an "Interest Determination Date")____________, (the "Agent Bank") will determine
the rate "USD-LIBOR-BBA" as the applicable Floating Rate Option under the Definitions
of the International Swaps and Derivatives Association, Inc. ("ISDA") (the "ISDA
Definitions") being the rate applicable to any Interest Period for three-month
deposits in U.S. dollars which appears on the Telerate Page 3750 as of 11:00 A.M.,
London time, on the Interest Determination Date. If such rate does not appear on the
Telerate Page 3750, the rate for that Interest Period will be determined as if
the Issuer Trustee and Agent Bank had specified "USD-LIBOR-Reference Banks" as
the applicable Floating Rate Option under the ISDA Definitions. "USD-LIBOR-Reference
Banks" means that the rate for an Interest Period will be determined on the basis of
the rates at which deposits in U.S. Dollars are offered by the Reference Banks
(being four major banks in the London interbank market) at approximately 11:00
A.M., London time, on the Interest Determination Date to prime banks in the
London interbank market for a period of three months commencing on the first day
of the Interest Period and in a Representative Amount (as defined in the
ISDA Definitions). The Agent Bank will request the principal London office of
each of the Reference Banks to provide a quotation of its rate. If at least two
such quotations are provided, the rate for that Interest Period will be the
arithmetic mean of the quotations. If fewer than two quotations are provided as
requested, the rate for that Interest Period will be the arithmetic mean of the
rates quoted by major banks in New York City, selected by the Agent Bank, at
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approximately 11:00 A.M., New York City time, on that Interest Determination Date
for loans in U.S. dollars to leading European banks for a period of three
months commencing on the first day of the Interest Period and in a Representative
Amount, provided that on the first day of the first Interest Period USD-LIBOR-BBA
shall be an interpolated rate calculated with reference to the period from (and
including) the Closing Date to (but excluding) the first Payment Date.
With respect to any Payment Date, interest on a Class of Offered Notes will be calculated
as the product of (a) the Invested Amount of such Class as of the first day of that
Interest Period after giving effect to any payments of principal to be made thereon;
(b) the Interest Rate for such Class for the related Interest Period; and (c) a
fraction, the numerator of which is the actual number of days in that Interest
Period and the denominator of which is 360 days (such product with respect to a
Payment Date, "Interest"); provided, however, that once the Stated Amount of
such Class has been reduced to zero, the related Class will no longer accrue
interest because the related Class will have been redeemed pursuant to the terms
of the Transaction Documents. The "Stated Amount" of a Note is the Invested Amount
of the Note less the Carryover Charge Offs (as defined herein) applied against it.
If Total Available Funds (as defined herein) available after payment of any
Accrued Interest Adjustment (as defined herein), interest or fees payable under
the Liquidity Facility (as defined herein), Trust Expenses (as defined
herein) and certain amounts payable to any Interest Rate Swap Provider (as defined
herein) are sufficient to pay Interest on each Class of Offered Notes, Interest will
be payable in arrears on each Payment Date to each Class of Offered Notes in respect
of the Interest Period ending on that Payment Date. If Total Available Funds are
available on a Payment Date for the payment of Interest on the Offered Notes,
failure to pay such Interest within 10 Business Days of the date such payment is
due will be an event of default under the Security Trust Deed. If Total Available
Funds available after payment of Trust Expenses and certain amounts payable under
any Fixed Rate and Variable Rate Basis Swaps are insufficient to pay full
Interest on all Classes of Notes for an Interest Period, Total Available Funds
available for the payment of Interest on the Notes on the Payment Date will be paid
in the following order of priority either through a direct payment in Australian
dollars with respect to the RFSs, the RFS Class A Notes or any payment in respect of
the Redraw Facility (as defined herein) or through a payment to the Currency Swap
Providers (as defined herein) with respect to the Offered Notes:
(i) pro rata, to the Class A Notes, RFS Class A Notes (if any), RFSs (if any) and any fee
or outstanding amount payable under the Redraw Facility, based on their related interest
or income entitlements, as the case may be; and (ii) any remaining Total Available Funds, to
the Class B Notes. See "DESCRIPTION OF THE OFFERED NOTES" herein.
Principal............................ On each Payment Date, Gross Principal Collections (as described herein)
will be used first to reimburse Westpac for any Redraws (as defined
herein) funded by Westpac during the related Collection Period. See
"WESTPAC RESIDENTIAL LOAN PROGRAM--Housing Loan Features--Redraw." Any
amount of Gross Principal Collections remaining after such reimbursement
will be distributed in the following order of priority:
(i) to Westpac as reimbursement for any outstanding Redraws, to the
extent not otherwise reimbursed;
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(ii) to Westpac, in its capacity as the provider of the Redraw Facility
(the "Redraw Facility Provider"), to repay any Principal Outstanding (as
defined herein) under the Redraw Facility Agreement;
(iii) to fund any Principal Draw (as defined herein) for such Payment
Date; and
(iv) to any holder of an RFS, in chronological order of issuance, until
each such RFS is repaid in full.
Any amount of Gross Principal Collections remaining after the distributions
described in clauses (i) through (iv) above will be referred to herein as "Net
Principal Collections." On any Payment Date, Net Principal Collections will be
available to pay any RFS Class A Noteholder and the Currency Swap Providers
to enable the Issuer Trustee to make payments to the Class A Noteholders and
Class B Noteholders in the amounts and priorities set forth herein under
"DESCRIPTION OF THE OFFERED NOTES--Payments of Principal on the Notes."
Priority of Distribution with
respect to the Offered Notes,
RFSs and RFS Class A Notes...... The Class A Notes rank pari passu and without any preference among
themselves and the Class B Notes rank pari passu and without any
preference among themselves. The right to payment of principal of and
interest on the Class B Notes is subordinated and may be limited as more
particularly described herein. In addition, under certain limited
circumstances, the Trust may issue RFSs, which in certain circumstances will
convert to RFS Class A Notes. Upon conversion, the RFS Class A Notes will
rank pari passu in respect of priority of payment of principal and interest with the
Class A Notes. The RFSs and any repayments under the Redraw Facility will be senior
to the Class A Notes and the RFS Class A Notes in priority of distributions of
principal. Interest on the RFSs, the RFS Class A Notes and the Class A Notes and
fees with respect to the Redraw Facility will rank pari passu in respect of
priority. Payments of principal and interest in respect of the Class B Notes
are subordinated to the extent set forth herein to such payments in respect of
Class A Notes, RFSs and RFS Class A Notes. See "RISK FACTORS--Priority of RFSs and
RFS Class A Notes Owned by Australian Resident Investors" and "DESCRIPTION OF
THE OFFERED NOTES--Description of the Redraw Facility, the Redraw Funding
Securities and the RFS Class A Notes," "--Interest Payable on the RFSs and the
RFS Class A Notes" and "--Subordination of the Class B Notes; Priority of Principal
Payments to RFSs."
Credit Enhancement................... Credit enhancement with respect to the Class A Notes will be provided by
(i) the Mortgage Insurance Policies, (ii) subordination of the Excess
Available Income (as defined herein) and (iii) the subordination of
payments of the Class B Notes to payments to the Class A Notes. Credit
enhancement with respect to the Class B Notes will be provided by (i) the
Mortgage Insurance Policies and (ii) subordination of the Excess
Available Income.
A. Mortgage Insurance
Policies..................... On or before the Closing Date, a mortgage pool insurance policy (the
"Mortgage Pool Insurance Policy") will be provided by Housing Loans
Insurance Corporation Limited (ACN 071 466 344) of 31 Market Street, Sydney NSW 2000,
Australia ("HLIC") to the Issuer Trustee to cover losses in respect of each Housing
Loan that is not subject to a primary mortgage insurance policy (a "PMI Policy"
and, together with the Mortgage Pool Insurance Policy, the "Mortgage Insurance
Policies"). The Mortgage Pool Insurance Policy generally applies to loans with a
Loan to Value Ratio ("LVR") of 80% or less at the Cut-Off Date. The Mortgage Pool
Insurance Policy will cover losses up to a maximum aggregate amount of A$________.
HLIC is a private insurance company which is a subsidiary of GE Capital Australia
(ACN 008 562 534).
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For a description of HLIC, see "THE MORTGAGE INSURANCE POLICIES--The HLIC
Mortgage Pool Insurance Policy."
Each Housing Loan with an LVR of greater than 80% at the time of origination (or a
lower LVR where required by Westpac's standard credit policy) will have been
insured under a PMI Policy issued by one of the following: Royal & Sun Alliance
Lenders Mortgage Insurance Limited (ACN 001 825 725) of Level 9, 465 Victoria
Avenue, Chatswood NSW ("Royal & Sun"), MGICA Limited (ACN 000 511 071) of Level
23 AMP Centre, 50 Bridge Street, Sydney NSW ("MGICA"), Westpac Lenders Mortgage
Insurance Limited (ACN 074 042 934) of Level 11, 50 Pitt Street, Sydney NSW
("WLMI") or HLIC. Approximately _____% of the Housing Loans are subject to a PMI
Policy. Each Approved Seller will equitably assign its interest in each PMI
Policy to the Issuer Trustee on the Closing Date.
These Mortgage Insurance Policies are intended to enhance the likelihood of regular
receipt by the holders of the Notes of the full amount of interest and principal payments
due to such holders and to provide holders of the Notes limited protection against losses on
the Housing Loans. See "THE MORTGAGE INSURANCE POLICIES" herein.
HLIC, Royal & Sun, MGICA and WLMI are referred to herein as "Mortgage Insurers."
B. Subordination of Excess
Available Income............ On each Payment Date, Excess Available Income will be applied either in
reduction of any current or outstanding Principal Charge Offs (as defined
herein) or as repayment of any unrepaid Principal Draws on such Payment Date. The
application of such amounts, if any, will reduce the likelihood of the Offered
Noteholders receiving less than their Initial Invested Amount on or prior to the
Maturity Date.
C. Subordination of
Class B Notes............... The rights of the holders of the Class B Notes to receive payments of
Interest on each Payment Date will be subordinated to such rights of the
holders of the RFSs (if any), Class A Notes, RFS Class A Notes (if any) and the
Redraw Facility Provider to the extent set forth herein. In addition, the rights of
the holders of the Class B Notes to receive distributions of principal on each
Payment Date generally will be subordinated to such rights of the holders
of the RFSs (if any) and the Redraw Facility Provider with respect to
repayments pursuant to the Redraw Facility Agreement and to the holders of the Class
A Notes and RFS Class A Notes (if any). For a description of the priority among
the RFSs, Class A Notes, RFS Class A Notes and the Redraw Facility Provider, see
"Priority of Distribution with respect to the Offered Notes, RFSs and RFS Class A
Notes" herein. Further, any Principal Charge Offs will be applied first in
reduction of the principal balance of the Class B Notes. The subordination described
above is intended to enhance the likelihood of regular receipt by the
holders of the Class A Notes of the full amount of interest and principal payments
due to such Noteholders and to afford such holders protection against losses on the
Housing Loans. See "DESCRIPTION OF THE OFFERED NOTES--Collections and Payment"
herein.
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Security for the Offered Notes
General.............................. The Offered Notes are debt obligations of the Issuer Trustee in its
capacity as trustee of the Trust only (and therefore the Issuer Trustee's
liability to make payments of interest and principal on the Offered Notes is limited
to the collections received by the Issuer Trustee from the Trust Assets) and except
in certain limited circumstances are not the personal obligation of the Issuer
Trustee. See "THE ISSUER TRUSTEE--Limitation of Issuer Trustee's
Liability." The Offered Notes are issued with the benefit of, and subject to the
terms of, the Transaction Documents. The Issuer Trustee's liability in respect of
the Offered Notes is limited to the assets of the Trust available in accordance with
the terms of the Transaction Documents to meet its obligations in relation to the
Offered Notes and, except in certain limited circumstances, the Issuer Trustee
will not be personally liable in respect of the Offered Notes.
A. The Housing Loans............ The Housing Loans will consist of _____ Housing Loans with an aggregate
Balance Outstanding on the Cut-Off Date of A$________. The Housing Loans
are also referred to herein as the "Mortgage Pool." The Housing Loans
will be secured by Mortgaged Properties (as defined herein) located in
any of the six states or two territories of Australia. A "Mortgaged
Property" means the land, including all improvements thereon, that is the
subject of a Mortgage.
Generally each Housing Loan is secured by a registered first ranking mortgage over
the related Mortgaged Property or if the Housing Loan is not secured by a first
ranking mortgage the Approved Seller will assign to the Issuer Trustee all prior
ranking registered mortgages in relation to that Housing Loan. "Registered" means
the mortgage has been filed with the lands office in the relevant Australian State or
Territory, granting certain rights with respect to the applicable Mortgaged
Property. See "APPENDIX I--GLOSSARY OF AUSTRALIAN LEGAL TERMS."
Each Housing Loan requires that the borrowers on such
Housing Loan (each, a "Borrower") make a minimum payment (the "Scheduled Payment")
on or before the due date for such Scheduled Payment under the relevant
Housing Loan documents. If Scheduled Payments are not received with respect to
certain Housing Loans on the related due date either a default rate of interest may
be charged on any overdue amounts or there will be a compounding of interest. All
weighted averages specified herein are weighted based on the Cut-Off Date
Balances Outstanding of the Housing Loans. With respect to each Housing Loan, the
"Cut-Off Date Balance Outstanding" is the unpaid principal balance of such Housing
Loan as of the close of business on the Cut-Off Date. All Housing Loan statistics
set forth herein are based on principal balances, interest rates, terms to
maturity, mortgage loan counts and similar statistics as of the Cut-Off Date, unless
indicated to the contrary herein. References to percentages of the Housing
Loans mean percentages of the Cut-Off Date Balance Outstanding.
The Housing Loans bear interest at variable and fixed rates (the "Mortgage
Rates") which, as of the Cut-Off Date, range from approximately ____% per annum
to ____% per annum. The weighted average Mortgage Rate of the Housing Loans on the
Cut-Off Date is approximately ____% per annum. The Cut-Off Date Balances
Outstanding of the Housing Loans ranged from approximately A$______ to A$______.
The average Cut-Off Date Balance Outstanding of the Housing Loans is
approximately A$______. The weighted average original term to stated maturity
of the Housing Loans is approximately _____ months. The weighted average
remaining term to stated maturity of the Housing Loans is approximately ______
months. As of the Cut-Off Date, the weighted average number of months that had
elapsed since origination of the Housing Loans is approximately ____ months.
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Housing Loans representing approximately ____% of the Cut-Off Date Pool Balance are
secured by Mortgaged Properties which are investment properties (based solely upon
statements made by the related Mortgagors at the time of origination of the related
Housing Loans).
The lowest and highest LVR as of the Cut-Off Date of the Housing Loans were
approximately ____% and _____%. LVR is calculated as a fraction, expressed as
a percentage, the numerator of which is the outstanding amount of the Housing
Loan, plus any other amount serviced on the Servicing System of the Servicer (the
"Mortgage Servicing System") and secured by the relevant Mortgage Property at the
Cut-Off Date and the denominator of which is the aggregate value of the Mortgaged
Property subject to the related Mortgage for that Housing Loan. The Mortgaged
Property is generally valued at the time of origination.
B. Mortgage Insurance See "Mortgage Insurance Policies" in this summary and "THE MORTGAGE
Policies..................... INSURANCE POLICIES" herein.
C. Collections Account.......... Westpac or the Servicer will be required to remit
Collections received with respect to the Housing Loans during a Collection Period
to one or more accounts in the name of the Issuer Trustee (the "Collections
Account"). Initially, the Collections Account shall be maintained with Westpac.
Under certain conditions described herein, such remittances may be made on a
quarterly basis, two Business Days prior to the related Payment Date. If such
conditions are not met, the Servicer shall deposit all Collections in its possession
or control into the Collections Account no later than five Business Days following
receipt. See "DESCRIPTION OF THE OFFERED NOTES--Collections and Payment."
D. Liquidity Support............ 1. Principal Draws: If the Trust Manager determines on any Collection
Determination Date that the Available Income (as defined herein) of the
Trust for a Collection Period is insufficient to meet Total Payments of
the Trust on the following Payment Date (a "Payment Shortfall"), then
Principal Collections collected during that Collection Period can be used
to fund the Payment Shortfall (a "Principal Draw"). See "DESCRIPTION OF
THE OFFERED NOTES--Principal Draws" below.
Amounts paid from any Principal Collections in this way will be reimbursed
through any Excess Available Income to the extent available in subsequent periods
after all Principal Charge Offs and Carryover Charge Offs (as defined herein)
have been met out of that Excess Available Income for the relevant period. If there
is insufficient Excess Available Income to reimburse Principal Draws, the principal
repayable on the Notes at maturity may be reduced by an amount equal to the amount
of any such shortfall.
2. Liquidity Facility: Under the Liquidity Facility, Westpac in its capacity as the provider
of the Liquidity Facility (the "Liquidity Facility Provider") agrees to make
advances to the Issuer Trustee for the purpose of temporarily funding certain
income shortfalls in the Trust, up to an aggregate amount being the lesser of: (1)
A$_______, (2) the Unpaid Balance of all Performing Loans from time to time, and
(3) any lesser amount as is agreed in writing between the Liquidity Facility
Provider, the Issuer Trustee, the Trust Manager and the Rating Agencies, as such
amount may be reduced or cancelled under the Liquidity Facility (the "Liquidity
Limit"). The "Unpaid Balance" of a Housing Loan, means the sum of (a) the unpaid
principal amount of that Housing Loan; and (b) the unpaid amount of all finance
charges, interest payments and other amounts accrued on or payable under or in
connection with that Housing Loan or the related Mortgage or other rights relating
to the Housing Loan.
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A "Performing Loan" at any date is a Housing Loan which is not
Delinquent or has been Delinquent for less than 90 consecutive days, or if it has
been Delinquent for 90 or more consecutive days, was insured under a Mortgage
Insurance Policy at the date of the Liquidity Facility. A Housing Loan is
"Delinquent" if the related Borrower fails to pay any amount due on the related due
date. Delayed payments arising from agreed payment holidays based on early
repayments, or from maternity or paternity leave repayment reductions will not, by
themselves, lead to a Housing Loan being considered Delinquent. See "WESTPAC
RESIDENTIAL LOAN PROGRAM--Housing Loan Features" and "THE LIQUIDITY FACILITY" herein.
E. Transaction Documents........ Master Trust Deed and Series Notice: The Master Trust Deed, which is governed by the laws
of New South Wales, Australia, provides for the creation of an unlimited number of WST
trusts. Each WST trust is a separate and distinct trust fund. The Series 1998-2G
WST Trust (the "Trust") will be created pursuant to the Master Trust Deed, the
Notice of Creation of Trust and a series notice (the "Series Notice") which sets
forth specific provisions regarding the Trust and details the provisions of the
Notes. See "FORMATION OF THE TRUST" and "DESCRIPTION OF THE OFFERED NOTES."
Security Trust Deed: Pursuant to the Security Trust Deed, the Issuer Trustee
will grant a first ranking floating charge over the Trust Assets to the Security
Trustee, in order to secure the Issuer Trustee's obligations to the Offered
Noteholders, the Note Trustee, the Trust Manager, the Swap Providers (as defined
herein), the Security Trustee, each Paying Agent, each provider of a Support Facility
(other than the provider of a Mortgage Insurance Policy), to the Approved Sellers
in respect of any Accrued Interest Adjustment, to Westpac in respect of
Redraws, to the holders of the RFSs (if any) and the holders of the RFS Class A
Notes (if any) (such creditors, together the "Mortgagees"). A "Support Facility" is
any of the Liquidity Facility, the Redraw Facility, the Swap Agreements (as defined
herein) or any of the Mortgage Insurance Policies. See "SECURITY FOR THE NOTES."
The Issuer Trustee will grant a "floating charge" over the Trust Assets to the
Security Trustee in order to secure the Issuer Trustee's obligations in respect of
the Notes and the Transaction Documents. A "charge" is a proprietary interest created
over property. A floating charge is a grant of a proprietary interest which
"floats" over a group of assets which assets may change or be dealt with from
time to time. A floating charge allows the person or entity granting the charge (the
"chargor") to deal with the assets and to give third parties title to those assets
free from any encumbrance, provided such dealings and transfers of title are in the
ordinary course of the chargor's business. For a description of a floating charge and
the crystallization of floating charges, see "SECURITY FOR THE NOTES--Nature of
Security", "--Charge" and "APPENDIX I--GLOSSARY OF AUSTRALIAN LEGAL TERMS."
Servicing Agreement: Under the Servicing Agreement, TMC is appointed as the initial
Servicer of the Housing Loans and custodian of the documents relating to the
Housing Loans and Mortgages. See "DESCRIPTION OF THE SERVICING AGREEMENT."
Note Trust Deed: The Note Trust Deed provides for the issuance and registration
of the Offered Notes. See "DESCRIPTION OF THE OFFERED NOTES."
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Swap Agreements: The rights of the Issuer Trustee under the
Swap Agreements will be subject to the security created by the Security Trust
Deed. The "Swap Agreements" are constituted by three 1991 ISDA Master
Agreements (each an "ISDA Master Agreement"), the schedules supplementing
such agreements and written swap confirmations confirming the Variable Rate
Basis Swap, two Fixed Rate Basis Swaps and the Currency Swaps. See "DESCRIPTION OF
THE SWAP AGREEMENTS."
Agency Agreement: Pursuant to the Agency Agreement, the
Issuer Trustee will appoint paying agents and an agent bank with respect to the
Offered Notes. The terms and conditions of these appointments are set forth in the
Agency Agreement.
Liquidity Facility Agreement: Under the Liquidity Facility
Agreement, the Liquidity Facility Provider agrees to make advances to the Issuer
Trustee for the purpose of providing liquidity to cover certain income
shortfalls in the Trust. See "THE LIQUIDITY FACILITY."
Redraw Facility Agreement: On or prior to the Closing Date, Westpac will enter into
a Redraw Facility Agreement (the "Redraw Facility Agreement") in its capacity as
Redraw Facility Provider with the Issuer Trustee. Pursuant to the terms of the
Redraw Facility Agreement, the Redraw Facility Provider shall be obligated,
subject to the limitations set forth herein, to fund the amount of any Redraws
not funded by Gross Principal Collections. See "DESCRIPTION OF THE OFFERED
NOTES--Redraw Facility."
The Master Trust Deed, the Series Notice, the Servicing
Agreement, the Security Trust Deed, the Note Trust Deed, the Swap Agreements, the
Agency Agreement, the Liquidity Facility Agreement and the Redraw Facility
Agreement are collectively referred to herein as the "Transaction Documents."
Clearance and Settlement............. Persons acquiring beneficial ownership interests in the Offered Notes
will hold their Offered Notes through any of DTC (in the United States)
or Cedel or Euroclear (in Europe). Transfers within DTC, Cedel or
Euroclear, as the case may be, will be in accordance with the usual rules
and operating procedures of the relevant system. Crossmarket transfers
between persons holding directly or indirectly through DTC, on the one
hand, and counterparties holding directly or indirectly through Cedel or
Euroclear, on the other, will be effected in DTC through the Relevant
Depositaries (as defined herein) of Cedel or Euroclear. See "DESCRIPTION
OF THE OFFERED NOTES--Book-Entry Registration."
Clean-up Offer....................... If at any time the aggregate Housing Loan Principal, expressed as a
percentage of the aggregate Housing Loan Principal as of the Cut-Off
Date, is less than 10%, then, if instructed by the Trust Manager, the
Seller Trustee, as trustee of certain other trusts under the Master Trust
Deed, may repurchase, on the following Payment Date, the equitable title
to the Housing Loans held by the Trust for an amount equal to the Unpaid
Balance (in the case of performing Housing Loans) or the Fair Market
Value (in the case of non-performing Housing Loans) (the "Clean-up
Offer"). The proceeds of sale will be applied by the Issuer Trustee to
repay moneys owing to Noteholders at that time in accordance with the
priorities for applying payments of Interest and principal between the
Classes of Notes. With respect to any Housing Loan and date, "Housing
Loan Principal" shall be the unpaid principal amount of that Housing Loan
on such date. "Unpaid Balance" of a Housing Loan, means the sum of (a)
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the unpaid principal amount of that Housing Loan; and (b) the unpaid
amount of all finance charges, interest payments and other amounts
accrued on or payable under or in connection with that Housing Loan or
the related Mortgage or other rights relating to the Housing Loan. The
"Fair Market Value" with respect to any non-performing Housing Loans is
the fair market value of such Housing Loan agreed on by the Trust Manager
(based on appropriate expert advice) and the Approved Seller.
Redemption for Taxation or Other If the Trust Manager satisfies the Issuer Trustee and the Note Trustee
Reasons......................... immediately prior to giving the notice referred to below that either
(i) on the next Payment Date the Issuer Trustee would be required to deduct or
withhold from any payment of principal or interest in respect of any Offered Notes
any amount for or on account of any present or future taxes, duties,
assessments or governmental charges of whatever nature imposed, levied,
collected, withheld or assessed by the Commonwealth of Australia or any of its
political subdivisions or any of its authorities (a "Withholding Tax Event") or
(ii) the total amount payable in respect of interest in relation to any of the
Housing Loans for a Collection Period ceases to be receivable (whether or not
actually received) by the Issuer Trustee during such Collection Period by reason of
any present or future taxes, duties, assessments or governmental charges of
whatever nature imposed, levied, collected, withheld or assessed by the
Commonwealth of Australia or any of its political subdivisions or any of its
authorities, the Issuer Trustee must, when so directed by the Trust Manager (at any
time at the Trust Manager's option) (provided that the Issuer Trustee will be
in a position on such Payment Date to discharge (and will so certify to the
Issuer Trustee and the Note Trustee) all its liabilities in respect of such Class
and any amounts required under the Security Trust Deed to be paid in priority
to or pari passu with such Class) upon having given not more than 60 nor less
than 30 days' notice to the Noteholders of such Class, redeem all, but not some, of
such Class at their Invested Amount (or at the option of the holders of 75% of the
aggregate Invested Amount of such Class, at their Stated Amount), together with
accrued interest to the date of redemption on any subsequent Payment Date, provided
that the holders of 75% of the aggregate Invested Amount of such Class may elect,
and shall notify the Issuer Trustee and the Trust Manager, that they do not
require the Issuer Trustee to redeem such Class of Notes in the circumstances
described above. All amounts ranking prior to or pari passu with respect to a Class
of Notes must be redeemed concurrently with such Class. Thus the Class B Notes
may not be redeemed unless the Class A Notes are also redeemed. See "RISK
FACTORS--No Gross-Up; Tax Redemption."
Legal Investment Considerations...... The Offered Notes will not constitute "mortgage related securities" for purposes
of the Secondary Mortgage Market Enhancement Act of 1984 ("SMMEA"). No
representation is made as to whether the Offered Notes constitute legal investments
under any applicable statute, law, rule, regulation or order for any entity whose
investment activities are subject to investment laws and regulations or to
review by certain regulatory authorities. Prospective purchasers are urged to
consult with their counsel concerning the status of the Offered Notes as legal
investments for such purchasers. See "LEGAL INVESTMENT CONSIDERATIONS" herein.
Tax Status........................... In the opinion of Mayer, Brown & Platt, special tax counsel for the
Trust, the Offered Notes will be characterized as debt for U.S. federal
income tax purposes. Each Offered Noteholder, by acceptance of an Offered
Note, will agree to treat the Offered Notes as indebtedness. See "UNITED
STATES FEDERAL INCOME TAX CONSEQUENCES" herein.
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Payments of principal and Interest in respect of the Offered Notes will be made
subject to withholding tax (if any) applicable to the Offered Notes without
the Issuer Trustee being obliged to pay any additional amounts to the Offered
Noteholders in respect of such withholding tax. See "RISK FACTORS--No Gross-Up; Tax
Redemption."
ERISA Considerations................. Subject to the considerations discussed under "ERISA CONSIDERATIONS," the
Offered Notes are eligible for purchase by employee benefit plans.
Ratings of the Offered Notes......... It is a condition to the issuance of the Class A Notes that they be rated "AAA" by Standard
& Poor's Ratings Group, a division of The McGraw-Hill Companies ("Standard &
Poor's"), "Aaa" by Moody's Investors Service, Inc. ("Moody's") and "AAA" by
Fitch IBCA, Inc. ("Fitch"). Moody's, Fitch and Standard & Poor's are referred to
herein as the "Rating Agencies." It is a condition to the issuance of the Class B
Notes that they be rated "AA-" by Standard & Poor's and "AA-" by Fitch. The security
ratings of the Offered Notes should be evaluated independently from similar
ratings on other types of securities. 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 Rating Agencies. See "RATINGS OF THE NOTES" herein.
Governing Law........................ The Notes and the Transaction Documents (other than the Security Trust
Deed and certain of the Swap Agreements) are governed by, and shall be
construed in accordance with, the laws of New South Wales, Australia. The
Security Trust Deed is governed by, and shall be construed in accordance
with, the laws of the Australian Capital Territory.
The Issuer Trustee has, under the Note Trust Deed, submitted to the
non-exclusive jurisdiction of the courts of New South Wales for all
purposes in connection with the Offered Notes.
Risk Factors......................... In considering an investment in the Offered Notes, investors should
recognize that there are risks associated with such an investment. See
"Risk Factors" herein.
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STRUCTURAL CHART
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CASH FLOW SUMMARY
The following is a brief summary of the allocation of cashflows in
relation to the Trust. This Cash Flow Summary is qualified in its entirety by
reference to the detailed information appearing elsewhere in this
Prospectus--see "DESCRIPTION OF THE OFFERED NOTES" for a full description of
cashflow allocation. Terms defined below are defined in more detail
elsewhere--the definitions below are for convenience only.
Collections
Amounts collected by or on behalf of the Issuer Trustee in respect of the
Trust are calculated for each Collection Period and include, for the relevant
Collection Period:
1. scheduled payments (of interest, principal and fees) and prepayments of
principal under the Housing Loans;
2. proceeds from enforcement of Housing Loans and related Mortgages (see
"CERTAIN LEGAL ASPECTS OF THE HOUSING LOANS--Enforcement of Housing Loans");
3. amounts payable under Mortgage Insurance Policies with respect to losses
on Housing Loans and related Mortgages;
4. amounts received from an Approved Seller or the Servicer for breaches of
representations or undertakings; and
5. interest on amounts in the Collections Account.
These amounts are known as "Collections" which will be attributed between
income and principal. The Collections attributed to income, less certain
amounts, are "Available Income". The Collections attributed to principal, plus
any amounts remaining on deposit in the Collection Account on the previous
Payment Date (after all distributions from the Collection Account for such
Payment Date have been made), less certain amounts, are "Gross Principal
Collections".
The cashflow allocation methodology treats Available Income and Gross
Principal Collections in two separate "streams". Generally, the two streams are
treated separately. However, in some circumstances, principal will be treated as
income and applied in the income stream, and in other circumstances income will
be treated as principal and applied in the principal stream.
Gross Principal Collections
Gross Principal Collections are applied first to repay Westpac for any
Redraws funded by Westpac in the relevant Collection Period. The balance of
Gross Principal Collections remaining after such repayment of Westpac is known
as "Principal Collections." Those Principal Collections are applied:
1. First, to repay Westpac for any Redraws funded by Westpac to the extent
not previously reimbursed (i.e., not restricted to Redraws funded during the
relevant Collection Period);
2. Second, to repay amounts outstanding under the Redraw Facility
Agreement;
3. Third, to be treated as income to the extent necessary if there is
insufficient income for the Collection Period to make required income payments
(this application of principal as income is a "Principal Draw");
4. Fourth, to pay principal outstanding under the RFSs until repaid in
full;
5. Fifth, to pay principal outstanding under the Class A Notes and the RFS
Class A Notes.
Payments of principal may be applied either sequentially or serially
with respect to Class B Notes, depending on whether certain threshold tests
have been satisfied.
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Initially all Principal Collections distributed to Noteholders will be
applied "sequentially," meaning that such Principal Collections will be applied
to the RFSs (if any), Class A Notes and RFS Class A Notes (if any), pro rata,
until such classes are paid in full. The Class B Notes are then entitled to
Principal Collections.
If certain distribution tests have been met, Principal Collections will be
applied "serially," entitling the Class A Notes and the Class B Notes to share
in Principal Collections. There are two serial distribution tests which focus on
whether the subordination provided by the Class B Notes to the Class A Notes
effectively doubles from the initial level of subordination at the start of the
transaction, whether the distribution of Principal Collections is occurring
prior to a certain date and whether certain credit tests focusing on
delinquencies and losses on the Housing Loans have been met. For a complete
description of the serial distribution tests, see the definitions of "Serial
Method 1 Distribution Test" and "Serial Method 2 Distribution Test" set forth in
"DESCRIPTION OF THE OFFERED NOTES--Payments of Principal on the Notes."
6. Sixth, to pay principal outstanding under the Class B Notes under the
sequential or serial methods referred to above.
Principal Losses
It may be that principal losses are incurred in respect of a Housing Loan
during a Collection Period.
If (i) a Borrower defaults; (ii) the relevant Housing Loan and related
Mortgage are enforced; and (iii) the amount recovered (after payment of
enforcement expenses) will not satisfy the Unpaid Balance of the Housing Loan,
there will be a "Liquidation Loss". A Liquidation Loss will usually comprise
both interest and principal. To the extent that it relates to principal, a
Liquidation Loss is known as a "Principal Loss". If, following a Principal Loss,
the relevant Mortgage Insurance Policy does not cover that loss and the Issuer
Trustee does not have a right to recover any amounts from an Approved Seller or
the Servicer due to a breach of representation or undertaking, there will be a
loss on the underlying principal in the pool. Such a loss is a "Mortgage
Shortfall". The total amount of all Mortgage Shortfalls in a Collection Period
is known as the "Principal Charge Off" for that Collection Period.
Any Principal Charge Off for a Collection Period may be met by any excess
income which is available from the income stream for that purpose (as summarized
below). If the Principal Charge Off cannot be satisfied in full from that excess
income, the principal loss represented by the balance of the Principal Charge
Off which is not so satisfied must be "carried over" into succeeding periods.
This is a "Carryover Charge Off".
Each Carryover Charge Off must be represented by a reduction in the
principal amount of the Notes. Thus, the principal amount of the Notes (the
"Invested Amount") is reduced:
(a) First, in respect of Class B Notes; and
(b) Second, if the Class B Notes are reduced to zero, pro rata, in
respect of the Class A Notes, the RFSs, the RFS Class A Notes and the
Principal Outstanding under the Redraw Facility.
The "Stated Amount" of a Note is thus the Invested Amount of the Note less
the Carryover Charge Offs applied against it as set out above.
Excess income may be used to recover principal which has been reduced
following a Carryover Charge Off. The application of income for this purpose is
summarized below.
Income Collections
Available Income is applied in the following order of priority:
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(a) First, in respect of the first Collection Period, to the Approved
Seller for income received by the Issuer Trustee on the pool relating to
the period prior to the Closing Date. This is the "Accrued Interest
Adjustment";
(b) Second, to Trust Expenses which have not previously been paid;
(c) Third, to repay amounts outstanding under the Support Facilities
(other than the Currency Swaps and fees under the Liquidity Facility
Agreement);
(d) Fourth, to repay Liquidity Draws under the Liquidity Facility
Agreement;
(e) Fifth, pari passu and ratably, to interest on the Class A Notes,
the RFSs and the RFS Class A Notes and to fees under the Redraw Facility
Agreement; and
(f) Sixth, to interest on the Class B Notes.
These payments are "Total Payments".
Any Available Income in excess of Total Payments for a Collection Period is
"Excess Available Income", and is applied in the following order of priority:
(i) First, against Principal Charge Offs for the Collection Period;
(ii) Second, pari passu and ratably, against Carryover Charge Offs for
Class A Notes, RFSs, RFS Class A Notes and fees or amounts owing under the
Redraw Facility Agreement;
(iii) Third, against Carryover Charge Offs for Class B Notes; and
(iv) Fourth, to Principal Draws which have not previously been repaid.
Any amount remaining after application of these payments is an "Excess
Collections Distribution", and will be paid to Westpac as beneficiary of the
Trust.
Liquidity Support
If there are insufficient interest Collections to meet Total Payments for a
Collection Period, principal may be used to provide liquidity by way of a
"Principal Draw" (see above).
If Principal Draws are not available to meet Total Payments, a drawing must
be made under the Liquidity Facility Agreement up to its facility limit (being
A$_____________) to provide liquidity to allow Total Payments to be made.
Currency Swaps
All payments required to be made to Offered Noteholders will be made in
Australian dollars to the Currency Swap Providers, who will swap the amounts
into US dollars.
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CASH FLOW CHART
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RISK FACTORS
In addition to the matters described elsewhere in this Prospectus,
prospective investors should carefully consider the following factors before
deciding to invest in the Offered Notes.
Limited Liability under the Offered Notes
The Offered Notes are debt obligations of the Issuer Trustee in its
capacity as trustee of the Trust. They are issued with the benefit of, and
subject to the Master Trust Deed, the Series Notice, the Security Trust Deed and
the Note Trust Deed. The Issuer Trustee's liability in respect of the Offered
Notes is limited to the assets of the Trust available in accordance with the
terms of the Master Trust Deed, the Series Notice, the Note Trust Deed and the
Security Trust Deed to meet its obligations in relation to the Offered Notes
and, except in certain limited circumstances, the Issuer Trustee will not be
personally liable in respect of the Offered Notes. See "THE ISSUER
TRUSTEE--Limitation of Issuer Trustee's Liability."
In addition, the Offered Notes will not represent an interest in or
obligation of the Servicer, the Trust Manager, the Approved Sellers, the Note
Trustee, the Security Trustee or any of their respective affiliates (other than
the Issuer Trustee to the extent referred to above). The only obligations of the
foregoing entities with respect to the Offered Notes or any Housing Loan will be
the obligations of the Approved Sellers pursuant to certain limited
representations and warranties made with respect to the Housing Loans, of the
Servicer with respect to its servicing obligations under the Servicing Agreement
and the Trust Manager in respect of its undertakings in the Transaction
Documents. The Offered Notes will not be guaranteed or insured by any
governmental agency or instrumentality, or by the Issuer Trustee, the Servicer,
the Trust Manager, the Approved Sellers, the Note Trustee, the Security Trustee
or any of their respective affiliates. The Housing Loans are subject to certain
mortgage insurance policies, but only limited losses are covered. [Housing Loans
insured by HLIC prior to December 12, 1997 will have the benefit of a
Commonwealth Government Guarantee.] See "THE MORTGAGE INSURANCE POLICIES."
Proceeds of the assets included in the Trust (including the Housing Loans) will
be the sole source of payments on the Offered Notes, and there will be no
recourse to the Servicer, the Trust Manager, the Approved Sellers, the Note
Trustee, the Security Trustee or any other entity in the event that such
proceeds are insufficient or otherwise unavailable to make all payments provided
for under the Offered Notes.
Risk of Equitable Assignment of Housing Loans Rather than Legal Assignment
Although the Housing Loans and the related Mortgages could have been
legally assigned by the Seller Trustee to the Issuer Trustee, they will
initially only be equitably assigned until a Title Perfection Event (as defined
below) occurs. A "Title Perfection Event" in relation to the Housing Loans is
the occurrence of any of the following: (i) Westpac ceases to have a long term
credit rating of at least "BBB" from Standard & Poor's, "Baa2" from Moody's; and
"BBB" from Fitch; (ii) an Insolvency Event occurs with respect to Westpac; and
(iii) Westpac fails to transfer Collections within five Business Days after
receiving notice from the Issuer Trustee or the Trust Manager to do so. Until
such time, pursuant to the Transaction Documents, the Issuer Trustee is not
permitted to take any steps to perfect legal title and it cannot, and will not,
notify the Borrowers of the equitable assignment of the Housing Loans to the
Issuer Trustee. If a Title Perfection Event occurs, the Issuer Trustee, with the
assistance of the Servicer, is required take such steps as are necessary to
perfect the Issuer Trustee's legal title in the Housing Loans.
The delay in the notification to a Borrower of the assignment of the
Housing Loans to the Issuer Trustee may have the following consequences:
(1) until a Borrower has notice of the assignment, that Borrower is not
bound to make payments under the relevant Housing Loan to anyone other than
Westpac and can obtain a valid discharge from Westpac. However, the Servicer, a
delegate of Westpac, will act as the initial Servicer of the Housing Loans and
is obligated to deal with all moneys received from the Borrowers in accordance
with the Servicing Agreement and the Master Trust Deed;
(2) for so long as the Issuer Trustee holds only an equitable interest in
the Housing Loans, the Issuer Trustee's interest in them may become subject to
the interests of third parties created after the creation of the Issuer
Trustee's
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equitable interest but prior to it acquiring a legal interest in the Housing
Loans. However, the Servicer undertakes not to consent to the creation or
existence of any higher or equal ranking security interest over the Mortgaged
Property (the "Servicer's Security Undertaking"); and
(3) for so long as the Issuer Trustee holds only an equitable interest in
the Housing Loans, it must join Westpac as a party to any legal proceedings
against any Borrower in relation to the enforcement of any Housing Loan. In this
regard, Westpac undertakes in the Servicing Agreement to co-operate with the
Servicer in connection with the enforcement of any Housing Loans. Westpac has
granted an irrevocable power of attorney to the Issuer Trustee to perfect its
interest in the Housing Loans.
So long as the Issuer Trustee holds equitable title, rather than legal
title, to a Housing Loan, the Issuer Trustee's interest in such Housing Loan may
be impaired by the creation or existence of any higher or equal ranking security
interest over the related Mortgaged Property if the Servicer fails to adhere to
the Servicer's Security Undertaking. Such failure may result in losses to
Noteholders.
Risk of Losses and Delays from Enforcement of the Housing Loans
Substantial delays could be encountered in connection with the liquidation
of a Housing Loan and result in shortfalls in distributions to Noteholders to
the extent not covered by a Mortgage Insurance Policy or if the relevant
Mortgage Insurance Policy provider fails to perform its obligations. Further,
liquidation expenses such as legal fees, real estate taxes, and maintenance and
preservation expenses (to the extent not covered by a Mortgage Insurance Policy)
will reduce the net amounts recoverable by the Issuer Trustee from an enforced
Housing Loan and mortgage and will reduce Excess Available Income. In the event
any of the Mortgaged Properties fail to provide adequate security for the
related Housing Loans, Noteholders could experience a loss to the extent not
covered by a Mortgage Insurance Policy or if the relevant Mortgage Insurance
Policy provider fails to perform its obligations and the subordination of Excess
Available Income is not sufficient.
Mortgage Insurance Policies Are Subject to Exclusions and Limitations
The liability of each of the Mortgage Insurers under the Mortgage Pool
Insurance Policy and the PMI Policies, as applicable, is subject to certain
exclusions. Each of them also has the right to cancel the coverage of, or
terminate its Mortgage Insurance Policy in respect of, a Housing Loan in certain
circumstances. The exclusions and rights vary among the different Mortgage
Insurance Policies and may affect the ability of the Issuer Trustee to make
timely and full payments of principal and Interest on the Notes.
See "THE MORTGAGE INSURANCE POLICIES" for further details.
Risks Associated with High LVR Housing Loans
Approximately _____% of the Housing Loans by aggregate principal balance of
the related Housing Loans as of the Cut-Off Date, had an LVR in excess of 80%.
Housing Loans with higher LVRs may present a greater risk of delinquency.
Although each Housing Loan in the Trust with an LVR in excess of 80% is covered
by a PMI Policy which insures the full amount of the Unpaid Balance of the
related Housing Loan, if a Borrower fails to make payments under such a Housing
Loan and the applicable Mortgage Insurer cancels the relevant PMI Policy,
reduces the amount of a claim or fails to honor its obligation under the PMI
Policy, proceeds from a liquidation of such Housing Loan may be insufficient to
cover the Unpaid Balance thereof. As a result, Noteholders may experience losses
including Principal Charge Offs (as defined herein) with respect to the Offered
Notes. For a description of such coverage, see "THE MORTGAGE INSURANCE
POLICIES."
Risks Associated with Westpac's Ability to Set Rates on Variable Rate Housing
Loans at Its Discretion
The interest rates with respect to the Variable Rate Housing Loans are not
tied to an objective interest index but rather may be set at the sole discretion
of Westpac, as originator of the Housing Loans. See "WESTPAC RESIDENTIAL LOAN
PROGRAM--Housing Loan Features." In the event that Westpac increases interest
rates on the Variable Rate Housing Loans, Borrowers may be unable to meet their
Scheduled Payments and accordingly, may become delinquent
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or may default on their respective Housing Loans. In addition, if such increase
raises interest rates above market interest rates, Borrowers may refinance their
loans with another lender to obtain a lower interest rate, which in turn could
cause investors in the Offered Notes to experience higher rates of principal
prepayment on the Offered Notes than anticipated.
Ability to Change Housing Loan Features May Result in Changes to the Mortgage
Pool and Higher Rates of Principal Prepayment on the Offered Notes.
During the term of any Housing Loan, Westpac may from time to time or at
the request of the related Borrower change certain features of such Housing
Loan. A Borrower may request, among other changes, (a) additional funds with
respect to its Housing Loan (a "top up"), (b) a substitution or modification of
the security for the related Mortgage, (c) a switch to another type of Housing
Loan product, (d) a draw on principal repayments made in excess of scheduled
repayments (a "Redraw"), (e) an interest rate switch from variable to fixed or
vice versa, (f) reduced payments due to maternity or paternity leave, (g) a
repayment holiday if a prepayment of certain amounts has resulted in a buffer of
funds and (h) a switch from owner occupied to investment property status or vice
versa (which may result in a change in interest rates). For a more detailed
discussion of the various features available to Borrowers, see "WESTPAC
RESIDENTIAL LOAN PROGRAM-- Housing Loan Features."
In addition, Westpac may initiate certain changes to the Housing Loans.
Most frequently, Westpac will change the Mortgage Rate. The change to the
Mortgage Rate can be either product or individual loan specific. In addition,
subject to certain conditions, Westpac may begin to offer additional product
features with respect to the Housing Loans which are not set forth herein. See
"WESTPAC RESIDENTIAL LOAN PROGRAM-Housing Loan Features-Additional Features."
As a result of both Borrower and Westpac initiated changes, the
characteristics of the Housing Loans as of the Cut-Off Date may differ from the
characteristics of the Housing Loans at any other point in time. In addition,
certain types of modifications to a Housing Loan result in the removal of such
Housing Loan from the Mortgage Pool, which in turn could cause investors in the
Offered Notes to experience higher rates of principal prepayment on the Offered
Notes than anticipated. Similarly, if Westpac elects to change certain features
of the Housing Loans, Borrowers may elect to refinance their loan with another
lender to obtain more favorable features, which also could lead to higher
principal prepayment on the Offered Notes than expected.
See "PREPAYMENT AND YIELD CONSIDERATIONS."
Risks of Currency Exchange Controls
The Issuer Trustee will receive Australian dollar payments on the Housing
Loans in Australia and, under the Currency Swaps, is required to pay certain
collections to the Currency Swap Providers as required under the Series Notice.
It is possible that in the future Australia may impose exchange controls that
affect the availability of Australian dollar payments for making payments under
the Currency Swaps. The Offered Noteholders will bear the risk of the imposition
of foreign exchange controls by the Australian government that impact upon the
Issuer Trustee's ability to exchange the Collections for U.S. dollars. The
Issuer Trustee has no control over such risk, which will generally be affected
by economic and political events in Australia. If the Issuer Trustee does not
pay some or all of the amounts in Australian dollars which it is required by the
Transaction Documents to pay to the Currency Swap Providers under the Currency
Swaps, the Currency Swap Providers are only required to pay the U.S. dollar
equivalent of the amounts they actually receive. In such event, it is unlikely
that the Trust would have sufficient U.S. dollars to make the payments due on
the Offered Notes.
Risks Related to a Termination of the Swap Agreements
By entering into the Swap Agreements, the Issuer Trustee intends to
transfer to the Interest Rate Swap Provider and Currency Swap Providers, as
applicable, the risks set forth below that the Trust would otherwise have with
respect to payments on the Offered Notes and the Housing Loans.
(a) Currency Exchange Risk. Interest and principal on the Offered Notes is
payable in U.S. dollars and the Trust's primary source for funding its payments
on the Offered Notes is its collections on the Housing Loans, which will be in
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Australian dollars. If the Currency Swap Providers were to fail to perform under
the Currency Swaps or were to be discharged from such performance because of a
default thereunder by the Trust, the Issuer Trustee might have to exchange its
Australian dollars for U.S. dollars at an exchange rate that is less favorable
to the Trust than the original Swap Currency Exchange Rate (which is _________
Australian dollars for each U.S. dollar) and might therefore not have sufficient
U.S. dollars to make timely payments on the Offered Notes, even though the
delinquency and loss experience on the Housing Loans may be acceptable.
(b) Risks Specific to the Variable Rate Basis Swap. The basis risk between
the floating rate obligations of the Trust (including Interest payable on the
Notes) and the variable administered rates set by Westpac will be hedged by
means of the Variable Rate Basis Swap. Pursuant to the Variable Rate Basis Swap,
each quarter the Interest Rate Swap Provider will pay the Issuer Trustee the
three month Bank Bill Rate plus a fixed margin and receive from the Issuer
Trustee the weighted average variable housing rate. The margin is fixed for the
life of the swap and will be set with regard for the ongoing expenses of the
Trust.
If Westpac is downgraded below A-1+/A2/F-1+ by Standard & Poor's, Moody's
or Fitch, respectively, and fails to provide eligible collateral or arrange for
a suitable alternative swap provider, it will be an Additional Termination Event
under the terms of the ISDA Master Agreement. If the Variable Rate Basis Swap is
terminated, the Trust Manager is required to calculate each month the minimum
interest rate required to be set on the variable rate Housing Loans in order to
cover amounts payable by the Issuer Trustee (including anticipated Trust
Expenses and taxes) and amounts due to the Issuer Trustee, the Trust Manager,
the Servicer, the Liquidity Facility Provider, the Redraw Facility Provider and
the Noteholders (the "Threshold Rate"). In this situation, the Housing Loan
rates across Westpac's whole portfolio of loans of the same product type may be
set at above market interest rates on the variable housing loans to meet Trust
Expenses which could result in the affected Borrowers refinancing their loans
with another bank, which in turn could cause Offered Noteholders to experience
higher rates of principal repayment on the Offered Notes than anticipated. If
the Variable Rate Basis Swap is terminated, the Trust may be subject to
reinvestment risk to the extent that any payments and prepayments invested in
Authorized Investments do not earn a sufficient rate of interest to cover the
interest owing on the Notes.
(c) Risks Specific to the Fixed Rate Swaps. Two Fixed Rate Swaps will be
used to hedge the interest rate risk between the floating rate obligations of
the Trust (including Interest payable on the Notes) and the discretionary fixed
rate set by Westpac on those Housing Loans being charged a fixed rate of
interest (a "Fixed Rate") (not including those loans with a Concessional Fixed
Rate). A Housing Loan is being charged a "Concessional Fixed Rate" when it has a
fixed rate of interest for the first 12 months, which converts to the standard
variable rate after that period. Loans subject to a Concessional Fixed Rate are
included under the Variable Rate Basis Swap. An amortizing Fixed Rate Swap will
be entered into on the Closing Date to hedge that portion of the pool earning a
Fixed Rate of interest as of the Cutoff Date. The Issuer Trustee will pay the
applicable daily weighted average fixed rate and receive the three month Bank
Bill Rate plus a fixed margin. The margin is fixed for the life of the swap and
has been set based on the actual margin on the underlying Fixed Rate Housing
Loans and the prevailing market rate existing on or about the Closing Date. A
further Fixed Rate Basis Swap will be entered into to hedge the interest rate
risk occurring when the Borrowers switch from a variable rate of interest to a
fixed rate of interest. Under that second Fixed Rate Basis Swap, the Issuer
Trustee will pay the applicable daily weighted average fixed rate and receive
the three month Bank Bill Rate plus a fixed margin. The margin is fixed for the
life of the swap.
If Westpac is downgraded below A-1+/A2/F-1+ by Standard & Poor's, Moody's
or Fitch, respectively, and fails to provide eligible collateral or arrange for
a suitable alternative swap provider, it will be an Additional Termination Event
under the terms of the ISDA Master Agreement only at the discretion of the
Issuer Trustee, who shall make such decision at the direction of the Trust
Manager. If the swap remains in place, the Rating Agencies may consider
downgrading the Offered Notes and an investor may then be holding Offered Notes
which have been downgraded. If the swap is terminated, the investor is exposed
to the risk of the possible narrowing of the spread between the customer rate
applicable on the Housing Loans and the floating rate obligations of the Trust
(including the Interest on the Notes). If the relevant Fixed Rate Basis Swap is
terminated, the Trust will be subject to the risk that the floating rate
obligations of the Trust may change in such a way that the discretionary fixed
rate set by Westpac on those Housing Loans being charged a fixed rate of
interest will be insufficient to make payments on such floating rate
obligations.
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Delinquency and Default Risk
If Borrowers fail to make Scheduled Payments under Housing Loans when due
there is a possibility that the Issuer Trustee may have insufficient funds to
make full payments of Interest and principal due to the Noteholders.
The Issuer Trustee's obligation to pay principal in respect of the Offered
Notes in full is limited by reference to, among other things, receipts by the
Issuer Trustee of amounts due under or in respect of the outstanding Housing
Loans. Noteholders must rely for payment of principal and Interest under the
Offered Notes on Borrowers making payments under the Housing Loans and on
amounts being available under the Mortgage Insurance Policies and any amounts
payable by an Approved Seller or the Servicer in respect of any breach of a
representation and warranty or undertaking respectively and, in addition, in the
case of Interest, on receipts of principal and required payments under the
Liquidity Facility. Furthermore, the Issuer Trustee is not required to make any
advances to cover shortfalls. See "DESCRIPTION OF THE OFFERED NOTES" and "THE
LIQUIDITY FACILITY."
A wide variety of factors of a legal, economic, political or other nature
could affect the performance of Borrowers in making payments of principal and
interest under the Housing Loans. In particular, if interest rates increase
significantly, Borrowers may experience distress and increased default rates on
the Housing Loans may result. Under the Consumer Credit Legislation (as defined
herein), among other remedies, a court may order a Housing Loan to be varied on
the grounds of hardship. See "CERTAIN LEGAL ASPECTS OF THE HOUSING LOANS." Any
such variance may reduce the principal or interest payable under a particular
Housing Loan.
If a Borrower defaults on payments under a Housing Loan and the Servicer
enforces the Housing Loan and takes possession of the relevant Mortgaged
Property, many factors may affect the price for which the Mortgaged Property is
sold and the length of time required to realize the proceeds of sale. Any delay,
and any loss incurred as a result of the realized proceeds of the sale of a
Mortgaged Property being less than the amount due under the Housing Loan may
affect the ability of the Issuer Trustee to make payments, or the timing of
those payments, in respect of the Offered Notes, notwithstanding any amounts
that may be claimed under a Mortgage Insurance Policy or otherwise allocated
from Principal Collections or drawn under the Liquidity Facility.
Risk of Early Defaults
Although little data is available and no empirical verification has been
made by the Trust Manager, the Underwriters or the Issuer Trustee, defaults on
mortgage loans, including mortgage loans similar to the Housing Loans, are
generally expected to occur with greater frequency in the early years of the
terms of mortgage loans.
Principal Prepayment and Yield Considerations
The yield to maturity experienced by a Offered Noteholder may be affected
by the rate of payment of principal of the Housing Loans. The Trust may receive
early payments of principal on the Housing Loans and, therefore, pay Principal
Collections to the Noteholders earlier than would otherwise have been the case.
For example, early payments of principal may occur in the following situations:
(1) receipt by the Issuer Trustee of enforcement proceeds due to a Borrower
having defaulted on its Housing Loan;
(2) receipt by the Issuer Trustee of insurance proceeds in relation to a
claim under a Mortgage Insurance Policy in respect of a Housing Loan;
(3) repurchase by Westpac of Housing Loans as a result of a breach by it of
certain representations (see "THE TRUST FUND--Representations and Warranties"
and "--Breach of Representations and Warranties");
(4) receipt by the Trust of any net amount attributable to principal from
another WST trust established under the Master Trust Deed with respect to the
substitution of a Housing Loan;
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(5) repurchase of the Housing Loans as a result of a Clean-Up Offer or a
redemption for taxation or other reasons (see "DESCRIPTION OF THE OFFERED
NOTES--Clean-Up Offer" and "--Redemption of the Offered Notes for Taxation or
Other Reasons");
(6) receipt of proceeds of enforcement of the Security Trust Deed prior to
the Maturity Date of the Notes (see "DESCRIPTION OF THE OFFERED
NOTES--Redemption of the Notes"); or
(7) receipt of proceeds of the sale of Housing Loans if the Trust is
terminated while Offered Notes are outstanding (for example, if required by law)
and the Housing Loans are then either (a) repurchased by Westpac under its right
of first refusal or (b) sold to a third party.
Additionally, in certain limited circumstances (for example, if the
principal amount of a Housing Loan is increased other than as a result of a
Redraw (see "DESCRIPTION OF THE OFFERED NOTES--Description of the Redraw
Facility, the Redraw Funding Securities and the Class A RFS Notes")), the Issuer
Trustee may transfer Housing Loans which comprise assets of the Trust to another
WST trust established under the Master Trust Deed. The consideration for that
transfer, to the extent it constitutes principal, will form part of Gross
Principal Collections (as defined herein) during the related Collection Period
and will be distributed as if it were a prepayment of principal by the relevant
Borrower.
Also, the Trust's principal payment experience may be affected by a wide
variety of factors, including general economic conditions, interest rates, the
availability of alternative financing and homeowner mobility. Furthermore,
unlike the United States, under Australian law, interest on loans used to
purchase a person's primary place of residence is not ordinarily deductible for
taxation purposes. Conversely, interest payments on mortgage loans and other
non-capital expenditures relating to investment properties that generate taxable
income are generally allowable as tax deductions. This is one contributing
factor to borrowers prepaying housing loans relating to owner-occupied
properties in Australia in a manner that differs from the United States. See
"CERTAIN LEGAL ASPECTS OF THE HOUSING LOANS--Treatment of Interest Payments with
respect to Australian Housing Loans".
See "PREPAYMENT AND YIELD CONSIDERATIONS."
No Gross-Up; Tax Redemption
In the event that any withholding tax is imposed on payments of interest on
any of the Offered Notes, the holders of the Offered Notes will not be entitled
to receive grossed-up amounts to compensate for such withholding tax.
Consequently, there can be no assurance that the remaining payments on the
Housing Loans would be sufficient to make timely payments of Interest on and
payment of principal at the maturity date of the Offered Notes. In addition,
upon the occurrence of a Withholding Tax Event, the Issuer Trustee (at the
direction of the Trust Manager) may on any Payment Date simultaneously redeem in
whole but not in part, at the redemption prices specified herein, the affected
Class of Offered Notes in accordance with the procedures described under
"DESCRIPTION OF THE OFFERED NOTES--Redemption of the Offered Notes for Taxation
or Other Reasons" herein. Holders of 75% of the Invested Amount of a Class may
also elect not to redeem the affected Class of Offered Notes in the event of a
Withholding Tax Event.
Reinvestment Risk
The Interest Rate Swap Agreements transfer the reinvestment risk detailed
below to the applicable Swap Provider. In the event that the Variable Rate Basis
Swap is terminated, the reinvestment risk will transfer back to the Issuer
Trustee. If a prepayment is received on a Housing Loan during any Collection
Period, interest at the then current interest rate on the Housing Loan will
cease to accrue on that part of the Housing Loan prepaid from the date of the
prepayment. The amount prepaid will be invested in Authorized Investments for
the balance of the Collection Period at a rate that may be less than the then
rate on the Housing Loan. Interest will, however, continue to be payable in
respect of an Invested Amount of principal on the Offered Notes until the next
Payment Date following the prepayment. Accordingly, the difference between the
rate earned on the prepaid amount of the Housing Loan and the amount of interest
payable on the Offered Notes may affect the ability of the Issuer Trustee to pay
interest in full on the Offered Notes. Certain
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Principal Collections and the Liquidity Facility may cover such shortfalls in
whole or in part but there is no assurance that sufficient amounts will be
available. For further details see "DESCRIPTION OF THE OFFERED NOTES--Available
Income" and "--Principal Draws."
Servicer Risk
The appointment of the Servicer under the Master Trust Deed and Servicing
Agreement may be terminated under certain circumstances or the Servicer may
resign (see "DESCRIPTION OF THE SERVICING AGREEMENT"). If the Servicer is
removed for any reason, the Issuer Trustee is obligated to appoint a suitably
qualified person as Servicer whose appointment would not materially prejudice
the interests of Noteholders (an "Eligible Servicer") to assume responsibility
for servicing the Housing Loans in accordance with the Master Trust Deed and the
Servicing Agreement. There is no guarantee (a) that an Eligible Servicer will be
found who would be willing to service the Housing Loans on the terms of the
Master Trust Deed and the Servicing Agreement, in which case the Issuer Trustee
must act as the Eligible Servicer or (b) that an Eligible Servicer will be able
to service the Housing Loans with the same level of skill and competence as the
initial Servicer. The ability of the Eligible Servicer (whether it is the Issuer
Trustee or a third party) to perform the servicing functions under the Master
Trust Deed and Servicing Agreement would depend on the information and records
available to it.
Subordination of the Class B Notes
The rights of the holders of the Class B Notes to receive payments of
Interest on each Payment Date will be subordinated to such rights of the holders
of the RFSs (if any), Class A Notes, RFS Class A Notes (if any) and the Redraw
Facility Provider to the extent set forth herein. In addition, the rights of the
holders of the Class B Notes to receive distributions of principal on each
Payment Date generally will be subordinated to such rights of the holders of the
RFSs (if any) and the Redraw Facility Provider with respect to repayments
pursuant to Redraw Facility Agreement and to holders of the Class A Notes and
RFS Class A Notes (if any). Furthermore, any Principal Charge Offs will be
applied first in reduction of the principal balance of the Class B Notes.
In the event that the Note Trustee is required by the Transaction Documents
or the Offered Notes to have regard to the interests of the Class A Noteholders
and the Class B Noteholders and where, in the opinion of the Note Trustee, there
is a conflict between the interests of the Class A Noteholders and the interests
of the Class B Noteholders, the Note Trustee shall have regard only to the
interests of the Class A Noteholders despite anything to the contrary in the
Transaction Documents.
Priority of RFSs and RFS Class A Notes Owned by Australian Resident Investors
In certain limited circumstances, the Issuer Trustee will issue RFSs and
RFS Class A Notes, which will be issued to Australian resident investors only.
The RFSs will be senior to the Class A Notes with respect to payments of
principal and which will rank pari passu with the Class A Notes with respect to
Interest. In addition, on each Payment Date, Gross Principal Collections will be
used to reimburse Westpac for any Redraws funded by Westpac during the related
Collection Period prior to payments being made on the Class A Notes.
Additionally, if RFSs are not repaid on the fifth Collection Determination Date
following the date such RFSs were issued, such RFSs will convert to RFS Class A
Notes. The RFS Class A Notes will rank pari passu with the Class A Notes with
respect to payments of both principal and Interest. In addition, payments due on
the Redraw Facility, RFSs and RFS Class A Notes, if any, will be senior in right
of payment to the Class B Notes with respect to principal, Interest and fees. If
proceeds from the liquidation of the assets included in the Trust following the
enforcement of the Security Trust Deed are not sufficient to pay all obligations
of the Issuer Trustee in its capacity as trustee of the Trust, Noteholders with
a lower priority of payment are at a greater risk for losses on their
investment. See "DESCRIPTION OF THE OFFERED NOTES--Description of the Redraw
Facility, the Redraw Funding Securities and the RFS Class A Notes."
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Credit Enhancement Provides Only Limited Protection Against Losses
Credit enhancement with respect to the Class A Notes will be provided by
(i) the Mortgage Insurance Policies, (ii) subordination of the Excess Available
Income and (iii) the subordination of payments on the Class B Notes to payments
to the Class A Notes. Credit enhancement with respect to the Class B Notes will
be provided by (i) the Mortgage Insurance Policies and (ii) subordination of the
Excess Available Income. Although the credit enhancement is intended to reduce
the risk of delinquent payments or losses to the Noteholders entitled to the
benefit thereof, the amount of such enhancement is limited, will decline and
could be depleted under certain circumstances prior to the payment in full of
the Offered Notes. As a result, the available credit enhancement may be
insufficient to reduce the risk of delinquent payments and losses to the
Noteholders. See "THE MORTGAGE INSURANCE POLICIES" and "DESCRIPTION OF THE
NOTES."
Limitations on the Liquidity Support
If on any Collection Determination Date, the Available Income of the Trust
is insufficient to meet Total Payments of the Trust for a Collection Period,
Principal Collections collected during such Collection Period may be used to
provide liquidity by way of a Principal Draw. If Principal Draws are not
available to meet Total Payments, a drawing must be made under the Liquidity
Facility up to the Liquidity Limit (as defined herein). In the event that there
are shortfalls in excess of the Liquidity Limit prior to the payment in full of
the Offered Notes, Noteholders may suffer losses. In addition, the Liquidity
Facility does not provide any credit enhancement with respect to the Offered
Notes. See "DESCRIPTION OF THE OFFERED NOTES--Principal Draws" and "THE
LIQUIDITY FACILITY."
Exercise of Clean-up Offer May Result in Shortfalls to Noteholders
If at any time the aggregate Housing Loan Principal, expressed as a
percentage of the aggregate Housing Loan Principal as of the Cut-Off Date, is
less than 10%, then, if instructed by the Trust Manager, the Seller Trustee may
repurchase, on the following Payment Date, the equitable title to the Housing
Loans held by the Trust. The proceeds of sale will be applied by the Issuer
Trustee to repay moneys owing to Noteholders at that time in accordance with the
priorities for applying payments of Interest and principal between the Classes
of Notes. In the event that a Housing Loan is non-performing, the purchase price
for such Housing Loan will be based on the Fair Market Value. Fair Market Value
with respect to a Housing Loan may be less than the Unpaid Balance of such
Housing Loan. If a significant number of Housing Loans are non-performing, the
total proceeds from exercising the Clean-up Offer may be less than amounts owing
to Noteholders and Noteholders may suffer losses. See "DESCRIPTION OF THE
NOTES--Clean-up Offer."
Redemption of the Notes
If an Event of Default occurs under the Security Trust Deed while the
Offered Notes are outstanding, the Security Trustee may (subject to the prior
written consent of the Note Trustee in accordance with the provisions of the
Security Trust Deed), and will (if so directed by the Note Trustee alone where
it is the only Voting Mortgagee or, otherwise by a resolution of 75% of the
Voting Mortgagees) enforce the security created by the Security Trust Deed. That
enforcement can include the sale of some or all of the Housing Loans. There is
no guarantee that the Security Trustee will be able to sell the Housing Loans
for their then current Unpaid Balance. Accordingly, the Security Trustee may not
be able to realize the full value of the Housing Loans and this may have an
impact upon the Issuer Trustee's ability to repay all amounts outstanding in
relation to the Notes. Any proceeds from the enforcement of the security will be
applied in accordance with the order of priority of payments as set out in the
Security Trust Deed. See "SECURITY FOR THE NOTES."
If the Trust terminates while Notes are outstanding, Westpac has a right of
first refusal to acquire the Housing Loans. The price to be paid by Westpac for
performing and non-performing Housing Loans must be not less than their fair
market value. In the case of performing Housing Loans, the Issuer Trustee is
required to offer to sell them to Westpac under its right of first refusal for
their then Unpaid Balance. Where the fair market value of a Housing Loan is less
than its then Unpaid Balance, its acquisition by Westpac will be subject to
prior approval by holders of 75% of the votes of all Noteholders. This is
because in such circumstances there may be a shortfall in the amount available
to the Issuer
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Trustee to fully repay all amounts outstanding in relation to the Notes. See
"DESCRIPTION OF THE OFFERED NOTES--Termination of the Trust."
Geographic Concentration May Affect Performance
Approximately _____%, _____% and _____% (by Cut-Off Date Principal Balance)
of the Housing Loans are secured by Mortgaged Properties in the regions of
_________, __________ and __________, respectively. To the extent that one or
more of such regions has experienced or may experience in the future weaker
economic conditions or greater rates of decline in real estate values than
Australia generally, such a concentration of the Housing Loans may be expected
to increase the risk of delinquencies and losses on the Housing Loans with
respect to such region. None of the Issuer Trustee, the Approved Sellers nor the
Servicer can quantify the impact of any recent property value declines on the
Housing Loans or predict whether, to what extent or for how long such declines
may continue.
Consumer Credit Legislation
Some of the Housing Loans are regulated by consumer credit legislation (the
"Consumer Credit Legislation"). Under that legislation, a Borrower has the right
to apply to a court to:
(1) vary the terms of his or her Housing Loan on the grounds of
hardship or that it is an unjust contract;
(2) reduce or cancel any interest rate payable on the Housing Loan
which is unconscionable;
(3) have certain provisions of the Housing Loan or relevant Mortgage
which are in breach of the legislation declared unenforceable; or
(4) obtain restitution or compensation from either Westpac or, after a
Title Perfection Event, the Issuer Trustee, in relation to any breaches of
the Consumer Credit Legislation in relation to the Housing Loan or the
relevant Mortgage.
Any such order may affect the timing or amount of interest or principal
payments or repayments under the relevant Housing Loan (which might in turn
affect the timing or amount of Interest or principal payments or repayments
under the Offered Notes).
In addition, a mortgagee's ability to enforce a mortgage which is subject
to the Consumer Credit Legislation is limited by various demand and notice
procedures which are required to be followed. For example, as a general rule
enforcement cannot occur unless the relevant default is not remedied within 30
days after a default notice is given. Borrowers may also be entitled to initiate
negotiations with the mortgagee for a postponement of enforcement proceedings.
Such procedures and negotiations may also affect the timing or amount of
interest or principal payments or repayments under the Housing Loans.
Breaches of the Consumer Credit Legislation may also lead to civil
penalties or criminal fines being imposed on Westpac, for so long as it holds
legal title to the Housing Loans and the Mortgages. If the Issuer Trustee
acquires legal title, it will then become primarily responsible for compliance
with the Consumer Credit Legislation. The Issuer Trustee will (subject to
limited exceptions) be indemnified out of the assets of the Trust for its
liabilities under the Consumer Credit Legislation. If the Issuer Trustee is
indemnified with respect to such liabilities out of the assets of the Trust,
proceeds of the Trust may be insufficient to make all payments provided for
under the Offered Notes.
Westpac will give, or has given, certain representations and warranties
that the Housing Loans and related Mortgages comply in all material respects
with the Consumer Credit Legislation in force at the time documents were entered
into. The representations and warranties are set forth in "THE TRUST
FUND--Representations and Warranties." The Servicer has undertaken to comply
with the Consumer Credit Legislation in connection with servicing the Housing
Loans and related Mortgages where failure to do so would have an Adverse Effect.
An "Adverse Effect" is an event which will materially and adversely affect the
amount of any payment to be made to any Noteholder, or will materially
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and adversely affect the timing of such payment. In certain circumstances the
Issuer Trustee may have the right to claim damages from Westpac or the Servicer,
as the case may be, where the Issuer Trustee suffers a loss in connection with a
breach of the Consumer Credit Legislation which is caused by a breach of a
relevant representation or undertaking. See "CERTAIN LEGAL ASPECTS OF THE
HOUSING LOANS."
Risk of Commingling
Collections under the Housing Loans are received by Westpac or the
Servicer. As described in "DESCRIPTION OF THE OFFERED NOTES--Collections,"
provided that Westpac has a short term rating of at least "A-1+" from Standard &
Poor's, "P-1" from Moody's and "F-1+" from Fitch and the Collections Account is
maintained with Westpac or a subsidiary of Westpac, neither Westpac nor the
Servicer is required to pay the Collections into the Collections Account until
two (2) Business Days before the relevant Payment Date. If Westpac does not have
the relevant rating, Collections must be paid into the Collections Account
within five (5) Business Days (if the Collections Account is with Westpac or one
of its subsidiaries) or two (2) Business Days (in any other case) following
receipt. In each of these circumstances, the Collections may be commingled with
the assets of the Servicer or Westpac (as the case may be) and, in the event of
the insolvency of Westpac or the Servicer (as relevant), the Issuer Trustee may
only be able to claim those Collections as an unsecured creditor of the
insolvent company.
Limited Liquidity
There will be no market for the Offered Notes prior to the issuance
thereof, and there can be no assurance that a secondary market will develop, or
if it does develop, that it will provide the Offered Noteholders with liquidity
of investment or that it will remain for the term of any Offered Notes. The
Underwriters presently expect to make a secondary market in the Offered Notes,
but have no obligation to do so.
Ratings of the Notes; Factors Affecting Ability to Maintain Ratings
It is a condition to the issuance of the Class A Notes that they be rated
"Aaa" by Moody's, "AAA" by Standard & Poor's and "AAA" by Fitch and that the
Class B Notes be rated at least "AA-" by Standard & Poor's and "AA-" by Fitch. A
rating is not a recommendation to purchase, hold or sell the Offered Notes,
inasmuch as such rating does not comment as to market price or suitability for a
particular investor. The rating of the Offered Notes addresses the likelihood of
the payment of principal and interest on the Offered Notes pursuant to their
terms. There is no assurance that a rating will remain for any given period of
time or that a rating will not be lowered or withdrawn entirely by a Rating
Agency if in its judgment circumstances (including without limitation a
reduction in the credit rating of the Interest Rate Swap Provider, the Currency
Swap Providers, the Mortgage Insurance Providers or a reduction in the foreign
currency rating of Australia) in the future so warrant. The ratings of the
Offered Notes will be based primarily on the creditworthiness of the Housing
Loans, the subordination provided by the Class B Notes with respect to the Class
A Notes, the availability of Excess Available Income, if any, the Mortgage Pool
Insurance Policy and the PMI Policies, the availability of the Liquidity
Facility, the creditworthiness of the Interest Rate Swap Provider, the Currency
Swap Providers and the Mortgage Insurers and the foreign currency rating of
Australia. In the context of an asset securitization, the foreign currency
rating of a country reflects, in general, a Rating Agency's view of the
likelihood that cash flow on the assets in such country's currency will be
permitted to be sent outside of that country.
Book-Entry Notes
Issuance of the Offered Notes in book-entry form may reduce the liquidity
of such Notes in the secondary trading market since investors may be unwilling
to purchase Offered Notes for which they cannot obtain physical certificates.
Since transactions in the Offered Notes can be effected only through DTC, Cedel,
Euroclear, participating organizations, indirect participants and certain banks,
the ability of a Note Owner (as defined herein) to pledge an Offered Note to
persons or entities that do not participate in the DTC, Cedel or Euroclear
systems or otherwise to take actions in respect of such Offered Notes, may be
limited due to lack of a physical certificate representing the Offered Notes.
Note Owners may experience some delay in their receipt of distributions of
interest and principal on the Offered Notes since such distributions will be
forwarded by the Principal Paying Agent to DTC and DTC will credit such
distributions to the
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accounts of its Participants (as defined herein) which will thereafter credit
them to the accounts of Noteholders either directly or indirectly through
indirect participants. See "DESCRIPTION OF THE OFFERED NOTES--Book-Entry
Registration" herein.
Other Considerations
There is no assurance that the market value of the Housing Loans will at
any time be equal to or greater than the Invested Amount of the Notes then
outstanding, plus accrued interest thereon. Moreover, upon an Event of Default
under the Security Trust Deed and a sale of the Trust Assets, the Security
Trustee, the Note Trustee, the Liquidity Facility Provider, the Swap Providers
and any other service provider generally will be entitled to receive the
proceeds of any such sale to the extent of unpaid fees and expenses and other
amounts owing to such persons prior to distributions to holders of the Notes.
After such payment of fees and expenses, the remaining proceeds thereof may be
insufficient to pay in full the principal of and interest on the Notes.
FORMATION OF THE TRUST
Westpac Securitisation Trust Programme
The Westpac Securitisation Trust Programme was established pursuant to the
Master Trust Deed for the purpose of enabling Westpac Securities Administration
Limited, as trustee of each Trust established pursuant thereto, to invest in
pools of consumer assets originated from time to time by the Westpac Banking
Corporation group (the "Westpac Group"). The Master Trust Deed provides for the
creation of an unlimited number of WST trusts. Each WST trust will be a separate
and distinct trust fund and will be created subject to the Master Trust Deed and
a supplemental series notice establishing specific provisions of the relevant
WST trust and the instruments to be issued by that trust. The Trust Assets are
not available to meet the liabilities of any other WST trust formed under the
Master Trust Deed. Likewise, the assets of any other trust formed under the
Master Trust Deed are not available to meet the liabilities of the Series
1998-2G WST Trust. Multiple classes of notes may be issued by the Issuer Trustee
in relation to each WST trust that differ among themselves as to priority of
payments and ratings.
Series 1998-2G WST Trust
The detailed terms of the Trust will be as set out in the Series Notice and
the Master Trust Deed. The Master Trust Deed establishes the general framework
under which WST trusts may be established from time to time. It does not
actually establish any trusts. To establish the Trust, the Trust Manager and the
Issuer Trustee have executed a notice of creation of trust dated on or about
________ (the "Notice of Creation of Trust").
In order to supplement the general framework under the Master Trust Deed
with respect to the Trust, all relevant parties (including the Trust Manager,
the Issuer Trustee and each Approved Seller) will execute the Series Notice,
which (among other things) specifies the details of the Notes, establishes the
cashflow allocation, sets out various representations and undertakings of the
parties specific to the Housing Loans, which are additional to those in the
Master Trust Deed, and amends the Master Trust Deed to the extent necessary to
give effect to the specific aspects of the Trust and the issue of the Offered
Notes.
The Transaction Documents should therefore be read together when
determining the rights, powers and obligations of the Issuer Trustee, the Trust
Manager and the Approved Sellers in relation to the Trust. The Master Trust Deed
and a form of the Series Notice have been filed as exhibits to the Registration
Statement of which this Prospectus is a part. The summaries herein do not
purport to be complete and are subject to the provisions of such documents.
The issuance of the Offered Notes will fund the purchase by the Trust of a
pool of residential housing loans originated by Westpac, which will be specified
in a Sale Notice from each of Westpac in its capacity as originator of the
Housing Loans or Westpac Securities Administration Limited in its capacity as
trustee of any other WST trusts established under the Master Trust Deed (in that
capacity, the "Seller Trustee"). The Seller Trustee owes a fiduciary duty to
Westpac, the entity which is the beneficiary of each "warehouse" trust
established under the Master Trust Deed.
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In addition, the Trust may issue certain additional debt securities as
discussed herein under "DESCRIPTION OF THE OFFERED NOTES--Description of the
Redraw Facility, the Redraw Funding Securities and the RFS Class A Notes."
Trust Assets
The Trust Assets will include:
1. a pool of Housing Loans, including all monies at any time paid or
payable thereon or in respect thereof from and after the Cut-Off Date with
respect to payments of principal and after the Closing Date with respect to
payments of interest;
2. rights under certain insurance policies with respect to the Housing
Loans;
3. amounts on deposit in certain accounts established pursuant to the
Master Trust Deed, including the Collections Account and amounts invested
in Authorized Investments; and
4. the Issuer Trustee's rights under the Transaction Documents.
SECURITY FOR THE NOTES
Charge
Pursuant to the Security Trust Deed, dated on or about _________ among the
Issuer Trustee, the Trust Manager, the Note Trustee and the Security Trustee,
the Issuer Trustee will grant a first ranking floating charge, to be registered
with the Australian Securities Commission, over all of the Trust Assets in favor
of Perpetual Trustee Company Limited (ACN 000 001 007) (the "Security Trustee"),
a company within the Perpetual group with its holding company being Perpetual
Trustees Australia Limited (ACN 000 431 827), in order to secure the Issuer
Trustee's obligations to the Offered Noteholders, the Note Trustee, the Trust
Manager, the Interest Rate Swap Provider, the Currency Swap Providers, the
Security Trustee, each Paying Agent, each other provider of a Support Facility
(other than any provider of a Mortgage Insurance Policy), the Approved Sellers
in respect of any Accrued Interest Adjustment (as defined herein), to Westpac in
respect of Redraws, to the holders of the RFSs (if any) and the holders of the
RFS Class A Notes (if any) (such creditors, together the "Mortgagees").
Security Trustee
The Security Trustee is appointed to act as trustee on behalf of the
Mortgagees on the terms and conditions of the Security Trust Deed. It holds the
benefit of the charge over the Trust Assets in trust for each Mortgagee in
accordance with the terms and conditions of the Security Trust Deed.
Subject to the provisions of the Security Trust Deed, if there is a
conflict between the duties owed by the Security Trustee to any Mortgagees or
class of Mortgagees, the Security Trustee must give priority to the interests of
the holders of the RFSs (if any), the RFS Class A Notes (if any), the Class A
Noteholders and the Class B Noteholders (which in the case of the Class A
Noteholders and the Class B Noteholders shall be determined by the Note Trustee
acting on their behalf). Subject to the provisions of the Security Trust Deed
(other than the provision in the previous sentence), the Security Trustee must
give priority to the interests only of the Class A Noteholders, the holders of
the RFSs (if any) and the holders of the RFS Class A Notes (if any) if, in the
Security Trustee's opinion, there is a conflict between the interests of Class A
Noteholders, the holders of the RFSs (if any) and the holders of the RFS Class A
Notes (if any) and the interests of the Class B Noteholders or other Mortgagees.
Provided that the Security Trustee acts in good faith, it shall not incur any
liability to any Mortgagee for giving effect or seeking to give effect to the
preceding provisions of this paragraph.
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The Security Trustee has had no involvement in the preparation of any part
of this Prospectus, other than the particular reference to the Security Trustee
in this section and the disclosure of additional provisions of the Security
Trust Deed set forth herein. The Security Trustee makes no statement or
representation in this Prospectus, has not authorized or caused the issue of any
part of it and takes no responsibility for any part of it.
The Security Trustee does not guarantee the success of the Offered Notes
nor the payment of principal or Interest on the Offered Notes.
Nature of Security
If a company grants a fixed security over any of its assets, those assets
may not be dealt with by such company without the consent of the relevant
mortgagee. In this way, the security is said to "fix" over the specific assets.
Fixed securities are usually given over real property, marketable securities and
other assets which will not be dealt with by the company.
Unlike fixed securities, floating charges do not attach to specific assets
but instead "float" over a class of assets which may change from time to time,
allowing the person or entity granting the charge (the "chargor") to deal with
those assets and to give third parties title to those assets free from any
encumbrance in the event of sale, discharge or modification, provided such
dealings and transfers of title are in the ordinary course of a chargor's
business. The security created by the Security Trust Deed is a floating charge
over the Trust Assets. The Security Trust Deed provides that the Issuer Trustee
may not deal with the assets of the Trust subject to the floating charge, except
in the ordinary course of its business. It is common in Australia for special
purpose securitization vehicles to give floating charges rather than fixed
charges. If the Issuer Trustee disposes of any of the Trust Assets (including
any Housing Loan) in the ordinary course of its business, the acquirer of that
property will take them free of the floating charge.
The floating charge created by the Security Trust Deed may "crystallize"
and become a fixed charge over the relevant class of assets owned by the Issuer
Trustee at the time of crystallization. Crystallization will occur automatically
following the occurrence of specific events set out in the Security Trust Deed,
including, among other events, notice to the Issuer Trustee from the Security
Trustee following an event of default. See "CERTAIN LEGAL ASPECTS OF THE HOUSING
LOANS" and "APPENDIX I--GLOSSARY OF AUSTRALIAN LEGAL TERMS" herein.
Enforcement
The Security Trustee must promptly convene a meeting of the Voting
Mortgagees (as defined herein) after it receives notice, or has actual knowledge
of, an Event of Default (as defined herein). See "DESCRIPTION OF THE OFFERED
NOTES--Events of Default; Rights Upon Event of Default." The Security Trustee
may waive (such waiver, being subject to the prior written consent of the Note
Trustee in accordance with the provisions of the Security Trust Deed), an Event
of Default before it is required to convene a meeting of Mortgagees if that
Event of Default is not (in the opinion of the Security Trustee) materially
prejudicial to the Mortgagees' interests.
At the meeting, the Voting Mortgagees must vote by "Extraordinary
Resolution" (being a resolution passed at a duly convened meeting by a majority
consisting of not less than 75% of the votes capable of being cast by Voting
Mortgagees present in person or by proxy or by written resolution signed by all
of the Voting Mortgagees) on whether to direct the Security Trustee to:
(1) declare the charge to be enforceable;
(2) declare the Secured Moneys (as defined herein) (including amounts
outstanding under the Notes, plus accrued and unpaid interest) immediately
due and payable;
(3) crystallize the floating charge created under the Security Trust
Deed in relation to any or all of the Secured Property (for a description
of the crystallization process, see "--Nature of Security" above); and/or
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(4) appoint a receiver over the Trust's assets or itself exercise the
powers that a receiver would otherwise have under the Security Trust Deed.
"Secured Moneys" means all money which the Issuer Trustee (whether alone or
with another person) is or at any time may become actually or contingently
liable to pay to or for the account of any Mortgagee (whether alone or with
another person) for any reason whatever under or in connection with a
Transaction Document.
Every question submitted to a meeting shall be decided in the first
instance by a show of hands and in case of equality of votes the chairman shall
both on a show of hands and on a poll have a casting vote in addition to the
vote or votes (if any) to which he may be entitled as Voting Mortgagee or as a
Representative (as defined herein). On a show of hands, every person holding, or
being a Representative holding or representing other persons who hold, Secured
Moneys shall have one vote except that the Note Trustee shall represent each
Noteholder who has directed the Note Trustee to vote on its behalf under the
Note Trust Deed. On a poll, every person who is present shall have one vote for
US $10,000 (but not part thereof) of the Secured Moneys that he holds or in
which he is a Representative. A "Representative" is in the case of any
Noteholder, a person or body corporate appointed as a proxy for that Noteholder.
A resolution of all the Voting Mortgagees (including an Extraordinary
Resolution) may be passed, without any meeting or previous notice being
required, by an instrument or notes in writing which have been signed by all of
the Voting Mortgagees.
The Security Trustee cannot exercise the powers referred to above unless
directed by an Extraordinary Resolution in the manner outlined above. The
Security Trustee is not obligated to act unless it obtains an indemnity from the
Voting Mortgagees and funds have been deposited on behalf of the Security
Trustee to the extent to which it may become liable for the relevant enforcement
actions. For so long as the Note Trustee is the only Voting Mortgagee it may
direct the Security Trustee to do any act which the Security Trustee is required
to do, or may only do, at the direction of an Extraordinary Resolution of Voting
Mortgagees. Neither the Security Trustee nor the Trust Manager may call a
meeting of Voting Mortgagees while the Note Trustee is the only Voting
Mortgagee, unless the Note Trustee otherwise consents.
The Note Trustee will be the only Voting Mortgagee for so long as the
amounts outstanding under the Offered Notes are 75% or more of all Secured
Moneys.
No Mortgagee is entitled to enforce the charge under the Security Trust
Deed, or appoint a receiver or otherwise exercise any power conferred by any
applicable law on charges, other than in accordance with the Security Trust
Deed.
Priorities under the Security Trust Deed
The proceeds from the enforcement of the Security Trust Deed (which will
not include amounts required by law to be paid to the holder of any prior
ranking security interest, the proceeds of or amounts credited to the collateral
account under the Liquidity Facility and payable to the Liquidity Facility
Provider and the proceeds of cash collateral lodged with and payable to a
provider of a Swap Agreement or provider of another Support Facility to the
Issuer Trustee) are to be applied in the order of priority set forth below,
subject to any other priority which may be required by statute or law. Priority
of proceeds in enforcement over secured creditors includes certain federal
taxes, unpaid wages, long service leave, annual leave and similar employee
benefits and certain auditor's fees.
(1) first, to pay all costs, charges, expenses and disbursements
properly incurred in the exercise of any power by the Security Trustee, the
Note Trustee, a receiver or an attorney or other amounts (other than those
referred to in paragraph (4) below) payable to the Security Trustee or the
Note Trustee under the Security Trust Deed;
(2) second, to pay pari passu and rateably:
(i) any fees and other expenses (including Trust Expenses) due to the
Security Trustee, the Note Trustee or the Principal Paying Agent;
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(ii) any fees and unpaid expenses, due to the Issuer Trustee; and
(iii) the receiver's remuneration;
(3) third, to pay pari passu and rateably any unpaid Accrued Interest
Adjustment due to an Approved Seller;
(4) fourth, to pay pari passu and rateably:
(i) all Secured Moneys (as defined herein) owing to the providers of
each Support Facility (other than the Currency Swap Providers);
(ii) all Secured Moneys owing to the holders of RFSs (if any);
(iii) all Secured Moneys owing to the holders of RFS Class A Notes (if
any);
(iv) all Secured Moneys owing to the Class A Noteholders (as at the
date of payment);
(v) all Secured Moneys owed by the Issuer Trustee as trustee of the
Trust to a WST trust other than the Trust;
(vi) all Secured Moneys owing in relation to any Redraws made by
Westpac for which it has not been reimbursed under the Transaction
Documents; and
(vii) all Secured Moneys owing to the Currency Swap Providers under a
confirmation relating to the Class A Notes (but without double counting
with payments under sub-paragraph (iv));
(5) fifth, all Secured Moneys owing to the Class B Noteholders (as at
the date of payment) and to the Currency Swap Providers under a
confirmation relating to the Class B Notes, but without double counting;
(6) sixth, to pay pari passu and rateably any amounts not covered
above owing to any Mortgagee under any Transaction Document;
(7) seventh, to pay the holder of any subsequent security interest
over the assets charged by the Security Trust Deed of which the Security
Trustee has notice of the amount properly secured by the security interest;
and
(8) eighth, to pay any surplus to the Issuer Trustee to be distributed
in accordance with the Master Trust Deed.
The surplus will not carry interest. If the Security Trustee pays the
surplus to the credit of an account in the name of the Issuer Trustee with any
bank carrying on business in Australia, the Security Trustee, receiver,
Mortgagee or attorney (as the case may be) will be under no further liability in
respect of it.
The "Accrued Interest Adjustment" represents interest and fees which have
accrued on the relevant Housing Loans but which are unpaid as at (and excluding)
the Closing Date, and all amounts received by the relevant Approved Seller under
those Housing Loans applied by the Servicer to payment of interest and fees
under those Housing Loans for the period from (but excluding) the Cut-Off Date
to (but excluding) the Closing Date. During the period between the Cut-Off Date
and the Closing Date, the Housing Loans continue to be owned by the Approved
Sellers. However, any Collections with respect to the period from the Cut-Off
Date through the Closing Date will not be paid back to Westpac until after the
assignment of the Housing Loans to the Trust. The purchase price for the Housing
Loans excludes any such accrual. Therefore, an amount equal to that accrued
interest and fees and Collections in respect of interest and fees for the period
between the Cut-Off Date and the Closing Date will be paid to the Approved
Sellers on the first Payment Date as a priority payment from Total Available
Funds.
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Security Trustee's Fees and Expenses
The Issuer Trustee shall reimburse the Security Trustee for all costs and
expenses of the Security Trustee properly incurred in acting as Security
Trustee. The Security Trustee shall be entitled to a fee payable quarterly (the
"Security Trustee Fee") in the amount agreed from time to time by the Issuer
Trustee, the Security Trustee and the Trust Manager. The Issuer Trustee has
agreed to indemnify the Security Trustee against any loss, cost, charge,
liability, expense or damage under or in relation to the Transaction Documents,
except where arising from the Security Trustee's fraud, negligence or willful
default.
Retirement and Removal
Subject to the appointment of a successor Security Trustee, the Security
Trustee may retire on three months' notice in writing to the Issuer Trustee, the
Trust Manager, the Note Trustee and the Rating Agencies. The Security Trustee
may resign in favor of a successor Security Trustee only if the Rating Agencies
confirm that such resignation will not cause a withdrawal, downgrade or
qualification of the ratings of the Offered Notes.
Subject to the appointment of a successor Security Trustee and prior notice
being given to each of the Rating Agencies, an Extraordinary Resolution of the
Voting Mortgagees may at any time remove the Security Trustee.
Subject to the appointment of a successor Security Trustee and prior notice
being given to each of the Rating Agencies, the Trust Manager may remove the
Security Trustee if any of the following occurs in relation to the Security
Trustee: (i) an Insolvency Event occurs in relation to the Security Trustee in
its personal capacity; (ii) the cessation by the Security Trustee of its
business; (iii) the failure by the Security Trustee to remedy within 14 days
after written notice by the Trust Manager any material breach of duty on the
part of the Security Trustee; or (iv) if without the prior written consent of
the Trust Manager there occur certain changes in the control or management of
the Security Trustee.
Upon notice of resignation or removal of the Security Trustee, the Trust
Manager has the right to appoint a successor Security Trustee who has been
previously approved by an Extraordinary Resolution of the Voting Mortgagees and
who accepts the appointment. If no successor Security Trustee is appointed
within 30 days after notice, the retiring Security Trustee may on behalf of the
Mortgagees appoint a successor Security Trustee (other than Westpac or a related
corporation of Westpac) who accepts the appointment. There are currently several
third party security trustee organizations in Australia which may be available
to replace a resigning or removed security trustee.
Additional Provisions of the Security Trust Deed
The Security Trust Deed may be amended by the Issuer Trustee and the
Security Trustee with the written approval of the Trust Manager and the Note
Trustee in the manner (and subject to the restrictions) set out in the Security
Trust Deed.
The Security Trust Deed contains a range of provisions regulating the scope
of the Security Trustee's duties and liability. These include the following:
(1) The Security Trustee is not responsible for the adequacy or
enforceability of the Security Trust Deed or other Transaction Documents.
(2) The Security Trustee is not required to exercise its powers under
the Security Trust Deed without being directed to do so by the Note Trustee
or by an Extraordinary Resolution (as referred to above) of the Voting
Mortgagees.
(3) The Security Trustee may rely on documents provided by the Issuer
Trustee or Trust Manager and the advice of consultants and advisors.
46
<PAGE>
(4) The Security Trustee is not required to monitor whether an event
of default has occurred or compliance by the Issuer Trustee or Trust
Manager with the Transaction Documents or their other activities.
(5) The Security Trustee is not required to do anything unless its
liability is limited in a manner satisfactory to it.
(6) The Security Trustee need not give Mortgagees information
concerning the Issuer Trustee which comes into the possession of the
Security Trustee.
(7) The rights, remedies and discretion of the Noteholders including
all rights to vote or give instructions or consents to the Security Trustee
and to enforce its undertakings and warranties may only be exercised by the
Note Trustee on behalf of the Class A and Class B Noteholders and the
Security Trustee may rely on any instructions or directions given to it by
the Note Trustee as being given on behalf of the Noteholders without
inquiry about compliance with the Note Trust Deed.
(8) The Security Trustee has no duties or responsibilities except
those expressly set out in the Security Trust Deed or any collateral
security.
(9) Any action taken by the Security Trustee under the Security Trust
Deed or any collateral security binds all the Mortgagees.
(10) Each Mortgagee must make its own independent investigations,
without reliance on the Security Trustee, as to the affairs of the Issuer
Trustee and whether or not to take action under any Transaction Document.
(11) The Security Trustee in its capacity as a Mortgagee can exercise
its rights and powers as such as if it were not acting as the Security
Trustee. It and its affiliates may engage in any kind of business with the
Issuer Trustee, the Trust Manager, Mortgagees and others as if it were not
Security Trustee and may receive consideration for services in connection
with any Transaction Document or otherwise without having to account to the
Mortgagees.
THE TRUST FUND
General
The Housing Loans are expected to include ______ Housing Loans secured by
registered first ranking mortgages (collectively, the "Mortgages") on Mortgaged
Properties located in Australia. This subsection describes generally the
characteristics of the Housing Loans. The Mortgaged Properties consist of
owner-occupied properties and investment properties. The Mortgaged Properties do
not include mobile homes which are not permanently affixed to the ground,
commercial properties or unimproved land. With respect to each Housing Loan, the
"Cut-Off Date Balance Outstanding" is the unpaid principal balance of such
Housing Loan as of the close of business on the Cut-Off Date. Housing Loans
included in the Trust Fund consist of variable and fixed rate loans originated
by Westpac.
Transfer and Assignment of Housing Loans
On the Closing Date, the Housing Loans purchased by the Trust will be those
specified in a Sale Notice from each of the Approved Sellers to the Issuer
Trustee. The Housing Loans to be sold by either the Seller Trustee or Westpac
from Westpac's general portfolio of residential Housing Loans have been in both
cases originated by Westpac in the ordinary course of its business. Each Housing
Loan may have some or all of the product features set out in "WESTPAC
RESIDENTIAL LOAN PROGRAM--Housing Loan Features" below. Generally each Housing
Loan is secured by a registered first ranking mortgage over the related
Mortgaged Property or, if the Housing Loan is not secured by a first ranking
mortgage, the Approved Seller will assign the Issuer Trustee all prior ranking
Registered Mortgages in relation to that Housing Loan. For more information on
the Housing Loans, see "WESTPAC RESIDENTIAL LOAN PROGRAM" below.
47
<PAGE>
On the Closing Date, the Approved Sellers will equitably assign the Housing
Loans, the Mortgages and the Related Securities (as defined herein) securing
those Housing Loans to the Issuer Trustee, pursuant to the Sale Notices, after
which the Issuer Trustee will be entitled to receive (with the assistance of TMC
in its capacity as servicer (the "Servicer") of the Housing Loans and custodian
of Related Documents (as defined herein), including the mortgage documents
relating to the Housing Loans) Collections on the Housing Loans. If a Title
Perfection Event occurs, the Issuer Trustee must, with the assistance of the
Trust Manager and Westpac, take certain actions to perfect its legal title in
the Housing Loans pursuant to an irrevocable power of attorney granted by
Westpac.
"Related Security" in relation to a Housing Loan means: (a) any Relevant
Document for that Housing Loan, (b) any insurance policy or insurance proceeds
with respect to the Housing Loan, (c) any Mortgage Insurance Policy or Mortgage
Insurance Proceeds with respect to the Housing Loan, or (d) any other agreement
specified as "Related Security" for the Housing Loan in the Series Notice.
"Relevant Document" means, with respect to a Housing Loan, (a) the loan
agreement relating to that Housing Loan, (b) the mortgage document in relation
to such Housing Loan, (c) the certificate of title for the Mortgaged Property
secured by such mortgage, (d) any amendment or replacement of such documents and
any other document which is entered into by or executed in favor of the Approved
Seller or Issuer Trustee in connection with that Housing Loan after the Cut-Off
Date, or (e) any other document specified as a "Relevant Document" in the Series
Notice.
An Approved Seller may in some instances assign to the Issuer Trustee a
Housing Loan secured by an "all moneys" Mortgage, which may also secure
financial indebtedness that has not been sold into the Mortgage Pool and is
instead retained by Westpac. The Issuer Trustee will hold the benefit of the
relevant Mortgage as bare trustee in relation to that other financial
indebtedness, although the Mortgage will secure the assigned Housing Loan in
priority to that other financial indebtedness.
Representations and Warranties
Westpac will make certain representations and warranties to the Issuer
Trustee in relation to the Housing Loans to be assigned by it to the Issuer
Trustee. Westpac also made representations and warranties in relation to the
Housing Loans to be sold by the Seller Trustee at the time those Housing Loans
were first transferred by Westpac to each relevant Seller Trustee, and the
benefit of those prior representations and warranties will be passed on to the
Issuer Trustee. The Servicer will make certain representations and warranties to
the Issuer Trustee in relation to the servicing of the Housing Loans to be sold
by the Seller Trustee to the Issuer Trustee. These representations and
warranties cover the period from when those Housing Loans were first transferred
by Westpac to other Seller Trusts until the Cut-Off Date. The Seller Trustee
will make certain limited representations and warranties in relation to the
Housing Loans to be assigned by it (e.g., as to title) to the Issuer Trustee.
The Issuer Trustee has not investigated or made any inquiries regarding the
accuracy of these representations and warranties, and under the Master Trust
Deed is under no obligation to do so. The Issuer Trustee is entitled to rely
entirely upon the representations and warranties being correct (unless it has
actual notice of any event to the contrary). The rights of the Issuer Trustee in
the event that any representation or warranty is incorrect are described in
"--Breach of Representations and Warranties" below.
Westpac Representations
Westpac will make representations and warranties with respect to each
Housing Loan as of the date the Housing Loan is offered to the Issuer Trustee
(except as specified below) and the Closing Date, and in relation to paragraph
(3) below, as of the Cut-Off Date, including that:
(1) it is subject to a Mortgage Insurance Policy (in the case of the
Mortgage Pool Insurance Policy, at the Closing Date);
(2) it is the sole legal and beneficial owner of each Housing Loan,
free and clear of any security interest (unless arising solely as a result
of action by the Issuer Trustee);
48
<PAGE>
(3) in relation to the Housing Loans to be sold by Westpac to the
Issuer Trustee, each Housing Loan satisfies the following eligibility
criteria ("Eligibility Criteria"):
(i) it was approved and originated in the ordinary course of its
business;
(ii) the Mortgage securing each Housing Loan constitutes (a) a
registered first ranking mortgage over residential property, or (b) where
the Mortgage is not, or will not be when registered, a first ranking
mortgage, Westpac has made an offer to the Issuer Trustee in relation to
all prior ranking registered mortgages to sell such mortgages to the Issuer
Trustee;
(iii) it is denominated and payable only in Australian dollars in
Australia;
(iv) it has an LVR less than or equal to 95%;
(v) it has less than A$750,000.00 outstanding under it;
(vi) it is repayable within 30 years of the Cut-Off Date;
(vii) it is not Delinquent for more than 30 consecutive days;
(viii) it is subject to the terms and conditions of a Premium Option
Home Loan, a First Option Home Loan, a Fixed Options Home Loan, a Special
Offer Fixed Option Home Loan, a Fixed Rate Investment Property Loan, an
Investment Property Loan earning a variable rate of interest, a Special
Offer Fixed Rate Investment Property Loan or any other similar loan
product, however named, with some or all of the features referred to under
"WESTPAC RESIDENTIAL LOAN PROGRAM--Housing Loan Features";
(ix) it is secured by a Mortgage over a Mortgaged Property which has
erected on it a residential dwelling;
(x) the sale of an equitable interest in the Housing Loan, or the sale
of an equitable interest in any related Mortgage for the Housing Loan, does
not contravene or conflict with any law;
(xi) together with the related Mortgage, it has been or will be
stamped, or has been taken by the relevant stamp duties authority to be
stamped, with all applicable duty;
(xii) it is not governed or regulated by the Credit Act 1984 (NSW) (or
the corresponding legislation for any other Australian jurisdiction) or any
rural, primary production, moratorium or mediation legislation, other than
the Consumer Credit Legislation;
(xiii) it is not a loan with an interest only payment type and a
bullet principal repayment at the end of the interest only period as set
out in the letter of offer relating to that Housing Loan; and
(xiv) the Borrower is a resident of Australia; and
(4) at the time each Housing Loan and Mortgage which is specified in
the Sale Notice and each Related Security was entered into it complied in
all material respects with applicable laws, including, without limitation,
where the Consumer Credit Legislation applies, the Consumer Credit
Legislation.
Servicer Representations
In relation to the Housing Loans to be sold by the Seller Trustee to the
Issuer Trustee, the Servicer has made representations and warranties for the
benefit of the Issuer Trustee including that:
(1) as of the Cut-Off Date, each Housing Loan meets the Eligibility
Criteria;
49
<PAGE>
(2) as of the Closing Date, each Housing Loan is the subject of a
Mortgage Insurance Policy; and
(3) each Housing Loan originally sold to the Seller Trustee has been
serviced by the Servicer in accordance with the Servicing Agreement, in
some cases as the Servicing Agreement has been amended, until the Closing
Date. That servicing includes, without limitation, ensuring compliance with
the Consumer Credit Legislation in connection with servicing the Housing
Loans where failure to do so would have an Adverse Effect.
Seller Trustee Representations
In relation to the Housing Loans to be sold by the Seller Trustee to the
Issuer Trustee, the Seller Trustee will make representations and warranties for
the benefit of the Issuer Trustee including that:
(1) It has good equitable title to the Housing Loans free and clear of
any security interest other than under the security trust deed given by the
Seller Trustee in favor of the Security Trustee in respect of the warehouse
trust.
(2) The sale, transfer and assignment of the Seller Trustee's interest
in the Housing Loans will not constitute a breach of any documents binding
on the Seller Trustee.
Breach of Representations and Warranties
If Westpac, the Trust Manager or the Issuer Trustee becomes aware within
120 days after the Closing Date that a representation or warranty from Westpac
relating to any Housing Loan or Mortgage is incorrect, it must notify the other
parties and the Rating Agencies within five Business Days of becoming so aware.
If such a notice in relation to a breach is given not later than five Business
Days before 120 days after the Closing Date and the breach is not waived or
remedied to the satisfaction of the Issuer Trustee within five Business Days
then, without any action being required by either party, Westpac shall be
obligated to repurchase the affected Housing Loan and Mortgage for an amount
equal to its Unpaid Balance.
On payment of that amount the Issuer Trustee shall cease to have any
interest in the affected Housing Loan and Mortgage, and Westpac shall hold both
the legal and beneficial interest in such Housing Loan and Mortgage and be
entitled to all interest and fees that accrue in respect of them from (and
including) the date of repurchase.
In any other case, the Issuer Trustee's rights in relation to a breach of a
representation or warranty shall give rise only to a claim for damages, limited
to an amount equal to the Unpaid Balance of that Housing Loan at the time
Westpac pays the damages.
Housing Loan Statistics
The Housing Loans will consist of ______ Housing Loans secured by Mortgages
on Mortgaged Properties located in the six states and two territories in
Australia, New South Wales ("NSW"), Victoria ("Vic"), Queensland ("QLD"), South
Australia ("SA"), Western Australia ("WA"), Tasmania ("TAS"), Northern Territory
("NT") and the Australian Capital Territory ("ACT"). The aggregate Cut-Off Date
Balances Outstanding of the Housing Loans (the "Cut-Off Date Pool Balance")
totaled approximately A$__________. The Housing Loans bear interest at variable
and fixed rates. As of the Cut-Off Date, _____% of the Housing Loans by Cut-Off
Date Loan Balance are variable rate loans (the "Variable Rate Housing Loans")
and _____% of the Housing Loans by Cut-Off Date Loan Balance are fixed rate
loans (the "Fixed Rate Housing Loans"). The weighted average Mortgage Rate for
the Fixed Rate Housing Loans as of the Cut-Off Date was approximately _____% per
annum. The weighted average Mortgage Rate for the Variable Rate Housing Loans as
of the Cut-Off Date was approximately _____% per annum. The lowest Cut-Off Date
Balance Outstanding of any Housing Loan was approximately A$_______ and the
highest was approximately A$_______. The average Cut-Off Date Balance
Outstanding of the Housing Loans was approximately A$_______. The weighted
average original term to stated maturity of the Housing Loans was approximately
_______ months. The weighted average remaining term to stated maturity of the
Housing Loans was approximately _______ months. As of the Cut-Off Date, the
weighted average number of months that have elapsed since origination of the
Housing Loans was approximately ____ months. The lowest
50
<PAGE>
and highest LVR of the Housing Loans at Cut-Off Date were approximately ____%
and ____%, respectively. The weighted average LVR of the Housing Loans was
approximately _____%.
Housing Loans representing approximately _____% of the Cut-Off Date Pool
Balance are secured by Mortgaged Properties which are investment properties
(based solely upon statements made by the related Mortgagors at the time of
origination of the related Housing Loans).
As of the Cut-Off Date, no Housing Loans were more than 30 days Delinquent.
Set forth below is a description of certain additional characteristics with
respect to the Housing Loans held by the Trust and are not indicative of
Westpac's entire portfolio of housing loans. All percentages are approximate and
may not total 100% due to rounding.
51
<PAGE>
(All amounts expressed in Australian dollars)
(All %'s are approximate and may not total 100% due to rounding)
BALANCE OUTSTANDING DISTRIBUTION
<TABLE>
<CAPTION>
Number Total Current Weighted Weighted
of Security Balance Average Average % by % by
Balance Loans Value A$* Outstanding A$ Balance A$ LVR (%) Number Balance
- ------- ----- --------- -------------- ---------- ------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C>
A$10,001-A$20,000...........
A$20,001-A$30,000...........
A$30,001-A$40,000...........
A$40,001-A$50,000...........
A$50,001-A$100,000..........
A$100,001-A$150,000.........
A$150,001-A$200,000.........
A$200,001-A$250,000.........
A$250,001-A$300,000.........
A$300,001-A$350,000.........
A$350,001-A$400,000.........
A$400,001-A$450,000.........
A$450,001-A$500,000.........
Above A$500,000.............
-------- --------- --------- ---------- --------- --------- --------
Total................. 100% 100%
-------- --------- --------- ---------- --------- --------- --------
</TABLE>
- ---------------------------
* Total Security Value is the mortgage property value determined by
either contract of sale, valuation by a registered panel valuer or in
remote areas, a Manager's Assessment as reported on the system as of
the Cut-Off Date. See "WESTPAC RESIDENTIAL LOAN PROGRAM--Underwriting
of Housing Loans."
MORTGAGE RATES OF THE FIXED RATE HOUSING LOANS AS OF THE CUT-OFF DATE*
<TABLE>
<CAPTION>
Weighted
Number Current Balance Minimum Maximum Average % by % by
Current Rates of Loans Outstanding A$ Rate (%) Rate (%) Rate (%) Number Balance
- ------------- -------- -------------- -------- -------- -------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C>
5.501% less than= 6%...........
6.001% less than= 6.5%.........
6.501% less than= 7%...........
7.001% less than= 7.5%.........
7.501% less than= 8%...........
8.001% less than= 8.5%.........
8.501% less than= 9%...........
9.001% less than= 9.5%.........
9.501% less than= 10%..........
10.001% less than= 10.5%.......
-------- --------- --------- ---------- --------- --------- --------
Total.................... 100.00% 100.00%
-------- --------- --------- ---------- --------- --------- --------
-------- --------- --------- ---------- --------- --------- --------
</TABLE>
- ---------------------------
* Each Fixed Rate Housing Loan can convert to a Variable Rate Housing
Loan subject to certain related fees.
52
<PAGE>
GEOGRAPHIC DISTRIBUTION BY REGION*
<TABLE>
<CAPTION>
Total Current Weighted
Number Security Balance Average Average % by % by
Region of Loans Value A$ Outstanding A$ Balance A$ LVR (%) Number Balance
- ------ -------- -------- -------------- ---------- ------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C>
ACT-Metro.........
NSW-Metro.........
NSW-Other.........
NT-Metro..........
NT-Other..........
QLD-Metro.........
QLD-Other.........
SA-Metro..........
SA-Other..........
TAS-Metro.........
TAS-Other.........
Vic-Metro.........
Vic-Other.........
WA-Metro..........
WA-Other..........
- ------ -------- -------- -------------- ---------- ------- --------- ---------
Total....... 100.00% 100.00%
- ------ -------- -------- -------------- ---------- ------- --------- ---------
- ------ -------- -------- -------------- ---------- ------- --------- ---------
</TABLE>
- ---------------------------
* Geographic distributions are split by State or Territory and by
metropolitan (Metro) or country (Other). The distributions are based on
the post code of the Mortgaged Property. "Metro" areas comprise the
city and surrounding suburbs of the capital city of each State or
Territory and "Other" comprises all other areas within the State or
Territory.
LVR RATIO DISTRIBUTION
<TABLE>
<CAPTION>
Number Total Current Weighted
of Security Balance Average Average % by % by
LVR Loans Value A$ Outstanding A$ Balance A$ LVR (%) Number Balance
- --- ----- -------- -------------- ---------- ------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <S>
0% less than = 5%........
5% less than = 10%........
10% less than = 15%.......
15% less than = 20%.......
20% less than = 25%.......
25% less than = 30%.......
30% less than = 35%.......
35% less than = 40%.......
40% less than = 45%.......
45% less than = 50%.......
50% less than = 55%.......
55% less than = 60%.......
60% less than = 65%.......
65% less than = 70%.......
70% less than = 75%.......
75% less than = 80%.......
80% less than = 85%.......
85% less than = 90%.......
90% less than = 95%.......
-------
Total:.............. 100.00% 100.00%
------- -------
------- -------
</TABLE>
53
<PAGE>
MORTGAGE INSURER DISTRIBUTION
<TABLE>
<CAPTION>
Total Current Weighted
Number Security Balance Average Average % by % by
Insurer of Loans Value A$ Outstanding A$ Balance A$ LVR (%) Number Balance
- ------- -------- -------- -------------- ---------- ------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <S>
None...............
HLIC...............
MGI................
SUN/WLMI...........
Total........ 100.00% 100.00%
---------- --------- ------------- ---------- --------- -------- --------
---------- --------- ------------- ---------- --------- -------- --------
</TABLE>
HLIC INSURANCE DISTRIBUTION
<TABLE>
<CAPTION>
Total Current Weighted
Number Security Balance Average Average % by % by
Insurer of Loans Value A$ Outstanding A$ Balance A$ LVR (%) Number Balance
- ------- -------- -------- -------------- ---------- ------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C>
HLIC Govt
Guarantee - PMI....
HLIC Govt
Guarantee - Pool...
HLIC Ltd - PMI........
HLIC Ltd - Pool.......
---------- --------- ------------- ---------- --------- -------- --------
Total........... 100.00% 100.00%
---------- --------- ------------- ---------- --------- -------- --------
---------- --------- ------------- ---------- --------- -------- --------
</TABLE>
PRODUCT DISTRIBUTION
<TABLE>
<CAPTION>
Total Current Weighted
Number Security Balance Average Average % by % by
Product of Loans Value A$ Outstanding A$ Balance A$ LVR (%) Number Balance
- ------- -------- -------- -------------- ---------- ------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C>
First Option........
Fixed Options.......
IPL--First Option....
IPL--Fixed Rate......
IPL--Special Fixed
Rate.............
IPL--Variable Rate...
Premium Option......
Special Options
Fixed Rate.......
---------- --------- ------------- ---------- --------- -------- --------
Total......... 100.00% 100.00%
---------- --------- ------------- ---------- --------- -------- --------
---------- --------- ------------- ---------- --------- -------- --------
</TABLE>
54
<PAGE>
SETTLEMENT PERIOD DISTRIBUTION
<TABLE>
<CAPTION>
Total Current Weighted
Number Security Balance Average Average % by % by
Settlement Period of Loans Value A$ Outstanding A$ Balance A$ LVR (%) Number Balance
- ----------------- -------- -------- -------------- ---------- ------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C>
Prior 01/11/1996...
After 01/11/1996...
---------- --------- ------------- ---------- --------- -------- --------
Total........ 100.00% 100.00%
---------- --------- ------------- ---------- --------- -------- --------
---------- --------- ------------- ---------- --------- -------- --------
</TABLE>
55
<PAGE>
FIXED RATE HOUSING LOAN REPRICING DISTRIBUTION
<TABLE>
<CAPTION>
Month/Year
Conversion From Total Current Weighted
Fixed Rate Housing Loan to Number Security Balance Average Average % by % by
Variable Rate Housing Loan of Loans Value A$ Outstanding A$ Balance A$ LVR (%) Number Balance
- -------------------------- -------- -------- -------------- ---------- ------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C>
May-1998...................
Jun-1998...................
Jul-1998...................
Aug-1998...................
Sep-1998...................
Oct-1998...................
Nov-1998...................
Dec-1998...................
Jan-1999...................
Feb-1999...................
Mar-1999...................
Apr-1999...................
May-1999...................
Jun-1999...................
Jul-1999...................
Aug-1999...................
Sep-1999...................
Oct-1999...................
Nov-1999...................
Dec-1999...................
Jan-2000...................
Feb-2000...................
Mar-2000...................
Apr-2000...................
May-2000...................
Jun-2000...................
Jul-2000...................
Aug-2000...................
Sep-2000...................
Oct-2000...................
Nov-2000...................
Dec-2000...................
Jan-2001...................
Feb-2001...................
Mar-2001...................
Apr-2001...................
May-2001...................
Jun-2001...................
Jul-2001...................
Aug-2001...................
Sep-2001...................
Oct-2001...................
Nov-2001...................
Dec-2001...................
Jan-2002...................
Feb-2002...................
Mar-2002...................
Apr-2002...................
May-2002...................
Jun-2002...................
</TABLE>
56
<PAGE>
<TABLE>
<CAPTION>
Month/Year
Conversion From Total Current Weighted
Fixed Rate Housing Loan to Number Security Balance Average Average % by % by
Variable Rate Housing Loan of Loans Value A$ Outstanding A$ Balance A$ LVR (%) Number Balance
- -------------------------- -------- -------- -------------- ---------- ------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C>
Jul-2002...................
Aug-2002...................
Sep-2002...................
Oct-2002...................
Nov-2002...................
Dec-2002...................
Jan-2003...................
Feb-2003...................
Mar-2003...................
Apr-2003...................
May-2003...................
---------- --------- ------------- ---------- --------- -------- --------
Total................ 100.00% 100.00%
---------- --------- ------------- ---------- --------- -------- --------
</TABLE>
MORTGAGES BY YEAR OF MATURITY
<TABLE>
<CAPTION>
Total Current Weighted
Number Security Balance Average Average % by % by
Year of Maturity of Loans Value A$ Outstanding A$ Balance A$ LVR (%) Number Balance
- ---------------- -------- -------- -------------- ---------- ------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C>
2000...............
2001...............
2002...............
2003...............
2004...............
2005...............
2006...............
2007...............
2008...............
2009...............
2010...............
2011...............
2012...............
2013...............
2014...............
2015...............
2016...............
2017...............
2018...............
2019...............
2020...............
2021...............
2022...............
2023...............
2024...............
2025...............
2026...............
2027...............
2028...............
---------- --------- ------------- ---------- --------- -------- --------
Total........ 100.00% 100.00%
---------- --------- ------------- ---------- --------- -------- --------
---------- --------- ------------- ---------- --------- -------- --------
</TABLE>
57
<PAGE>
YEAR OF ORIGINATION (Quarterly)
<TABLE>
<CAPTION>
Total Current Weighted
Year of Number Security Balance Average Average % by % by
Origination of Loans Value A$ Outstanding A$ Balance A$ LVR (%) Number Balance
- ----------- -------- -------- -------------- ---------- ------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C>
1996 Q2
1996 Q3
1996 Q4
1997 Q1
1997 Q2
1997 Q3
1997 Q4
1998 Q1
---------- --------- ------------- ---------- --------- -------- --------
Total 100.00% 100.00%
---------- --------- ------------- ---------- --------- -------- --------
---------- --------- ------------- ---------- --------- -------- --------
</TABLE>
OCCUPANCY OF MORTGAGE PROPERTY DISTRIBUTION*
<TABLE>
<CAPTION>
Total Current Weighted
Number Security Balance Average Average % by % by
Loan Type of Loans Value A$ Outstanding A$ Balance A$ LVR (%) Number Balance
- --------- -------- -------- -------------- ---------- ------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C>
Investment.........
Owner Occupied.....
---------- --------- ------------- ---------- --------- -------- --------
Total........ 100.00% 100.00%
---------- --------- ------------- ---------- --------- -------- --------
---------- --------- ------------- ---------- --------- -------- --------
</TABLE>
- ---------------------------
* Based solely on statements of Borrowers at time of origination.
PAYMENT TYPE DISTRIBUTION
<TABLE>
<CAPTION>
Total Current Weighted
Number Security Balance Average Average % by % by
Payment Type of Loans Value A$ Outstanding A$ Balance A$ LVR (%) Number Balance
- ------------ -------- -------- -------------- ---------- ------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C>
Interest Only..............
Principal & Interest.......
---------- --------- ------------- ---------- --------- -------- --------
Total................ 100.00% 100.00%
---------- --------- ------------- ---------- --------- -------- --------
---------- --------- ------------- ---------- --------- -------- --------
</TABLE>
58
<PAGE>
HOUSING LOANS PROPERTY TYPES
<TABLE>
<CAPTION>
Total Current Weighted
Number Security Balance Average Average % by % by
Property Type of Loans Value A$ Outstanding A$ Balance A$ LVR (%) Number Balance
- ------------- -------- -------- -------------- ---------- ------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C>
Detached houses.............
Semi-detached houses........
Townhouses..................
Strata title units..........
---------- --------- ------------- ---------- --------- -------- --------
Total ................... 100.00% 100.00%
---------- --------- ------------- ---------- --------- -------- --------
---------- --------- ------------- ---------- --------- -------- --------
</TABLE>
59
<PAGE>
THE ISSUER TRUSTEE
Westpac Securities Administration Limited (the "Issuer Trustee") will act
as trustee under the Trust and, in such capacity, as issuer of the Notes on the
terms set out in the Transaction Documents.
Incorporation
The Issuer Trustee was incorporated on 11th July 1944 as, and continues to
exist and operate as, a limited liability public company under the Corporations
Law of New South Wales, Australia. The Australian Company Number ("ACN") of the
Issuer Trustee is 000 049 472, and its registered office is at Level 36, 50
Margaret Street, Sydney with its principal office at Level 10, 130 Pitt Street,
Sydney.
The Issuer Trustee will issue Notes in its capacity as trustee of the
Trust.
Share Capital
The authorized share capital of the Issuer Trustee is A$10,000,000 divided
into 5,000,000 shares of A$2.00 each. The issued share capital of the Issuer
Trustee is 92,000 fully paid shares of A$2.00 each. Those shares are held by
Westpac Financial Services Group Limited (ACN 000 326 312), a wholly owned
subsidiary of Westpac.
Business
The Issuer Trustee is indirectly a wholly owned subsidiary of Westpac and
is dedicated to supporting core bank activities of Westpac by providing trustee
and custody services. The Issuer Trustee currently holds funds under
administration of A$[6.4] billion in this capacity and has been servicing
Westpac and Westpac's clients since 1944.
The Issuer Trustee is an Authorized Trustee Corporation under the
Corporations Law; is an approved trustee for the purposes of the Superannuation
Industry (Supervision) Act 1993; and holds a Securities Dealers License No.
11123 under the Corporations Law of New South Wales, Australia.
The Issuer Trustee has five subsidiaries incorporated in New South Wales.
Experience
Currently, the Issuer Trustee is the trustee for superannuation trusts with
assets exceeding A$3.9 billion. In total the Issuer Trustee acts as trustee or
custodian (through its subsidiary company Westpac Custodian Nominees Limited)
for clients with assets exceeding A$97.4 billion.
The Issuer Trustee's experience in trusteeship began in the 1940's. The
Issuer Trustee is associated with leading investment managers and in addition,
the Issuer Trustee's experience with administrators, consultants and industry
specialists complements its capacity to service the diversified requirements of
corporate trust schemes.
The Issuer Trustee's balance sheet for the year ended September 30, 1997
showed Total Shareholder's Equity as A$40.7 million.
60
<PAGE>
Directors
The directors of the Issuer Trustee are as follows:
<TABLE>
<CAPTION>
Name Office Address Principal Activities
- ---- -------------- --------------------
<S> <C> <C>
Martyn John Berry Level 36, Westpac Plaza Investment Fund Executive
50 Margaret Street
Sydney NSW 2000, Australia
David Matthew Fite Level 36, Westpac Plaza Bank Executive
50 Margaret Street
Sydney NSW 2000, Australia
John Charles Lawson Level 36, Westpac Plaza Banker
50 Margaret Street
Sydney NSW 2000, Australia
Robert McDonald Level 36, Westpac Plaza Finance Executive
50 Margaret Street
Sydney NSW 2000, Australia
Michael Anthony Migro Level 36, Westpac Plaza Manager
50 Margaret Street
Sydney NSW 2000, Australia
</TABLE>
Powers
Subject to the Master Trust Deed and the Series Notice, the Issuer Trustee
has all the rights, powers and discretion over and in respect of the Trust
Assets which it could exercise as if it were the beneficial owner of those
assets. These powers include the ability to invest in Authorized Investments, to
issue Notes and to enter into Support Facilities.
The Master Trust Deed expressly permits the Issuer Trustee to appoint the
Servicer to retain custody of the mortgage documents for the Trust in accordance
with the Servicing Agreement, and for the Issuer Trustee to lodge documents with
the Servicer.
Full details of the powers of the Issuer Trustee are set out in the Master
Trust Deed.
Duties
The Issuer Trustee is required to act honestly and in good faith and to
exercise such diligence and prudence as a prudent person of business would
exercise in performing its express functions and in exercising its discretion
under the Master Trust Deed. It must keep each WST trust separate from the
others and do everything necessary to ensure it can comply with its obligations
under the Transaction Documents.
In particular the Issuer Trustee has the duty to maintain a register of
Authorized Investments (other than the Housing Loans) and to ensure that the
Trust Manager keeps accounting records which correctly record and explain all
amounts paid and received by the Issuer Trustee.
The Issuer Trustee is required to act continuously as trustee of the Trust
until the Trust is terminated as provided by the Master Trust Deed or the Issuer
Trustee has retired or been removed from office in the manner detailed below.
Each Noteholder acknowledges that:
(1) In the absence of fraud, negligence or breach of trust on its part
or on the part of any of its officers, employees, agents or delegates, the
Issuer Trustee shall not be liable personally in the event of failure to
make
61
<PAGE>
payments on the Payment Date for payment to any Noteholder, any
Beneficiary, the Trust Manager or any other person or for any loss
howsoever caused in respect of any of the trusts or to any Noteholder, any
Beneficiary, the Trust Manager or any other person.
(2) The Issuer Trustee acts as trustee only in its capacity as trustee
of the Trust and in no other capacity. Any liability arising under or in
connection with a Transaction Document (including, without limitation, the
Offered Notes) can be enforced against the Issuer Trustee only to the
extent to which it can be satisfied out of property of the Trust out of
which the Issuer Trustee is actually indemnified for the liability. This
limitation of the Issuer Trustee's liability applies despite any other
provision of the Transaction Documents and extends to all liabilities and
obligations of the Issuer Trustee in any way connected with any
representation, warranty, conduct, omission, agreement or transaction
related to the Transaction Documents or the Trust. The limitation will not
apply if there is a reduction in the Issuer Trustee's indemnification out
of trust assets as a result of the Issuer Trustee's fraud, negligence or
breach of trust.
(3) The Issuer Trustee has no duty, and is under no obligation, to
investigate whether a Trust Manager's Default, Servicer Transfer Event or
Title Perfection Event has occurred in relation to the Trust other than
where it has actual notice.
(4) The Issuer Trustee is required to provide the notices referred to
in the Master Trust Deed in respect of a determination of Adverse Effect
only if it is actually aware of the facts giving rise to the Adverse
Effect.
(5) In making any such determination, the Issuer Trustee will seek and
rely on advice given to it by its advisors in a manner contemplated by the
Master Trust Deed.
The Issuer Trustee is entitled to rely conclusively on, and is not required
to investigate the accuracy of:
(i) the contents of a Sale Notice given to it by an Approved Seller;
(ii) the contents of any report given to it by the Trust Manager or
the Servicer;
(iii) any calculations made by an Approved Seller, a Servicer or the
Trust Manager including the calculation of payments due to, or to be
charged against, the Noteholders, the Beneficiary or the Approved Seller on
specified dates;
(iv) the amount of, or allocation of, Collections; or
(v) the contents of any certificate provided to the Issuer Trustee
under the Master Trust Deed or any certificate given by the Trust Manager
or the Servicer, unless the Issuer Trustee is actually aware to the
contrary. The Issuer Trustee is not liable to any person in any manner
whatsoever in respect of these matters.
Delegation
In exercising its powers and performing its obligations and duties under
the Master Trust Deed, the Issuer Trustee may, with the approval of the Trust
Manager, delegate any or all of the duties, powers, discretion or other
functions of the Issuer Trustee under the Master Trust Deed or otherwise in
relation to the Trust, to a related company of the Issuer Trustee which is a
trustee company or trustee corporation for the purposes of any State or
Territory legislation governing the operation of trustee companies.
Issuer Trustee Fees and Expenses
The Issuer Trustee is entitled to a quarterly fee (the "Issuer Trustee
Fee") based on the average daily balance of the aggregate Housing Loan principal
during each Collection Period, payable in arrears on the relevant Payment Date.
62
<PAGE>
The Issuer Trustee is entitled to be reimbursed out of the assets of the
Trust for all expenses incurred in connection with the performance of its
obligations in respect of the Trust (other than general overhead costs and
expenses).
Removal of the Issuer Trustee
The Issuer Trustee is required to retire as trustee after a direction from
the Trust Manager in writing following an "Issuer Trustee's Default." An Issuer
Trustee's Default occurs if:
(1) an Insolvency Event has occurred and is continuing in relation to
the Issuer Trustee;
(2) any action is taken or any event occurs by or in relation to the
Issuer Trustee which causes the rating of any Notes to be downgraded;
(3) the Issuer Trustee, or any employee, delegate, agent or officer of
the Issuer Trustee, breaches any obligation or duty imposed on the Issuer
Trustee under the Master Trust Deed or any other Transaction Document in
relation to the Trust where the Trust Manager reasonably believes it may
have an Adverse Effect and the Issuer Trustee fails or neglects after 30
days' notice from the Trust Manager to remedy that breach;
(4) the Issuer Trustee merges or consolidates with another entity
without obtaining the consent of the Trust Manager and ensuring that the
resulting merged or consolidated entity assumes the Issuer Trustee's
obligations under the Transaction Documents; or
(5) there is a change in effective control of the Issuer Trustee from
that subsisting as at the date of the Master Trust Deed unless approved by
the Trust Manager.
Where the Issuer Trustee is removed because of its default, it shall bear
the costs of such removal. The Issuer Trustee will indemnify the Trust Manager
and the Trust for such costs.
On the removal of the Issuer Trustee, the Trust Manager, subject to giving
prior notice to the Rating Agencies, shall be entitled to appoint in writing
some other statutory trustee to be the Issuer Trustee under the Master Trust
Deed provided that appointment will not in the reasonable opinion of the Trust
Manager materially prejudice the interests of Noteholders. Until the appointment
is completed the Trust Manager shall act as Issuer Trustee and will be entitled
to the trustee's fee for the period it so acts as Issuer Trustee.
Voluntary Retirement of the Issuer Trustee
The Issuer Trustee may resign on giving to the Trust Manager (with a copy
to the Rating Agencies) not less than 3 months' notice in writing (or such other
period as the Trust Manager and the Issuer Trustee may agree) of its intention
to do so.
Before retirement, the Issuer Trustee must appoint a successor trustee who
is approved by the Trust Manager, or who may be the Trust Manager, and whose
appointment will not materially prejudice the interests of Noteholders. If a
successor trustee has not been appointed by the end of the 3 months' notice
period the Trust Manager shall act as trustee until a successor trustee is
appointed.
Limitation of Issuer Trustee's Liability
In the absence of fraud, negligence or breach of trust on its part, or on
the part of any of its officers, employees, agents or delegates, the Issuer
Trustee shall not be liable personally in the event of failure to pay moneys on
the Payment Date for payment to any Noteholder, any Beneficiary, the Trust
Manager or any other person or for any loss howsoever caused in respect of any
of the trusts or to any Noteholder, any Beneficiary, the Trust Manager or any
other person.
63
<PAGE>
The Issuer Trustee acts as trustee only in its capacity as trustee of the
Trust and in no other capacity. A Noteholder cannot sue the Issuer Trustee
personally except in the case of fraud, negligence or breach of trust on the
part of the Issuer Trustee. Any liability arising under or in connection with a
Transaction Document (including, without limitation, any Offered Note) can be
enforced against the Issuer Trustee only to the extent to which it can be
satisfied out of property of the Trust out of which the Issuer Trustee is
actually indemnified for the liability. This limitation of the Issuer Trustee's
liability applies despite any other provision of the Transaction Documents and
extends to all liabilities and obligations of the Issuer Trustee in any way
connected with any representation, warranty, conduct, omission, agreement or
transaction related to the Transaction Documents or the Trust. The limitation
will not apply to the extent that there is a reduction in the Issuer Trustee's
indemnification out of trust assets as a result of the Issuer Trustee's fraud,
negligence or breach of trust.
The Issuer Trustee is also indemnified out of the Trust assets against
certain payments which it may be liable to make under the Consumer Credit
Legislation. The Approved Sellers have also indemnified the Issuer Trustee in
relation to such payments and the Issuer Trustee is required to first call on
the indemnity from the Approved Sellers.
The Master Trust Deed also contains other provisions which regulate the
Issuer Trustee's liability to Noteholders, other creditors and any Beneficiary.
The Issuer Trustee is not liable to any person for any losses, costs,
liabilities or expenses arising out of the exercise or non exercise of its
discretion (or by the Trust Manager of its discretion) or for any instructions
or directions given to it by the Trust Manager, the Servicer or either of the
Approved Sellers except to the extent that it is caused by the Issuer Trustee's
or its officer's, employee's, agent's or delegate's fraud, negligence or breach
of trust. The Issuer Trustee is also not liable for any Trust Manager's Default,
Servicer Transfer Event or Title Perfection Event. The Issuer Trustee is not
liable for any act, omission or default of the Servicer in relation to its
custodian duties or its obligations under the Servicing Agreement.
Rights of Indemnity of Issuer Trustee
Except where the Issuer Trustee fails to exercise due care or is otherwise
disentitled (including, without limitation, because of fraud, negligence or
breach of trust on its part) the Issuer Trustee will be indemnified out of the
Trust Assets against all losses and liabilities incurred by the Issuer Trustee
in properly performing any of its duties or exercising any of its powers under
the Transaction Documents in relation to the Trust.
Limitation of Seller Trustee's Liability and Rights of Indemnity
In the absence of fraud, negligence or breach of trust on its part, the
Seller Trustee shall not be liable personally in the event of failure to pay
moneys on the Payment Date for payment to any Noteholder, any Beneficiary, the
Trust Manager or any other person or for any loss howsoever caused in respect of
any of the trusts or to any Noteholder, any Beneficiary, the Trust Manager or
any other person.
The Seller Trustee acts as Seller Trustee only in its capacity as seller
trustee of the relevant Seller Trust and in no other capacity. A liability
arising under or in connection with a Transaction Document can be enforced
against the Seller Trustee only to the extent to which it can be satisfied out
of property of the relevant Seller Trust out of which the Seller Trustee is
actually indemnified for the liability. This limitation of the Seller Trustee's
liability applies despite any other provision of the Transaction Documents and
extends to all liabilities and obligations of the Seller Trustee in any way
connected with any representation, warranty, conduct, omission, agreement or
transaction related to the Transaction Documents, the Trust or the relevant
Seller Trust. The limitation will not apply to the extent that there is a
reduction in the Seller Trustee's indemnification out of trust assets or the
relevant Seller Trust as a result of the Seller Trustee's fraud, negligence or
willful default.
The Seller Trustee is also indemnified out of the assets of the relevant
Seller Trust against certain payments which it may be liable to make under the
Consumer Credit Legislation. Westpac has also indemnified the Seller Trustee in
relation to such payments and the Seller Trustee is required to first call on
the indemnity from Westpac.
64
<PAGE>
Rights of Indemnity of Seller Trustee
Except where the Seller Trustee fails to exercise due care or is otherwise
disentitled (including, without limitation, because of fraud, negligence or
breach of trust on its part) the Seller Trustee will be indemnified out of each
relevant Seller Trust against all losses and liabilities incurred by the Seller
Trustee in properly performing any of its duties or exercising any of its powers
under the Transaction Documents in relation to the Trust or any Seller Trust.
The Seller Trustee has not been involved in the preparation of, and does
not accept responsibility for, this Prospectus.
THE NOTE TRUSTEE
_________________ (the "Note Trustee"), in its capacity as note trustee
under the Note Trust Deed among the Issuer Trustee, the Trust Manager and the
Note Trustee dated on or about ___________, as amended from time to time (the
"Note Trust Deed").
ORIGINATOR OF THE HOUSING LOANS
Westpac Banking Corporation ("Westpac"), Level 4, 60 Martin Place, Sydney,
NSW 2000, Australia, was the first bank to be established in Australia. Westpac
was founded in 1817 and was incorporated in 1850 as Bank of New South Wales by
an Act of the New South Wales Parliament. In 1982, the Bank acquired The
Commercial Bank of Australia Limited, and the Bank changed its name to Westpac
Banking Corporation.
Today Westpac is one of the four major commercial banks in Australia and is
the largest commercial bank in New Zealand. The Westpac Group undertakes a wide
range of banking and financial activities including commercial and investment
banking, personal and small business banking, retail and wholesale funds
management, financial services and finance company operations.
The Australian banking activities of Westpac come under the supervision of
the Reserve Bank of Australia.
Year 2000
The origin of the Year 2000 "millennium bug" problem lies in the way
information in computer systems relating to calendar dates has been stored.
Computer systems, built when data storage was expensive, saved only the last two
digits of a year for date calculations in order to reduce data storage
requirements. These systems are therefore unable to differentiate, for example,
between the years 1900 and 2000. This inability to differentiate between the
different centuries could result in discrepancies such as erroneous interest
rate calculations and inaccurate statement reporting.
In recognition of the seriousness of the problem, work within the Westpac
Group began in 1996 when a Year 2000 project was initiated. The conversion plan
for making the Westpac Group's applications Year 2000 compliant is estimated to
cost approximately A$60 million, of which A$24 million has been spent as of the
end of March 1998. To the maximum extent possible, the project will utilize
existing Westpac Group resources. The objective is that all systems will be
materially Year 2000 compliant by December 31, 1998, to allow adequate time for
testing and to minimize resource requirements in later years. Management of
Westpac currently estimates that the balance of the Year 2000 project conversion
will be completed by December 1998.
THE SERVICER
General
In 1996, Westpac established a wholly owned subsidiary, The Mortgage
Company Pty Limited ("TMC") of Level 6, 228 Pitt Street, Sydney 2000, Australia,
to provide mortgage servicing capability to both Westpac and to third parties.
65
<PAGE>
TMC operates from a new servicing center in Adelaide, known as the Mortgage
Processing Centre ("MPC"). The MPC employs over 1,000 staff, and processes
approximately 1400 new applications per day.
The MPC performs the following functions for Westpac: application
processing, telephone support, pre-settlement, settlement, post-settlement,
servicing and account maintenance, collections and enforcement and document
custody.
Servicing of Housing Loans
Under the Servicing Agreement, the ongoing servicing of the Housing Loans
will be performed by TMC, as the Servicer at the MPC. Servicing procedures
include responding to customer inquiries, managing and servicing the features
and facilities available under the Housing Loans and the management of
delinquent Housing Loans. The servicing functions performed by the MPC support,
and are supported by, the activities of Westpac's branches, telemarketing and
telebanking centers. In addition, the MPC services housing loans for third
parties.
The Servicer is contractually obligated to administer the Housing Loans:
(i) in accordance with the Servicing Agreement; (ii) in accordance with
Westpac's policies, which are under regular review and may change from time to
time in accordance with business judgment and changes to legislation and
guidelines established by relevant regulatory bodies; and (iii) to the extent
not covered by paragraphs (i) and (ii), by exercising the degree of diligence
and care expected of an appropriately qualified Servicer of the relevant Housing
Loans. See "DESCRIPTION OF THE SERVICING AGREEMENT."
Document Custody
The Servicer is responsible for custody of the mortgage title documents on
behalf of the Issuer Trustee and has custody of the Relevant Documents in
accordance with the Servicing Agreement. See "DESCRIPTION OF THE SERVICING
AGREEMENT--Document Custody."
Collection and Enforcement Procedures
Borrowers must make the minimum payment due under the terms and conditions
of the Housing Loan on or before the due date for that installment under the
relevant loan documents. Payments are credited to the Housing Loan on the day of
receipt. Interest is calculated daily and can be charged monthly or when a
payment is made. Any payments not received by the due date will produce a
compounding interest effect.
A housing loan is considered delinquent ("Delinquent") whenever the minimum
installment amount is not met. The collections system inspects all accounts
which are delinquent and records those housing loans for action and follow-up.
Borrowers are notified by telephone and/or by mail when their housing loan
becomes Delinquent. Housing loans are allocated to collections officers who take
action depending on the delinquency history of the Borrower, equity in the
property and the ability of the Borrower to meet future installments. Where a
housing loan that is Delinquent is subject to a Mortgage Insurance Policy, the
relevant Mortgage Insurer is notified of the housing loan's progress and all
follow-up actions are taken by Westpac and the Servicer.
When a housing loan is 10 days delinquent, it is identified in the Mortgage
Servicing System and transferred to the collection system of the MPC. Generally,
once a housing loan is 15 days delinquent, a computer generated letter is sent
to the borrower advising of the arrears and requesting that the borrower make
payments so that his account is current. When the account reaches between 23 and
29 days delinquent, the borrower will be contacted by telephone or, if not
contacted, a second letter will be sent by day 30. Between day 30 and day 45
generally the borrower will again be contacted by telephone. When the account
reaches between 45 and 58 days delinquent, a third letter is generally issued
which requests that the account be made current within 15 days of the date
thereof. Generally, after an account is between 62 and 73 days overdue, a demand
for full arrears is issued. Between 97 and 110 days, if the account continues to
be in arrears, a demand notice will generally be issued to the borrower and the
process of contract enforcement and loss recovery begins. The time periods
specified herein assume the borrower has either taken no action or has not
honored any commitments made in relation to the arrears.
66
<PAGE>
After a default by a borrower a mortgagee can exercise its power of sale of
the mortgaged property. To exercise this power, a mortgagee must comply with the
statutory restrictions of the relevant state or territory as to notice
requirements (see "CERTAIN LEGAL ASPECTS OF THE HOUSING LOANS - Enforcement of
Housing Loans"). The length of time between the decision to exercise its power
of sale and final completion of the sale will be dependent on factors outside
the control of the Servicer, such as whether the relevant mortgagor contests the
sale and the market conditions at the time.
Under some Housing Loans which are subject to a variable rate of interest,
a Borrower may prepay amounts which are additional to their minimum payments to
build up a buffer of funds, which is the difference between the total amount
paid by them and the total of the minimum payments required to have been made by
them. If the Borrower subsequently fails to make some or all of a minimum
payment, the collection system will apply the amount of that buffer of funds
against that missed payment. The relevant Housing Loan will not be considered to
be Delinquent until the total amount of missed payments exceeds the "credit
buffer."
Under a Housing Loan which is charged a variable rate of interest, a
Borrower who is on maternity or paternity leave and who meets specific
eligibility criteria may apply to reduce their monthly home loan repayment by up
to 50% for a maximum of six months. During the reduced repayments period, if the
payment is not sufficient to meet the interest due, the unpaid interest payment
will capitalize on the loan balance and the loan may negatively amortize.
Repayments are adjusted at the end of the parental leave period to ensure that
the loan will be repaid within its original contracted maturity.
The collection and enforcement procedures may change from time to time in
accordance with business judgment and changes to legislation and guidelines
established by the relevant regulatory bodies.
Delinquencies and Mortgagee in Possession with respect to the Securitized
Portfolios
The following tables set forth delinquency and MIP information for each of
the Securitized Portfolios (as defined herein) serviced by the Servicer in its
capacity as Servicer of securitized loans as of December 1997, March 1998, June
1998 and September 1998. "Mortgagee in Possession" or "MIP" means a mortgagee in
possession of the related Mortgaged Property who, following an enforcement of
the relevant mortgage, is able to deal with the Mortgaged Property without
becoming the absolute owner of the Mortgaged Property. The portfolios of
securitized housing loans (the "Securitized Portfolios") consist of the Housing
Loans relating to the Series 1997-2 WST Trust, the Series 1997-3 WST Trust, the
Series 1997-4E WST Trust and the Series 1998-1G WST Trust. The indicated periods
of delinquency are based on the number of days past due on a contractual basis.
Similar information with respect to the Series 1998-2G WST Trust will be
contained in the reports presented through Reuters for access by investors. Such
reports will be compiled using the same methodology as that used to compile the
information contained in the table below.
67
<PAGE>
Delinquencies and MIP
Series 1997-2 WST Trust
<TABLE>
<CAPTION>
As of As of
December 14, 1997 March 14, 1998
-------------------------------------------- -------------------------------------------
Percent Percent
By Percent By By Percent By
By No. Dollar By No. Dollar By No. Dollar By No. Dollar
of Loans Amount of Loans Amount of Loans Amount of Loans Amount
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Series 1997-2 Portfolio
Period of Delinquency:
30-59 Days................ 44 4,086,266 0.74 0.79 38 3,846,360 0.67 0.80
60-89 Days................ 10 1,151,603 0.17 0.22 15 1,631,217 0.27 0.34
90 Days or more........... 3 466,842 0.05 0.09 4 463,744 0.08 0.10
Total Delinquent Loans
Housing Loans in MIP(1)
</TABLE>
<TABLE>
<CAPTION>
As of As of
[June 14, 1998] [September 14, 1998]
------------------------------------------- -------------------------------------------
Percent Percent
By Percent By By Percent By
By No. Dollar By No. Dollar By No. Dollar By No. Dollar
of Loans Amount of Loans Amount of Loans Amount of Loans Amount
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Series 1997-2 Portfolio
Period of Delinquency:
30-59 Days................
60-89 Days................
90 Days or more...........
Total Delinquent Loans
Housing Loans in MIP(1)
</TABLE>
- ---------------------------
(1) Housing Loans in MIP are also included under the heading "Total Delinquent
Loans."
Delinquencies and MIP
Series 1997-3 WST Trust
<TABLE>
<CAPTION>
As of As of
December 14, 1997 March 14, 1998
---------------------------------------------- ------------------------------------------
Percent Percent
By Percent By By Percent By
By No. Dollar By No. Dollar By No. Dollar By No. Dollar
of Loans Amount of Loans Amount of Loans Amount of Loans Amount
-------- ------ -------- ------ -------- ------ -------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Series 1997-3 Portfolio
Period of Delinquency:
30-59 Days.............. 36 3,153,716 0.53 0.50 49 5,052,285 0.75 0.85
60-89 Days.............. 15 1,274,948 0.22 0.20 13 1,201,231 0.20 0.20
90 Days or more......... 7 846,185 0.10 0.13 11 1,393,831 0.17 0.23
Total Delinquent Loans
Housing Loans in MIP(1)
</TABLE>
68
<PAGE>
<TABLE>
<CAPTION>
As of As of
[June 14, 1998] [September 14, 1998]
------------------------------------------- -----------------------------------------
Percent Percent
By Percent By By Percent By
By No. Dollar By No. Dollar By No. Dollar By No. Dollar
of Loans Amount of Loans Amount of Loans Amount of Loans Amount
-------- ------ -------- ------ -------- ------ -------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Series 1997-3 Portfolio
Period of Delinquency:
30-59 Days..............
60-89 Days..............
90 Days or more.........
Total Delinquent Loans
Housing Loans in MIP(1)
</TABLE>
- ---------------------------
(1) Housing Loans in MIP are also included under the heading "Total Delinquent
Loans."
Delinquencies and MIP
Series 1997-4E WST Trust
<TABLE>
<CAPTION>
As of As of
December 9, 1997 March 9, 1998
------------------------------------------- ------------------------------
Percent Percent
By Percent By By Percent By
By No. Dollar By No. Dollar By No. Dollar By No. Dollar
of Loans Amount of Loans Amount of Loans Amount of Loans Amount
-------- ------ -------- ------ -------- ------ -------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Series 1997-4E Portfolio
Period of Delinquency:
30-59 Days................ 16 1,805,138 0.25 0.27 30 3,299,468 0.48 0.51
60-89 Days................ 6 727,943 0.09 0.11 7 824,236 0.11 0.13
90 Days or more........... 2 172,916 0.03 0.02 6 328,043 0.09 0.05
Total Delinquent Loans
Housing Loans in MIP(1)
</TABLE>
<TABLE>
<CAPTION>
As of As of
[June 9, 1998] [September 9, 1998]
------------------------------------------- -------------------------------------------
Percent Percent
By Percent By By Percent By
By No. Dollar By No. Dollar By No. Dollar By No. Dollar
of Loans Amount of Loans Amount of Loans Amount of Loans Amount
-------- ------ -------- ------ -------- ------ -------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Series 1997-4E Portfolio
Period of Delinquency:
30-59 Days................
60-89 Days................
90 Days or more...........
Total Delinquent Loans
Housing Loans in MIP(1)
- ---------------------------
</TABLE>
(1) Housing Loans in MIP are also included under the heading "Total Delinquent
Loans."
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<PAGE>
Delinquencies and MIP
Series 1998-1G WST Trust
<TABLE>
<CAPTION>
As of As of
[July 20, 1998] [October 19, 1998]
------------------------------------------- -------------------------------------------
Percent Percent
By Percent By By Percent By
By No. Dollar By No. Dollar By No. Dollar By No. Dollar
of Loans Amount of Loans Amount of Loans Amount of Loans Amount
-------- ------ -------- ------ -------- ------ -------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Series 1997-4E Portfolio
Period of Delinquency:
30-59 Days................
60-89 Days................
90 Days or more...........
Total Delinquent Loans
Housing Loans in MIP(1)
</TABLE>
(1) Housing Loans in MIP are also included under the heading "Total Delinquent
Loans."
[As of the date hereof, there have been no gains or losses with respect to
the Securitized Portfolios. Accordingly, no gain/loss tables are presented
herein.]
It is unlikely that the delinquency experience of the Housing Loans
comprising the Series 1998-2G WST Trust will correspond to the delinquency
experience of the Securitized Portfolios set forth in the foregoing tables. The
statistics shown above represent the delinquency experience for the Securitized
Portfolios only for the periods presented, whereas the aggregate delinquency
experience on the Housing Loans comprising the Securitized Portfolios will
depend on the results obtained over the life of the Securitized Portfolios.
There can be no assurance that the Housing Loans comprising the Series 1998-2G
WST Trust will perform consistently with the delinquency or foreclosure
experience described herein. It should be noted that if the residential real
estate market in Australia should experience an overall decline in property
values, the actual rates of delinquencies and foreclosures could be higher than
those previously experienced by the Servicer with respect to the Securitized
Portfolios. In addition, adverse economic conditions may affect the timely
payment by Borrowers of scheduled payments of principal and interest on the
Housing Loans and, accordingly, the actual rates of delinquencies and
foreclosures with respect to the Series 1998-2G WST Trust.
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<PAGE>
THE TRUST MANAGER
General
Westpac Securitisation Management Pty Limited (ACN 081 709 211) is
appointed as trust manager (the "Trust Manager" or "WSML") of the Trust on the
terms set out in the Master Trust Deed and the Series Notice. WSML is a wholly
owned indirect subsidiary of Westpac and located at Level 4, 60 Martin Place,
Sydney, NSW 2000, Australia. The subsidiary was formed to provide specialized
trust management services for securitization programs for the Westpac Group.
Incorporation
The Trust Manager was incorporated on February 19, 1998 in the Australian
Capital Territory under the Corporations Law of the Commonwealth of Australia.
Share Capital
The authorized share capital of the Trust Manager is A$100,000,000 shares.
The issued share capital of the Trust Manager is one fully paid share of A$1.00.
Such share is held by Westpac Equity Holdings Pty Ltd.
Directors
The directors of the Trust Manager are as follows:
<TABLE>
<CAPTION>
Name Business Address Principal Activities
- ---- ---------------- --------------------
<S> <C> <C>
R. Patrick Handley Level 4, 60 Martin Place Bank Executive
Sydney, NSW 2000
Australia
Philip Chronican Level 4, 60 Martin Place Bank Executive
Sydney, NSW 2000
Australia
Lewis E. Love, Jr. 575 Fifth Avenue Legal Counsel
39th Floor
New York, New York 10017-2422
Marten Touw Level 4, 60 Martin Place Group Treasurer
Sydney, NSW 2000
Australia
Kimberley Gire Level 4, 60 Martin Place Head of Group Securitization
Sydney, NSW 2000
Australia
</TABLE>
Duties and Role of the Trust Manager
Powers
The Trust Manager will carry out and perform the duties and obligations
contained in the Master Trust Deed and will have full and complete powers of
management of the Trust, including without limitation in relation to the conduct
of the day to day operation of the Trust and the administration and servicing of
the assets (which are not serviced by the Servicer), borrowings and other
liabilities of the Trusts. The Issuer Trustee has no duty to supervise the Trust
Manager in the performance of its functions and duties or the exercise of its
discretion.
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<PAGE>
The Trust Manager has the absolute discretion to recommend Authorized
Investments to the Issuer Trustee and direct the Issuer Trustee in relation to
those Authorized Investments. The Issuer Trustee's role is to give effect to all
such recommendations or directions.
Delegation
The Trust Manager may in carrying out and performing its duties and
obligations contained in the Master Trust Deed delegate to Westpac, or any of
the Trust Manager's or Westpac's officers and employees, all acts, matters and
things (whether or not requiring or involving the Trust Manager's judgment or
discretion), or appoint any person to be its attorney, agent, delegate or
sub-contractor for such purposes and with such powers as the Trust Manager
thinks fit.
Trust Manager's Fees and Expenses
The Trust Manager is entitled to a quarterly fee (the "Trust Manager Fee")
on the average daily balance of the aggregate principal balance of Housing Loans
outstanding during the Collection Period payable in arrears on the relevant
Payment Date.
The Trust Manager is entitled to be reimbursed out of the Trust Assets for
all expenses incurred in connection with the performance of its obligations in
respect of the Trust (other than general overhead costs and expenses).
Removal of the Trust Manager
The Trust Manager shall retire as trust manager if so directed by the
Issuer Trustee in writing following a Trust Manager's Default. A "Trust
Manager's Default" occurs if:
(1) the Trust Manager fails to make any payment required by it within
the time period specified in a Transaction Document, and that failure is
not remedied within 10 Business Days of receipt from the Issuer Trustee of
notice of that failure;
(2) an Insolvency Event has occurred and is continuing in relation to
the Trust Manager;
(3) the Trust Manager breaches any obligation or duty imposed on the
Trust Manager under the Master Trust Deed, any other Transaction Document
or any other deed, agreement or arrangement entered into by the Trust
Manager under the Master Trust Deed in relation to the Trust, the Issuer
Trustee reasonably believes that such breach has an Adverse Effect and the
breach is not remedied within 30 days' notice being given by the Issuer
Trustee (except in the case of reliance by the Trust Manager on the
information provided by, or action taken by, the Servicer, or if the Trust
Manager has not received information from the Servicer which the Trust
Manager requires to comply with the obligation or duty); or
(4) a representation, warranty or statement by or on behalf of the
Trust Manager in a Transaction Document or a document provided under or in
connection with a Transaction Document is not true in a material respect or
is misleading when repeated and is not remedied to the Issuer Trustee's
reasonable satisfaction within 90 days after notice from the Issuer Trustee
where (as determined by the Issuer Trustee) it has an Adverse Effect.
The costs of removal of the Trust Manager after a Trust Manager's Default
shall be borne by the Trust Manager. The Trust Manager has agreed to indemnify
the Issuer Trustee and the Trust for those costs.
On retirement or removal of the Trust Manager, the Issuer Trustee may
appoint another trust manager, provided the appointment will not materially
prejudice the interests of Noteholders. Until a replacement Trust Manager is
appointed, the Trust Manager must continue as Trust Manager. If a replacement
Trust Manager is not appointed within 120 days of the Issuer Trustee electing to
appoint a new Trust Manager, the Issuer Trustee will be the new Trust Manager.
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<PAGE>
Voluntary Retirement of the Trust Manager
The Trust Manager may resign on giving to the Issuer Trustee (with a copy to
the Rating Agencies) not less than 3 months' notice in writing (or such other
period as the Trust Manager and the Issuer Trustee may agree) of its intention
to do so.
Before retirement, the Trust Manager must appoint a successor Trust Manager
who is approved by the Issuer Trustee, or who may be the Issuer Trustee, and
whose appointment will not materially prejudice the interests of Noteholders. If
a successor Trust Manager has not been appointed by the end of the 3 months'
notice period the Issuer Trustee shall act as Trust Manager until a successor
trust manager is appointed.
Limitation of Trust Manager's Liability
The principal limitations on the Trust Manager's liability are set out in
full in the Master Trust Deed. These include the following limitations:
(1) in the absence of fraud, negligence or wilful default on its part
or on the part of any of its officers, employees, agents or delegates, the
Trust Manager shall not be liable personally in the event of failure to pay
moneys on the due date for payment to any Noteholder, any Beneficiary, the
Issuer Trustee or any other person or for any loss howsoever caused in
respect of any of the Trusts or to any Noteholder, any Beneficiary, the
Issuer Trustee or other person;
(2) the Trust Manager will not be personally liable to indemnify the
Issuer Trustee or make any payments to any other person in relation to the
Trust except that there will be no limit on the Trust Manager's liability
for any fraud, negligence or wilful default by it in its capacity as the
Trust Manager of the Trust;
(3) the Trust Manager will be indemnified out of the Trust in respect
of any liability, cost or expense properly incurred by it in its capacity as
Trust Manager of the Trust or so incurred by any of its delegates,
sub-delegates or agents; and
(4) subject to the Master Trust Deed, the Trust Manager is not
responsible for any act, omission, misconduct, mistake, oversight, error of
judgment, forgetfulness or want of prudence on the part of the Issuer
Trustee, the Servicer or any agent appointed by the Issuer Trustee or the
Trust Manager or on whom the Issuer Trustee or the Trust Manager is entitled
to rely under this deed (other than a related company), attorney, banker,
receiver, barrister, solicitor, agent or other person acting as agent or
adviser to the Issuer Trustee or the Trust Manager.
WESTPAC RESIDENTIAL LOAN PROGRAM
Origination of Housing Loans
The following are the primary sources for the origination of housing loans
for Westpac: the Westpac branch network, mobile finance managers, accredited
brokers and national telemarketing centers. Inquiries are also often generated
by advertising and direct mail campaigns.
The origination process for housing loans is carried out initially within
the appropriate Westpac branch or broker office. The origination process for all
housing loans is completed within the MPC.
Underwriting of Housing Loans
The following is a description of the underwriting processes employed by
Westpac in evaluating whether to fund a particular housing loan. When an
application is received, it is processed in accordance with Westpac's credit
policy and procedures. Credit assessment is undertaken initially using Westpac's
centrally controlled credit scoring system. The scoring system is based on
proprietary information, such as Westpac's own historical credit underwriting
experience and
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<PAGE>
product policy rules. The process also includes a reference from the Credit
Reference Association of Australia. Housing loans passing through the credit
scoring system will either be approved, declined or referred to a credit
specialist. Westpac's criteria do not seek to segment borrowers who pass the
credit scoring system into groups of differing credit quality. All borrowers
must meet Westpac's standard underwriting criteria and therefore are not charged
different rates of interest based on their credit quality. Where a housing loan
is referred to a credit specialist, it is generally because the application is
more complex (for example, where the Housing Loan principal is over A$750,000 or
because the application is from a self-employed individual). An assessment is
carried out by either credit officers within the Credit Unit at the MPC or, in
some cases, by State based Credit Centers, in accordance with designated Westpac
credit policy and their credit approval limits. Each housing loan is considered
on its merits within Westpac's credit policy and procedures.
Central to the approval process is the verification of the information
provided by the applicant(s), valuation of the proposed security property and
confirmation of the ability of the applicant to make payments on the housing
loan. The verification process involves conducting an independent check as to
the accuracy and correctness of the information provided by the potential
Borrower, particularly the documentation provided by the prospective borrower
and the employment and income details of the prospective borrower. Verification
relating to the income of self-employed applicants involves checking annual
accounts and other financial information.
All applicants are required to have a minimum monthly income net of taxes in
excess of all monthly expenditures (including the housing loan being applied
for) with consideration given to likely increases in future interest rates.
Westpac policy requires substantiation of the property value either by
contract of sale or valuation by a registered panel valuer. A valuation of the
security property is required where lender's mortgage insurance is required,
where the Housing Loan Principal is greater than A$250,000 or the LVR is greater
than 80% (although the LVR and Housing Loan Principal may be lower if the
relevant Mortgaged Property is in a particular geographic area). Valuations must
be performed by registered valuers who are members of the Australian Institute
of Valuers and Land Economists. In some remote centers, assessment of the
security value is undertaken by the local branch manager. In addition, housing
loans may be secured by more than one property and in such cases the combined
values of all relevant security properties is considered.
Following pre-approval of a housing loan, a terms and conditions letter is
sent to the applicant from the MPC. When Westpac has verified details relating
to the Housing Loan to its satisfaction and acceptance of the loan offer is
received, the housing loan can proceed through to settlement and disbursement.
Once all documentation is completed to Westpac's satisfaction and settlement or
disbursement has occurred, the security documents are stamped and registered. It
is a condition of Westpac's standard mortgage documentation that the mortgagor
must maintain full replacement value property insurance at all times. Westpac
currently maintains a blanket insurance policy with Cigna Insurance Asia Pacific
Pty Limited which covers loss from a mortgage default which follows from
physical loss, destruction or damage to a Mortgaged Property which is not
otherwise covered by adequate property insurance.
Approval policies are under regular review and may change from time to time
in accordance with business judgment and changes to legislation and guidelines
established by the relevant regulatory bodies.
Servicing of Housing Loans
Under the Servicing Agreement, the ongoing servicing of the Housing Loans
will be performed by the Servicer. See "THE SERVICER" and "DESCRIPTION OF THE
SERVICING AGREEMENT."
Housing Loan Products
Westpac originates loans for both owner-occupied and investment housing. The
products within the housing loan portfolio are the following: Premium Option
Home Loan, Premium Option Home Loan with 1 Year Guaranteed Rate, Special Offer
Fixed Option Home Loan, First Option Home Loan, Fixed Options Home Loan,
Variable Rate Investment Property Loan, Fixed Rate Investment Property Loan,
First Option Investment Property Loan and Special Fixed Rate
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<PAGE>
Investment Property Loan or any other similar loan product, however named, with
some or all the features referred to under "Housing Loan Features." During the
term of any Housing Loan, Westpac may from time to time or at the request of the
related Borrower change any of the features of such Housing Loans.
The following provides a general description of some of the Housing Loan
products detailed above. The Housing Loans comprising the Mortgage Pool must
satisfy certain eligibility criteria as specified under "THE TRUST
FUND--Representations and Warranties."
Owner Occupied Home Loans
First Option Home Loans: These loans are low variable rate owner-occupied
home loans for borrowers motivated by price. The product was developed to
compete with products offered by non-bank originators. Additional loan features
(as described below) can be activated on request by the borrower for a fee. The
current maximum term for this product is 25 years, although it may be changed to
30 years in the future.
Premium Option Home Loans: These loans are variable rate owner-occupied home
loans. These loans have a maximum term to maturity of 30 years and a higher rate
of interest than the First Option Home Loan and as a result, borrowers are
allowed access to the various loan features at no or reduced additional cost.
Premium Option Home Loans with 1 Year Guaranteed Rate: These loans have an
introductory discounted fixed rate for 12 months and then convert to a Premium
Option Home Loan. Apart from the introductory fixed rate period, the loan has
the same features as the Premium Option Home Loan.
Special Offer Fixed Option Home Loans: These loans have a fixed rate period
of one or two years that converts to a Premium Option Home Loan. Apart from the
fixed rate period, the loan has the same features as the Premium Option Home
Loan. In 1996, this product was replaced by the Premium Option Home Loan with 1
Year Guaranteed Rate product described above.
Fixed Options Home Loans: These loans are fixed rate owner-occupied home
loans. Loan terms are to a maximum of 30 years with a maximum fixed rate term of
10 years. On maturity of the fixed rate term, the loan converts to the Premium
Option Home Loan unless the borrower requests a further fixed rate period.
Certain product features (e.g., redraw) are not available during the fixed rate
period.
Investment Property Loans
An investment property loan is a loan which assists with the purchase or
refinancing of residential property for investment purposes such as rental
income or capital gain. The primary security for the loan is a registered first
party first ranking mortgage over residential property.
Investment property loans can be either fixed rate or variable rate loans
with a maximum term of 25 years. The loans may provide for interest only
payments for a maximum term of 5 years and then must convert to required payment
of principal and interest. Loans may have fixed rate terms for up to a maximum
of 10 years which will convert at such time to a variable rate unless the
borrower requests another fixed rate term.
The First Option Investment Property Loan is a low variable rate loan which
is similar to the First Option Home Loan and the Variable Investment Property
Loan is similar to the Premium Option Home Loan, the major difference being the
loan purpose.
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<PAGE>
Housing Loan Features
General
Housing Loans originated by Westpac may have some or all of the features
described below. In addition, during the term of any Housing Loan, Westpac may
change any of the features of such Housing Loan from time to time at the request
of the related Borrower. For the risks associated with the change in features,
see "RISK FACTORS--Ability to Change Housing Loan Features May Result in Changes
to the Mortgage Pool and Higher Principal Prepayment on the Offered Notes."
Substitution of Security
A Borrower may apply to substitute a new Mortgage over a residential
property for an existing Mortgage, to add a further Mortgage as security for a
Housing Loan or to release a security property under a Mortgage. Provided that
the application meets certain credit criteria, the Mortgage which secures a loan
may be portable and may be discharged without full repayment of the Housing Loan
provided another acceptable Mortgage is substituted in its place.
Where the substitute property meets the Eligibility Criteria and is
acceptable to the relevant Mortgage Insurer, and settlement on the substitute
property can occur simultaneously with the discharge of the current property,
the Housing Loan will remain in the Mortgage Pool. Where the substitute property
does not meet the Eligibility Criteria or is not acceptable to the Mortgage
Insurer, or the settlement does not occur simultaneously with discharge, the
Housing Loan will be transferred out of the Mortgage Pool for a corresponding
cash payment in the amount of the Unpaid Balance.
Redraw
Certain Housing Loans in the Mortgage Pool which are charged a variable rate
of interest have the benefit of a redraw facility which allows the Borrower to
draw on repayments made in excess of scheduled repayments (a "Redraw").
Borrowers may request a redraw at any time. In certain circumstances, Westpac
has a contractual obligation under the loan document to provide the redraw
should the Borrower be entitled to a redraw because of prepayments and if the
Housing Loan is not delinquent.
A Redraw will not result in the Housing Loan being removed from the Mortgage
Pool.
See "DESCRIPTION OF THE OFFERED NOTES--Description of the Redraw Facility,
Redraw Funding Securities and RFS Class A Notes."
Repayment Holiday
The terms of the Mortgage securing a Housing Loan which is charged a
variable rate of interest may provide for a "payment holiday." A payment holiday
can occur where the Borrower has prepaid amounts of principal, creating a buffer
of funds between the current principal balance and the amortization scheduled
balance. In such a case, the Borrower may cease to make payments until the
outstanding balance of the Housing Loan plus unpaid interest equals the balance
of the theoretical amortization schedule. Where the Housing Loan allows for a
"payment holiday", the Housing Loan payment will be taken from the buffer of
funds between the current principal balance and the amortization scheduled
balance at that payment date. If a buffer of funds is available, the system will
recognize this as an installment received. Housing Loans are not considered
Delinquent during a payment holiday and remain in the Mortgage Pool.
Early Repayment
Early repayment and partial prepayment of any Housing Loan is permitted
while such Housing Loan is subject to a variable rate of interest. Housing
Loans which are charged a fixed rate of interest, if repaid within their
fixed rate term, may be subject to an economic break cost or benefit in
accordance with the terms of the Housing Loan. For Housing Loans not
regulated by the Consumer Credit Legislation, an early termination fee may be
payable.
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Top Up
The loan agreement and/or Mortgage relating to a Housing Loan may allow for
the relevant Borrower to request from Westpac additional funds such that the
resulting principal balance will exceed the amortization scheduled balance at
that time. These are "top ups." Top ups will only be provided by Westpac in
accordance with its then current underwriting and credit policies. Any Housing
Loan for which Westpac provides a top up will be removed from the Mortgage Pool.
Parental Leave
Under a Housing Loan which is charged a variable rate of interest, any
Borrower who is on maternity or paternity leave and who meets specific
eligibility criteria may apply to reduce the related monthly home loan repayment
by up to 50% of such payment amount for a maximum of six months. During the
reduced repayment period, if the payment is not sufficient to meet the interest
due, the unpaid interest payment will capitalize on the loan balance and the
loan may negatively amortize. Scheduled repayments are adjusted at the end of
the parental leave period to ensure that the loan will be repaid within its
original contracted maturity.
Interest Rate Switching
The interest rate charged on Housing Loans may be either fixed rate or
variable rate. Fixed rate loans will automatically convert to variable rate at
the end of the fixed rate period (as specified in the related loan agreement)
unless the relevant Borrower elects another fixed rate period. Some loans have
an introductory fixed rate of interest which converts to a variable rate of
interest at the end of such introductory period. Some loans allow the Borrower
the option to convert from a variable rate to a fixed rate (or vice versa).
Account Management Facility
A Borrower may elect to have his/her regular salary paid in full or part
into their Housing Loan account. If this amount exceeds the amortized scheduled
balance at that time, surplus funds are created therein that may be redrawn.
This feature will allow the customer in the aggregate up to fifteen automatic
disbursements in each payment cycle against these surplus funds to other
accounts. These disbursements will be treated as Redraws.
Payment Type
On the Cut-Off Date, the payment types under the Housing Loans will be
interest only or principal, interest and fees ("P & I"). Interest only periods
can be for terms of one to five years. At the end of any interest only period,
the payment type under the relevant Housing Loan will convert to P & I payments
such that the scheduled payments will result in the Housing Loan being repaid on
an amortizing schedule within the contractual term of the Housing Loan.
Switching to an Investment or Owner-Occupied Loan
The Borrower may elect to switch the purpose of a Housing Loan from
owner/occupied property finance to investment property finance or vice versa.
Any such switch will not require the relevant Housing Loan to be removed from
the Mortgage Pool. The Borrower is required to notify Westpac of such switch and
the Mortgage Rate with respect to such Housing Loan may be changed accordingly.
Capitalized Fees
Westpac may offer Borrowers the ability to choose certain product features
without paying an up-front fee. Instead, the fee may be capitalized under the
Housing Loan and would constitute part of the principal to be amortized over the
life of the Housing Loan.
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Combination Housing Loans
A Borrower may split his/her Housing Loan into different portions which may
(among other things) be subject to different interest rate options. This could
occur, for example, where a Borrower elects to have one part of their Housing
Loan at a fixed rate and the other at a variable rate. Each loan is effectively
a separate loan which operates independently of the other loans in the combined
product and is governed by its own policy and procedures.
If a Housing Loan is "split" into more than one loan, any newly created
loans will not form part of the pool. In the event that the original loan is
retained (potentially at a reduced balance) in certain circumstances (e.g., it
satisfies all Eligibility Criteria and does not have any feature that would
require it to be removed from the pool) it will remain in the pool.
Additional Features
Westpac may, in relation to a Housing Loan in the Mortgage Pool, from time
to time seek to offer additional features which are not referred to above.
Before doing so, Westpac must satisfy the Trust Manager that the additional
features would not affect any relevant Mortgage Insurance Policy and would not
cause the rating of any Offered Notes to be downgraded or withdrawn.
THE MORTGAGE INSURANCE POLICIES
Mortgage Insurance Policies--General
On or before the Closing Date, the Mortgage Pool Insurance Policy will be
provided by Housing Loans Insurance Corporation Limited of 31 Market Street,
Sydney NSW 2000, Australia ("HLIC") to the Issuer Trustee to cover losses in
respect of each Housing Loan that is not subject to a PMI Policy. The Mortgage
Pool Insurance Policy generally applies to loans with an LVR of 80% or less at
the Cut-Off Date. The Mortgage Pool Insurance Policy will cover losses up to a
maximum aggregate amount of A$____________.
Each Housing Loan with an LVR of greater than 80% at the time of origination
(or a lower LVR where required by Westpac's standard credit policy) will have
been insured under a PMI Policy issued by Royal & Sun Alliance Lenders Mortgage
Insurance Limited (ACN 001 825 725) of Level 9, 465 Victoria Avenue, Chatswood
NSW ("Royal & Sun"), MGICA Limited (ACN 000 511 071) of Level 23 AMP Centre, 50
Bridge Street, Sydney NSW ("MGICA"), Westpac Lenders Mortgage Insurance Limited
(ACN 074 042 934) of Level 11, 50 Pitt Street, Sydney NSW ("WLMI") or HLIC. Each
Approved Seller will equitably assign its interest in each PMI Policy to the
Issuer Trustee on the Closing Date.
The HLIC Mortgage Pool Insurance Policy
General
The HLIC Mortgage Pool Insurance Policy (the "Mortgage Pool Insurance
Policy") is an insurance policy put in place to cover Housing Loans that were
not insured prior to the Cut-Off Date, and which had an LVR of less than or
equal to 80% as of the Cut-Off Date. Under the Mortgage Pool Insurance Policy,
HLIC will insure the Issuer Trustee with effect from the Closing Date for
Finance Charge Losses and Principal Losses in respect of the Housing Loans
(other than those Housing Loans which are individually covered by an HLIC, Royal
& Sun, WLMI or an MGICA Insurance Policy) (see "--Primary Mortgage Insurance
Policies" below).
Period of Cover
The Issuer Trustee has the benefit of the Mortgage Pool Insurance Policy in
respect of each relevant Housing Loan from the date the Housing Loan and the
relevant Mortgage are beneficially assigned to it until the earliest of:
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(i) other than with respect to the assignment to the Security Trustee
under the Security Trust Deed, the date the Housing Loan or the
relevant Mortgage is assigned, transferred or mortgaged to a person
other than a person who is or becomes insured under the Mortgage Pool
Insurance Policy;
(ii) the date the Housing Loan is repaid in full;
(iii) the date the Housing Loan ceases to be secured by the relevant
Mortgage (other than in the case where the Mortgage is discharged by
the operation of a compulsory acquisition or sale by a government for
public purposes);
(iv) the maturity date set out in the "Certificate of Insurance" (as
defined in the Mortgage Pool Insurance Policy), or as extended with the
consent of the Mortgage Insurer or as varied by a court under the
Consumer Credit Legislation; and
(v) the date the Mortgage Pool Insurance Policy is cancelled in respect
of the Housing Loan in accordance with the Mortgage Pool Insurance
Policy.
Cover for Losses
HLIC is obliged to pay to the Issuer Trustee the loss as at the Loss Date
(as defined herein) in respect of a Housing Loan, equal to the aggregate of:
(i) the principal amount outstanding under such Housing Loan together
with any interest, fees or charges (whether capitalized or not), that
are outstanding at the Loss Date;
(ii) fees and charges paid or incurred by the Issuer Trustee; and
(iii) such other amounts (including fines or penalties) which HLIC
approves in its absolute discretion;
which the Issuer Trustee is entitled to recover under the relevant Housing
Loan contract and Mortgage less deductions including:
(iv) any sale proceeds or compensation for compulsory acquisition of
the Mortgaged Property;
(v) in the event of foreclosure, the value of the Issuer Trustee's
interest in the Mortgaged Property;
(vi) any amount received by the Issuer Trustee under any collateral
security;
(vii) amounts paid to the Issuer Trustee by way of rents, profits or
proceeds in relation to the Mortgaged Property or under any policy of
insurance relating to the Mortgaged Property not applied in restoration
or repair;
(viii) any interest whether capitalized or not that exceeds interest at
the (non-default) interest rate (in accordance with the Consumer Credit
Legislation, if applicable) payable in relation to that Housing Loan;
(ix) any fees or charges, whether capitalized or not, that are not of a
type, or which exceed certain maximum amounts, as specified in the
Mortgage Pool Insurance Policy;
(x) losses directly arising out of physical damage to the Mortgaged
Property (other than from fair wear and tear or losses recovered and
applied in the restoration or repair of the Mortgaged Property prior to
the Loss Date or which were recovered under a policy of insurance and
applied to reduce the amount outstanding under the Housing Loan; and
(xi) any amounts by which a claim may be reduced under the Mortgage
Pool Insurance Policy.
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"Loss Date" means, in respect of a Housing Loan:
(a) where, following an event on or following which the Approved Seller
or the Issuer Trustee's power of sale in relation to the relevant Mortgaged
Property becomes exercisable whether immediately or at the option of the
Approved Seller or the Issuer Trustee or upon the expiration of any notice
or period of time and whether or not the power of sale only arises if before
the expiration of the notice or period of time the default remains
unremedied (a "Mortgage Default"), the Approved Seller or the Issuer Trustee
or a prior mortgagee in respect of the Mortgaged Property sells the
Mortgaged Property, the date on which the sale is completed;
(b) where, following a Mortgage Default, the Approved Seller or the
Issuer Trustee or an approved prior mortgagee in respect of the Mortgaged
Property becomes the absolute owner by foreclosure, the date on which that
event occurs;
(c) where, following a Mortgage Default, the Borrower sells the
Mortgaged Property with the prior approval of the Approved Seller, the
Issuer Trustee and HLIC, the date on which the sale is completed;
(d) where the Mortgaged Property is compulsorily acquired or sold by a
government for public purposes and there is a Mortgage Default (or where the
Mortgage has been discharged by the operation of the compulsory acquisition
or sale and there is a default in repayment of the loan secured by the
Mortgage which would have been a Mortgage Default but for the occurrence of
that event), the date being the later of the date of the completion of the
acquisition or sale or the date twenty-eight days after the date of the
Mortgage Default; and
(e) where the HLIC has agreed or determined to pay a claim under the
Mortgage Pool Insurance Policy, the date specified in that agreement or
determination.
If the Consumer Credit Legislation applies to a Mortgage, HLIC's liability
is limited to the amount required to discharge the mortgage under the Consumer
Credit Legislation.
Aggregate Limit
The Mortgage Pool Insurance Policy will be subject to an aggregate limit of
loss of A$__________.
Issuer Trustee's Interest Extinguished
If the Issuer Trustee's interest in a Housing Loan is extinguished in favor
of Westpac as a result of:
(1) a breach of Westpac's representations and warranties in relation to the
Housing Loan which is discovered within 120 days of the Closing Date (or, in
relation to Housing Loans assigned to the Issuer Trustee from the assets of
another Seller Trust, 120 days after the date on which those Housing Loans were
first sold by Westpac to the Issuer Trustee in its capacity as trustee of other
Seller Trusts) and which breach was not remedied within that period (see
"WESTPAC RESIDENTIAL LOAN PROGRAM--Eligibility Criteria"); or
(2) a repurchase of a Housing Loan in accordance with Westpac's right of
first refusal,
then Westpac will be entitled to the benefit of the Mortgage Pool Insurance
Policy in so far as it applies to that Housing Loan.
Refusal or Reduction in Claim
The amount of a claim may be reduced or cancelled by HLIC in the following
circumstances:
(i) any premium is not paid within twenty-eight days of the due date
therefor;
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(ii) the Housing Loan contract for the relevant Mortgaged Property does
not require the Mortgaged Property to be insured under a general
insurance policy;
(iii) there ceases to be a Servicer approved by HLIC to service the
Housing Loans for the Issuer Trustee;
(iv) a claim is not lodged within twenty-eight days of the relevant
Loss Date;
(v) there is any representation or statement (deemed or otherwise) in a
proposal for a Mortgage Pool Insurance Policy that is incorrect or the
duty of disclosure under the Mortgage Pool Insurance Policy is
breached;
(vi) the Issuer Trustee or the Servicer does not comply with the
reporting obligations under the Mortgage Pool Insurance Policy;
(vii) the relevant Mortgage has not been duly registered with the land
titles office in the jurisdiction where the related Mortgaged Property
is located; and
(viii) the Housing Loan contract, the Mortgage or any collateral
security for the relevant Mortgaged Property has not been duly stamped
in each relevant jurisdiction.
Under the Servicing Agreement, the Servicer undertakes to perform (and
indemnifies the Issuer Trustee against) certain obligations of the Issuer
Trustee, including the Issuer Trustee's duties of disclosure and its reporting
obligations under the Mortgage Pool Insurance Policy. See "--Servicer
Undertakings with Respect to Insurance Policies". This arrangement is
acknowledged in the Mortgage Pool Insurance Policy.
Circumstances in which claims under the Mortgage Pool Insurance Policy may
be reduced or cancelled also include the following events occurring in relation
to the Issuer Trustee without the approval of the Mortgage Insurer:
(i) the making of any additional advance (other than Redraws) upon the
security of a Mortgaged Property that ranks for payment ahead of the
Housing Loan;
(ii) materially altering the terms of a Housing Loan contract, any
related Mortgage or any collateral security other than an alteration
made in accordance with the Consumer Credit Legislation;
(iii) allowing its rights to be reduced against the Borrower, the
relevant mortgagor, any mortgage guarantor, any provider of any
collateral security or the Mortgaged Property by compromise,
postponement, partial discharge or otherwise;
(iv) approving any transfer or assignment of the Mortgaged Property
without full discharge of the Housing Loan;
(v) a violation by the Issuer Trustee of any provision of such Mortgage
Pool Insurance Policy; and
(vi) consenting to a further advance by a prior mortgagee previously
approved by HLIC upon the security of an approved prior mortgage.
Exclusions
The Mortgage Pool Insurance Policy does not cover any loss arising from: (i)
any war or warlike activities; (ii) nuclear contamination; (iii) the existence
or escape of any pollution or environmentally hazardous material; (iv) the fact
that the Housing Loan contract, the relevant Mortgage or any collateral security
is void or unenforceable; or (v) where the Consumer Credit Legislation applies,
any failure of the Housing Loan contract, the relevant Mortgage or any
collateral security to comply with the requirements of the Consumer Credit
Legislation. See "CERTAIN LEGAL ASPECTS OF THE HOUSING LOANS--Consumer Credit
Legislation."
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Claims
A claim may only be made under the Mortgage Pool Insurance Policy following
the Loss Date for the relevant Mortgage. If a Housing Loan has been in default
for at least 6 months HLIC may in its absolute discretion pay the claim for the
loss even if the Loss Date has not occurred. Claims are payable within 14 days
of receipt by HLIC of the completed claim form.
HLIC may, as a condition to payment of a claim, require an assignment to it
by the Issuer Trustee (at the Issuer Trustee's expense) of rights against the
Borrower or any mortgagor or require the Issuer Trustee to take action, or
empower HLIC to take action, in relation to the relevant Housing Loan or related
Mortgage.
Variations
HLIC may not vary the Mortgage Pool Insurance Policy for any Housing Loan
except where the variation is generally applied to all insured customers of the
same type in relation to the same type of insurance and where the variation is
necessitated to ensure that, as a consequence of a change in law after the date
of the Mortgage Pool Insurance Policy, HLIC is not in breach of the law.
Housing Loan Insurance Corporation Ltd (HLIC)
HLIC was established in 1965 by the Commonwealth Government of Australia
("Government") and is Australia's leading lenders' mortgage insurer ("LMI") with
approximately 50% of the Australian LMI market. In December 1997, the Government
sold HLIC to GE Capital Australia ("GECA") which is a wholly owned subsidiary of
GE Capital Services Inc. ("GE").
GE is a diversified industrial and financial services company with
operations in over 100 countries. It is rated AAA by Standard & Poor's, Aaa by
Moody's and AAA by Fitch. It has significant LMI business around the world,
operating in the United States, United Kingdom, Canada and now Australia and has
over US$165 billion of loans insured globally.
HLIC has been given a AAA claims paying rating in its own right by Standard
& Poor's, a Aa1 rating by Moody's and a AAA rating by Fitch. [Loans insured
prior to the sale to GECA will also have the benefit of a guarantee by the
Government. That proportion that has the benefit of the Government guarantee is
$______ as of the Cut-Off Date. ]
Primary Mortgage Insurance Policies
General
Each Borrower under a Housing Loan which had an LVR of greater than 80% at
the date of origination (or a lower LVR where required by Westpac's standard
credit policy) was required to effect a mortgage insurance policy with either
Royal & Sun, MGICA, WLMI or HLIC (a "PMI Policy"). Westpac is required to
equitably assign its interest in each PMI Policy to the Issuer Trustee on the
Closing Date. The consent of Royal & Sun, MGICA, WLMI and HLIC is required for
the assignment of the relevant Mortgages and the PMI Policies, and for the
Servicer to service the insured Housing Loans. Westpac must ensure that these
consents are obtained on or prior to the Closing Date.
Restrictions and Cancellation
The amount recoverable under each PMI Policy will generally be the amount
owing in relation to the relevant Mortgage (including unpaid principal, accrued
interest at any non-default rate, proper tax and reasonable enforcement costs
(subject in certain instances to insurer's consent)) less all amounts recovered
from enforcement of the Mortgage. However, there are a number of requirements
and restrictions imposed on the insured under each PMI Policy which may entitle
the Mortgage Insurer to cancel the PMI Policy or reduce the amount of a claim;
including:
(1) the existence of an encumbrance or other interest which affects or
has priority over the Mortgage;
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(2) the relevant Mortgage, or a guarantee or indemnity relating to the
Mortgage, ceasing to be effective;
(3) that there is a material omission or misstatement by the insured in
relation to the PMI Policy;
(4) that any premium is not paid when due or within the relevant grace
period (if any);
(5) termination by the insurer upon the giving of a set period of
notice;
(6) a breach by the insured of the PMI Policy; and
(7) certain circumstances which affect the insured's rights or
recoveries under the relevant Housing Loan or Mortgage.
Each PMI Policy has different provisions. The above is a summary of certain
provisions--some may not relate to, or may differ from, a particular PMI Policy.
Servicer Undertakings with Respect to Insurance Policies
Under the Servicing Agreement, the Servicer undertakes to:
(1) act in accordance with the terms of any Mortgage Insurance Policy;
(2) not do anything that would prejudicially affect the rights of the
Issuer Trustee under a Mortgage Insurance Policy; and
(3) promptly make claims and notify the Trust Manager when claims are
made.
Description of Royal & Sun, MGICA and WLMI
The Royal & Sun Alliance Group entered into the lenders mortgage insurance
market in Australia in 1989. Royal & Sun's Mortgage Insurance Division operates
as one of the major divisions of the Royal & Sun Alliance Group. Royal & Sun is
a subsidiary of Royal & Sun Alliance Insurance Australia Limited, which is one
of the five largest insurers in Australia with premium revenue of some A$1.1
billion, assets in excess of A$1.8 billion and a net asset position at December
31, 1997 of over A$373 million. Royal & Sun Alliance Lenders Mortgage Insurance
Limited is rated AA- by Standard & Poor's for its claim paying ability and A2 by
Moody's for its claim paying ability, and is owned by the Royal & Sun Alliance
group. Under a deed of indemnity, Royal & Sun is explicitly indemnified for
past, present and future obligations arising from insurance contracts net of
reinsurance by the Australian holding company for the group, Royal & Sun
Alliance Insurance Australia Holdings Limited. The business address of Royal &
Sun is Level 9, 465 Victoria Avenue, Chatswood, New South Wales, Australia.
MGICA has been operating in the Australian housing market since 1965 and is
a specialist insurer of residential mortgage loans. MGICA is owned and
explicitly supported by, AMP Limited ("AMP"), Australia's largest insurance
company. MGICA is rated AA- by Standard & Poor's for its claim paying ability
and A1 by Moody's for its claims paying ability. MGICA is strongly capitalized
after receiving an injection of A$50 million of capital from its parent, AMP, in
1995. Moody's indicates the geographic diversity of MGICA's insurance risk
profile is good and underwriting standards are considered appropriately
conservative. The business address of MGICA is Level 23 AMP Centre, 50 Bridge
Street, Sydney, New South Wales, Australia.
WLMI is an unrated insurance company authorized under the Insurance Act 1973
to carry on insurance business in Australia. WLMI is a wholly owned subsidiary
of Westpac Insurance Services (Brokers) Limited. The ultimate parent entity is
Westpac Banking Corporation. Under a Management Agreement and Quota Share
Reinsurance Agreement between WLMI and Royal & Sun Alliance Lenders Mortgage
Insurance Limited both dated August 27, 1996 Royal & Sun agrees to provide
management and administration services to WLMI and accepts 65% of the obligation
on each and
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every policy issued by WLMI. WLMI retains the remaining 35% of the obligation.
Under a Deed of Guarantee, Royal & Sun will unconditionally and irrevocably
guarantee the obligations of WLMI arising under policies issued by WLMI prior to
the termination of the deed, and to the extent that those obligations are not
recovered or met by contracts of reinsurance. The business address of WLMI is 50
Pitt Street, Sydney, New South Wales, Australia.
PREPAYMENT AND YIELD CONSIDERATIONS
The following information is given solely to illustrate the effect of
prepayments of the Housing Loans on the weighted average life of the Offered
Notes under the stated assumptions and is not a prediction of the prepayment
rate that might actually be experienced by the Housing Loans.
General
The rate of principal payments on the Offered Notes, the aggregate amount of
distributions on the Offered Notes and the yield to maturity of the Offered
Notes will be related to the rate and timing of payments of principal on the
Housing Loans. The rate of principal payments on the Housing Loans will in turn
be affected by the amortization schedules of the Housing Loans and by the rate
of principal prepayments (including for this purpose prepayments resulting from
refinancing, liquidations of the Housing Loans due to defaults, casualties,
condemnations and repurchases by an Approved Seller). The Housing Loans may be
prepaid by the Mortgagors at any time (subject, in the case of fixed rate
Housing Loans, to the payment of any applicable fees).
Prepayments
Prepayments, liquidations and purchases of the Housing Loans (including
optional purchase of the remaining Housing Loans in connection with the
termination of the Trust) will result in distributions on the Offered Notes of
principal amounts which would otherwise be distributed over the remaining terms
of such Housing Loans. Since the rate of payment of principal of the Housing
Loans will depend on future events and a variety of factors, no assurance can be
given as to such rate or the rate of principal prepayments. The extent to which
the yield to maturity of any Offered Note may vary from the anticipated yield
will depend upon the degree to which an Offered Note is purchased at a discount
or premium, and the degree to which the timing of payments thereon is sensitive
to prepayments, liquidations and purchases of such Housing Loans. The rate of
prepayment on the Housing Loans cannot be predicted. The prepayment experience
of the Trust with respect to the Housing Loans may be affected by a wide variety
of factors, including economic conditions, the availability of alternative
financing and homeowner mobility.
Weighted Average Lives
Generally, greater than anticipated prepayments of principal will increase
the yield on Offered Notes purchased at a price less than par and will decrease
the yield on Offered Notes purchased at a price greater than par. The effect on
an investor's yield due to principal prepayments on the Housing Loans occurring
at a rate that is faster (or slower) than the rate anticipated by the investor
in the period immediately following the issuance of the Offered Notes will not
be entirely offset by a subsequent like reduction (or increase) in the rate of
principal payments. The weighted average life of the Offered Notes will also be
affected by the amount and timing of delinquencies and defaults on the Housing
Loans and the recoveries, if any, on defaulted Housing Loans and foreclosed
properties.
The "weighted average life" of a note refers to the average amount of time
that will elapse from the date of issuance of the note to the date each dollar
in respect of principal repayable under such note is reduced to zero. The
weighted average life of the Offered Notes will be influenced by, among other
factors, the rate at which principal payments are made on the Housing Loans.
The following tables are based on a constant prepayment rate model ("CPR").
CPR represents an assumed constant rate of prepayment each month, expressed as a
per annum percentage of the principal balance of the pool of mortgage loans for
that month. CPR does not purport to be a historical description of prepayment
experience or a prediction of the anticipated rate of prepayment of any pool of
housing loans, including the Housing Loans. None of the Approved Sellers,
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the Trust Manager nor the Issuer Trustee believes that any existing statistics
of which it is aware provide a reliable basis for holders of Offered Notes to
predict the amount or the timing of receipt of prepayments on the Housing Loans.
Since the following tables were prepared on the basis of the assumptions in
the following paragraph, there are discrepancies between characteristics of the
actual Housing Loans and the characteristics of the Housing Loans assumed in
preparing the tables. Any such discrepancy may have an effect upon the
percentages of the principal balances outstanding and weighted average lives of
the Offered Notes set forth in the tables. In addition, since the actual Housing
Loans in the Trust have characteristics which differ from those assumed in
preparing the tables set forth below, the distributions of principal on the
Offered Notes may be made earlier or later than as indicated in the tables.
For the purpose of the tables below, it is assumed that: (i) the Closing
Date for the Offered Notes is___________, (ii) payments on the Offered Notes are
made on the 19th day of each Quarter regardless of the day on which the Payment
Date actually occurs, commencing in __________ and are made in accordance with
the priorities described herein, (iii) the scheduled monthly payments of
principal and interest on the Housing Loans will be timely delivered on the
first day of each month commencing in ___________ (with no defaults), (iv) all
prepayments are prepayments in full received on the last day of each month and
include 30 days' interest thereon, (v) Principal Collections are distributed
according to the rules of distribution set forth in "DESCRIPTION OF THE OFFERED
NOTES--Payments of Principal on the Notes"; and (vi) no optional termination is
exercised. The preceding clauses are the assumptions used in preparing the
following tables and are not necessarily expected to be predictive of the
Mortgage Pool's actual performance.
It is not likely that the Housing Loans will pay at any assumed CPR to
maturity or that all Housing Loans will prepay at the same rate. The assumed CPR
for this transaction is ____ %. In addition, the diverse remaining terms to
maturity of the Housing Loans (which include recently originated Housing Loans)
could produce slower distributions of principal than as indicated in the tables
at the assumed CPRs specified, even if the weighted average remaining term to
maturity of the Housing Loans is the same as the weighted average remaining term
to maturity of the assumptions described above. Investors are urged to make
their investment decisions on a basis that includes their determination as to
anticipated prepayment rates under a variety of the assumptions discussed herein
as well as other relevant assumptions.
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Percent of Original Invested Amount Outstanding at the Following
Percentages of CPR(1)
<TABLE>
<CAPTION>
Class A Notes: US$
----------------------------------------------------------------------------
Date 0% 10% 15% 20% 22.5% 25% 35% 45%
- ---- -- --- --- --- ----- --- --- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Initial Percent................... 100 100 100 100 100 100 100 100
Weighted Average Life(2)--
To Maturity (Years).............
To Call (Years).................
</TABLE>
- ----------
(1) The percentages in this table have been rounded to the nearest whole
number.
(2) The weighted average life of a Class is determined by (a) multiplying the
amount of each payment of principal thereof by the number of years from the
date of issuance to the related Payment Date, (b) summing the results and
(c) dividing the sum by the aggregate distributions of principal referred
to in clause (a) and rounding to three decimal places.
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Percent of Original Invested Amount Outstanding at the Following
Percentages of CPR(1)
<TABLE>
<CAPTION>
Class B Notes: $
----------------------------------------------------------------------------
Date 0% 10% 15% 20% 22.5% 25% 35% 45%
- ---- -- --- --- --- ----- --- --- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Initial Percent................... 100 100 100 100 100 100 100 100
Weighted Average Life(2)--
To Maturity (Years).............
To Call (Years).................
</TABLE>
- ----------
(1) The percentages in this table have been rounded to the nearest whole
number.
(2) The weighted average life of a Class is determined by (a) multiplying the
amount of each payment of principal thereof by the number of years from the
date of issuance to the related Payment Date, (b) summing the results and
(c) dividing the sum by the aggregate distributions of principal referred
to in clause (a) and rounding to three decimal places.
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DESCRIPTION OF THE OFFERED NOTES
General
The Notes will be issued pursuant to the terms of the Transaction Documents.
The following section contains summaries of the material terms of the
Transaction Documents. The summaries do not purport to be complete and are
subject to the provisions of the Transaction Documents. A copy of the Master
Trust Deed, and a form of each of the Series Notice, the Note Trust Deed and the
Security Trust Deed has been filed with the Commission as an Exhibit to the
Registration Statement of which this Prospectus is a part.
Pursuant to the Transaction Documents, on the Closing Date the Issuer
Trustee will issue two classes of notes (the "Offered Notes"), consisting of one
class of senior notes, designated as the Class A Mortgage Backed Floating Rate
Notes due ___________, in the original principal amount of US$_________ (the
"Class A Notes") and one class of subordinated notes, designated as the Class B
Mortgage Backed Floating Rate Notes, due __________, in the original principal
amount of US$___________ (the "Class B Notes"). In addition to the Class A Notes
and the Class B Notes, the Issuer Trustee may from time to time issue RFSs,
which may convert to RFS Class A Notes in certain circumstances. The Offered
Notes, the RFSs and the RFS Class A Notes are referred to herein as the "Notes."
See "--Description of the Redraw Facility, the Redraw Funding Securities and the
RFS Class A Notes" herein.
Payments on the Offered Notes will be made by the Principal Paying Agent on
each Payment Date to persons in whose names the Notes are registered as of the
related Record Date (the "Holders" or "Offered Noteholders"). The Payment Date
for the Notes will be the 19th day of each Quarter. A "Quarter" is each
three-month period in a year which period begins on February 1, May 1, August 1
and November 1. If any Payment Date would otherwise fall on a day which is not a
Business Day, it shall be postponed to the next day which is a Business Day
unless it would thereby fall into the next calendar month in which event it
shall be brought forward to the immediately preceding Business Day. The first
Payment Date will be ____________ in respect of the period from (and including)
the Closing Date to (but excluding) that date. The Record Date for any Payment
Date will be the second Business Day immediately preceding the Payment Date (so
long as the Offered Notes are held in book-entry form), or the last day of the
prior calendar month (if Definitive Notes have been issued).
A "Business Day" means (1) in relation to the Note Trust Deed, the Agency
Agreement and any Note, any day, other than a Saturday, Sunday or public
holiday, on which banks are open for business in London and New York City; (2)
in relation to US$ payments under a Currency Swap, any day, other than a
Saturday, Sunday or public holiday, on which banks are open for business in
London and New York City; and (3) in relation to A$ payments under the Currency
Swap and any other Transaction Document, any day, other than a Saturday, Sunday
or public holiday, on which banks are open for business in Sydney. If a public
holiday is occurring in any of the referenced locales, then such day is not a
Business Day, and no scheduled payments will be made on such day.
A "Collection Period" commences on and includes the 10th day of each Quarter
and runs until (and includes) the 9th day of the following Quarter with the
exception of the first Collection Period, which will commence on (and include)
the day after the Cut-Off Date and end on (and include) _________. The last
Collection Period is the period from the last day of the previous Collection
Period to the Termination Date of the Trust.
The first Interest Period in relation to the Notes commences on (and
includes) the Closing Date and ends on (but excludes) the first Payment Date
(being __________). Each succeeding Interest Period, commences on (and includes)
a Payment Date and ends on (but excludes) the next Payment Date. The final
Interest Period ends on (but excludes) the Maturity Date.
For any Interest Period, the "Interest Determination Date" is the second
London banking day prior to the commencement of that Interest Period. The first
Interest Determination Date, which relates to the Interest Period beginning
________, is ________. The "Collection Determination Date" is four Business Days
prior to each Payment Date. The first Collection Determination Date will be
__________.
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Each Class of Offered Notes initially will be represented by one or more
global notes (the "Book-Entry Notes") registered in the name of the nominee of
DTC (together with any successor depository, the "Depository"), except as set
forth below. Beneficial interests in each Class of Offered Notes will be
available for purchase in minimum denominations of US$100,000. The Issuer
Trustee has been informed by DTC that DTC's nominee will be Cede & Co.
Accordingly, Cede & Co. is expected to be the Noteholder of record of the
Offered Notes. Unless and until Definitive Notes are issued under the limited
circumstances described herein, no Note Owner (as defined herein) acquiring an
interest in any Class of Offered Notes will be entitled to receive a certificate
representing such Note Owner's interest in such Notes. Until such time, all
references herein to actions by Noteholders of any Class of Offered Notes will
refer to actions taken by the Depository upon instructions from its
participating organizations and all references herein to distributions, notices,
reports and statements to Noteholders of any Class of Offered Notes will refer
to distributions, notices, reports and statements to the Depository or its
nominee, as the registered Noteholder of such Class, for distribution to Note
Owners of such Class in accordance with the Depository's procedures. See
"--Book-Entry Registration" and "--Definitive Notes."
The Issuer Trustee will maintain a Paying Agent in London until the date the
Offered Notes are redeemed.
Collections and Payment
With respect to each Collection Period and on or prior to the Collection
Determination Date, the Trust Manager will determine the Collections (as defined
below) received and reconcile such receipts against expenses, including Interest
payable to Noteholders, that have accrued during such Collection Period. To the
extent necessary, the Trust Manager must direct the Issuer Trustee to draw on or
claim against the Liquidity Facility where available to make up shortfalls in
Collections. Various amounts will also be swapped under the Swap Agreements.
On the Collection Determination Date, the Trust Manager shall advise the
Issuer Trustee of the amounts to be paid. The Issuer Trustee will arrange for
the relevant payments to occur on the Payment Date.
Set out below is an example of relevant dates and periods for the allocation
of cashflows and their payments. All dates are assumed to be Business Days.
<TABLE>
<CAPTION>
<S> <C>
Collection Period 10th April to (and including) 9th July
Collection Determination Date 15th July
Remittance Date 17th July
Interest Determination Date 17th July
Notice Date 18th July
Payment Date 19th July
Interest Period 19th April to (but excluding) 19th July
</TABLE>
Collections
With respect to any Collection Period, "Collections" shall consist of
interest and principal receipts from the Housing Loans, the proceeds of
enforcement of Mortgages, the proceeds of claims under Mortgage Insurance
Policies and payments by the Approved Sellers or the Servicer in respect of
breaches of representations or warranties with respect to the Housing Loans.
Westpac or the Servicer, as a delegate of Westpac under the Servicing Agreement,
will receive the Collections in respect of the Housing Loans in the Mortgage
Pool.
So long as both (a) Westpac has a short term rating of at least A-1+ from
Standard & Poor's, P-1 from Moody's and F-1+ from Fitch and (b) the Collections
Account is maintained with Westpac or a subsidiary of Westpac, each of Westpac
and the Servicer shall deposit the amount equal to the Collections it receives
during the related Collection Period into the relevant Collections Account two
Business Days prior to the relevant Payment Date (the "Remittance
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Date") together with an amount equivalent to the interest that would have
accrued at the Bank Bill Rate on such amounts if such receipts had been
deposited into the Collections Account five Business Days following receipt by
Westpac or the Servicer (less any relevant tax).
If Westpac has a short term rating of less than A-1+ from Standard & Poor's,
less than P-1 from Moody's or less than F-1+ from Fitch, then Westpac and the
Servicer shall pay all Collections in its possession or control into the
Collections Account no later than five Business Days following receipt.
Notwithstanding the foregoing, the Collections Account may continue to be
maintained with Westpac for so long as it is an Approved Bank. An "Approved
Bank" means: (a) a bank which has a short term rating of at least A-1+ from
Standard & Poor's, P-1 from Moody's and F-1+ from Fitch; or (b) any bank or
financial institution which is specified to be an Approved Bank in the Series
Notice, but means Westpac for so long as it has a short term rating of A-1 or
better from Standard & Poor's, P-1 or better from Moody's and F-1 or better from
Fitch.
If, however, the Collections Account is not maintained with Westpac, or a
subsidiary of Westpac, all Collections in relation to the Trust must be
deposited into the Collections Account no later than two Business Days following
receipt thereof by Westpac or the Servicer (as the case may be).
Calculation of Total Available Funds
On each Collection Determination Date the Trust Manager will, for the
immediately preceding Collection Period, calculate the total of the Available
Income, plus Principal Draws, plus Liquidity Draws (the sum of such amounts, the
"Total Available Funds"), all as further described below.
Available Income
"Available Income" for a Collection Period equals the aggregate of:
(1) Finance Charge Collections;
plus to the extent not included in paragraph (1):
(2) any amount received or due to be received by or on behalf of the
Issuer Trustee with respect to net receipts under any Swap Agreement (other
than the Currency Swaps);
(3) any amount received by or on behalf of the Issuer Trustee under any
Support Facility (other than the Currency Swaps), including under a Mortgage
Insurance Policy, which the Trust Manager determines should be accounted for
to reduce a Finance Charge Loss;
(4) any interest income received by or on behalf of the Issuer Trustee
in respect of moneys credited to the Collections Account in relation to the
Trust;
(5) amounts in the nature of interest otherwise paid by Westpac, the
Servicer or the Trust Manager to the Issuer Trustee in respect of
Collections held by it;
(6) any net amount attributable to income from another WST trust
established under the Master Trust Deed with respect to the substitution of
a Housing Loan ("Substitution Net Transfer Amount (Income)"); and
(7) all other amounts received by or on behalf of the Issuer Trustee in
respect of the Trust assets in the nature of income,
excluding
(8) any interest credited to a Collateral Account for a Support
Facility; and
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(9) any amount received by the Issuer Trustee on entry into a
replacement Currency Swaps which is payable to the prior Currency Swap
Providers.
"Finance Charge Collections" shall equal:
(1) all amounts received by or on behalf of the Issuer Trustee in
respect of interest, fees and other income payable under Housing Loans in
the Mortgage Pool, including:
(i) Liquidation Proceeds received on account of interest;
(ii) any payments by Westpac to the Issuer Trustee on the repurchase of
a Housing Loan which are attributable to interest;
(iii) any interest adjustments received by the Trust in relation to the
transfer of Housing Loans or related Mortgages from the Trust to
another WST trust; and
(iv) the Prepayment Cost Surplus for that Collection Period (if any);
and
(2) all amounts in respect of interest, fees and other amounts in the
nature of income, received by or on behalf of the Issuer Trustee during that
Collection Period including:
(i) from an Approved Seller or the Servicer in respect of any breach of
a representation, warranty or undertaking contained in the Master Trust
Deed, Servicing Agreement or Series Notice;
(ii) from an Approved Seller or the Servicer under any obligation under
the Master Trust Deed, Servicing Agreement or Series Notice to
indemnify or reimburse or pay damages to the Issuer Trustee for any
amount, in each case which are determined by the Trust Manager to be in
respect of interest; and
(3) any amount received in respect of a Housing Loan in the Mortgage
Pool, or a related Mortgage, after a Finance Charge Loss has occurred, which
has not been received under a Mortgage Insurance Policy and which is not
payable to an insurer under a Mortgage Insurance Policy; less
(4) any amount debited in respect of the Housing Loans in the Mortgage
Pool representing government charges collected by or on behalf of the Issuer
Trustee, financial institutions duty, bank accounts debit tax or similar
taxes and fees or charges due to the Servicer or Westpac under the Housing
Loans and the Prepayment Cost Surplus due to Westpac and collected by
Westpac or the Servicer.
With respect to any Housing Loan, a "Finance Charge Loss" means Liquidation
Losses which are attributable to interest, fees and expenses in relation to the
relevant Housing Loan, including on the early discharge of Housing Loans which
bear a fixed rate of interest (other than a Housing Loan subject to an
introductory rate of interest for 12 months or less) the amount, if any, owed by
the relevant Borrower in accordance with the Relevant Documents. With respect to
any Housing Loan, "Liquidation Losses" for a Collection Period, means the amount
(if any) by which the Unpaid Balance of a Housing Loan (together with the
enforcement expenses relating to the Housing Loan and the related Mortgage)
exceeds the Liquidation Proceeds in relation to the Housing Loan. "Liquidation
Proceeds" means all amounts recovered from the enforcement of a Mortgage
(excluding proceeds of a Mortgage Insurance Policy).
With respect to any Housing Loan, a "Prepayment Cost Surplus" means, in
relation to a Collection Period, the amount by which the total of all Prepayment
Costs (as defined below) for that Collection Period exceeds the total of all
Prepayment Benefits (as defined herein) for that Collection Period. With respect
to any Housing Loan, a "Prepayment Benefit Shortfall" means, in relation to a
Collection Period, the amount by which the total of all Prepayment Benefits for
that Collection Period exceeds the total of all Prepayment Costs for that
Collection Period.
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With respect to any Housing Loan which is a Fixed Option Home Loan or
otherwise bears a fixed rate of interest (other than a Housing Loan subject to
an introductory rate of interest for 12 months or less), "Prepayment Cost"
means, on the early discharge of such Housing Loan, the amount (if any) owed by
the relevant Borrower and collected by Westpac or the Servicer, in accordance
with the relevant Housing Loan agreement with respect to such early discharge.
With respect to any Housing Loan which is a Fixed Option Home Loan or otherwise
bears a fixed rate of interest (other than a Housing Loan subject to an
introductory rate of interest for 12 months or less), a "Prepayment Benefit"
means, on the early discharge of such Housing Loan, the amount (if any) credited
to the relevant Borrower's loan account by Westpac by means of a reduction in
the Housing Loan Principal of that Housing Loan, in accordance with the relevant
Housing Loan agreement.
With respect to a Collection Period and any Housing Loan, "Principal Loss"
means the amount of any Liquidation Loss for that Collection Period which is
attributable to principal in relation to the relevant Housing Loan.
Principal Draws
If the Trust Manager determines on any Collection Determination Date that
the Available Income of the Trust for the Collection Period ending immediately
prior to that Collection Determination Date is insufficient to meet Total
Payments (as defined herein under "--Distribution of Total Available Funds") of
the Trust for that Collection Period (a "Payment Shortfall"), then Principal
Collections collected during that Collection Period will be applied to the
Payment Shortfall (a "Principal Draw") to the extent available for this purpose.
Principal Draws will be reimbursed out of any Excess Available Income
available for this purpose on subsequent Payment Dates.
Liquidity Draws
If, on any Collection Determination Date, the Trust Manager determines that
the related Payment Shortfall, if any, will not be covered fully by a Principal
Draw, the Trust Manager must direct the Issuer Trustee to draw on the Liquidity
Facility in an amount equal to the lesser of the remaining Payment Shortfall or
the Available Liquidity Amount. Any direction by the Trust Manager to the Issuer
Trustee to draw on the Liquidity Facility is subject to there being available
funds under the Liquidity Facility.
Remaining Liquidity Shortfall
If the amount available to be drawn under the Liquidity Facility is not
sufficient to satisfy the remaining Payment Shortfall in full, the amount of
such shortfall will be a "Remaining Liquidity Shortfall." If the Trust Manager
determines that a Remaining Liquidity Shortfall exists, then the Trust Manager
must reduce the Interest payable in respect of the Notes as follows:
(1) first, reduce the A$ Class B Interest Amount payable to the
Currency Swap Provider under the swap confirmation relating to the Class B
Notes;
(2) second, if the A$ Class B Interest Amount has been reduced to zero,
any excess Remaining Liquidity Shortfall shall reduce pro rata, based on
their applicable entitlements:
(i) the A$ Class A Interest Amount payable to the Currency Swap
Providers under the swap confirmation relating to the Class A Notes;
(ii) the RFS Interest for all RFSs (if any);
(iii) interest payable for all RFS Class A Notes (if any); and
(iv) any fee payable by the Issuer Trustee under the Redraw Facility.
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If there is a reduction in the A$ Class B Interest Amount under (1) above,
the Interest entitlement of the Class B Noteholders shall be reduced by the same
proportion as the reduction in the A$ Class B Interest Amount. If there is a
reduction in the A$ Class A Interest Amount under (2)(i) above, the Interest
entitlement of the Class A Noteholders shall be reduced by the same proportion
as the reduction in the A$ Class A Interest Amount.
With respect to any Payment Date, the "A$ Class A Interest Amount" means the
amount in A$ which is calculated:
(1) on a daily basis at the applicable rate set out in the swap
confirmation relating to the Class A Notes (being AUD- BBR-BBSW, as defined
in the ISDA Definitions, as at the first day of the Interest Period ending
on (but excluding) that Payment Date with a designated maturity of 90 days
plus the spread set out in the Currency Swaps);
(2) on the A$ Equivalent (with respect to an amount denominated or to
be denominated in U.S. dollars, the amount converted to (and denominated in)
Australian dollars at the applicable exchange rate set forth in the Currency
Swaps) of the aggregate of the Invested Amount of the Class A Notes as at
the first day of the Interest Period ending on (but excluding) that Payment
Date; and
(3) on the basis of the actual number of days in that Interest Period
and a year of 365 days.
With respect to any Payment Date, the "A$ Class B Interest Amount" means,
for any Payment Date, the amount in A$ which is calculated:
(1) on a daily basis at the applicable rate set out in the swap
confirmation relating to the Class B Notes (being AUD- BBR-BBSW, as defined
in the ISDA Definitions, as at the first day of the Interest Period ending
on (but excluding) that Payment Date with a designated maturity of 90 days
plus the spread set forth in the Currency Swaps);
(2) on the A$ Equivalent of the aggregate of the Invested Amount of the
Class B Notes as at the first day of the Interest Period ending on (but
excluding) that Payment Date; and
(3) on the basis of the actual number of days in that Interest Period
and a year of 365 days.
With respect to any Payment Date, "RFS Interest" means all interest on the
outstanding RFSs in respect of an Interest Period. With respect to any Payment
Date, "RFS Class A Interest" means all interest on the outstanding RFS Class A
Notes in respect of an Interest Period.
Distribution of Total Available Funds
General
On each Payment Date, the Trust Manager shall instruct the Issuer Trustee to
apply the Total Available Funds in making the following payments in respect of
the preceding Collection Period in the following order of priority:
(1) in relation to the first Payment Date only, the Accrued Interest
Adjustment;
(2) unpaid or unreimbursed Trust Expenses;
(3) amounts payable under any Support Facility (other than the Currency
Swaps), pari passu, based on their respective entitlements, including:
(i) the net amount (if any) payable by the Issuer Trustee under the
Variable Rate Basis Swap;
(ii) the net amount (if any) payable by the Issuer Trustee under each
Fixed Rate Basis Swap; and
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(iii) any interest or fees payable by the Issuer Trustee under the
Liquidity Facility,
but not including amounts due under paragraph (4), (5) or (6) below;
(4) repayment of any Liquidity Draw made on or prior to the previous
Payment Date;
(5) pari passu, to each of the following, based on their respective
entitlements:
(i) any interest payable on all RFSs (if any);
(ii) the payment to the Currency Swap Providers under the swap
confirmation relating to the Class A Notes of the A$ Class A Interest
Amount at that date;
(iii) the interest payable on all RFS Class A Notes (if any); and
(iv) any fee payable by the Issuer Trustee under the Redraw Facility;
and
(6) the payment to the Currency Swap Providers under the swap
confirmation relating to the Class B Notes of the A$ Class B Interest Amount
as at that date.
The sum of paragraphs (1) to (6) above represents "Total Payments" for a
Collection Period.
The Issuer Trustee shall only make a payment described in paragraphs (1)
through (6) above to the extent that Total Available Funds remain available to
do so after each payment is made in accordance with the above priority in
accordance with the Series Notice.
Trust Expenses
On each Collection Determination Date the Trust Manager will determine the
following payments to be made for the relevant Collection Period (together, the
"Trust Expenses") in the following order of priority (as between themselves) on
the next Payment Date:
(1) taxes payable in relation to the Trust;
(2) the Issuer Trustee Fee;
(3) the Trust Manager Fee;
(4) any fee payable to the Security Trustee under the Security Trust
Deed;
(5) the Servicing Fee;
(6) any fee payable to the Note Trustee under the Note Trust Deed;
(7) any fees payable to the Principal Paying Agent, the Agent Bank and
any other agents under the Agency Agreement;
(8) pari passu based on their respective entitlements any costs,
charges or expenses (other than fees) incurred by, and any liabilities owing
under any indemnity granted to, the Security Trustee, the Servicer, the Note
Trustee and a Paying Agent and any other agents or the Agent Bank in
relation to the Trust under the Transaction Documents, for that Collection
Period; and
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(9) pari passu based on their respective entitlements any other costs,
charges or expenses incurred by the Issuer Trustee or the Trust Manager in
the administration or operation of the Trust.
Calculation of Interest Payable on the Notes
The "Interest Rate" for the Class A Notes for a particular Interest Period
is equal to USD-LIBOR-BBA on the related Interest Determination Date (as defined
herein) plus ____%. The Interest Rate on the Class A Notes for the first
Interest Period will be determined on ________. The "Interest Rate" for the
Class B Notes for a particular Interest Period is equal to USD- LIBOR-BBA on the
related Interest Determination Date plus _____%. The Interest Rate on the Class
B Notes for the first Interest Period will be determined on _________. See
"--Calculation of USD-LIBOR-BBA" below.
With respect to any Payment Date, interest on a Class of Notes will be
calculated as the product of (a) the Invested Amount of such Class as of the
first day of that Interest Period after giving effect to any payments of
principal made with respect to such Class on such day, (b) the Interest Rate for
such Class for that Interest Period; and (c) a fraction, the numerator of which
is the actual number of days in that Interest Period and the denominator of
which is 360 days (such product, "Interest"). No Noteholder will be entitled to
payments of Interest after the related Stated Amount is reduced to zero.
Calculation of USD-LIBOR-BBA
On the second London banking day before the beginning of each Interest
Period (each an "Interest Determination Date"), the Agent Bank will determine
the "USD-LIBOR-BBA" as the applicable Floating Rate Option under the Definitions
of the International Swaps and Derivatives Association, Inc. ("ISDA") (the "ISDA
Definitions") being the rate applicable to any Interest Period for three-month
deposits in U.S. dollars which appears on the Telerate Page 3750 as of 11:00
A.M., London time, on the Interest Determination Date. If such rate does not
appear on the Telerate Page 3750, the rate for that Interest Period will be
determined as if the Issuer Trustee and Agent Bank had specified
"USD-LIBOR-Reference Banks" as the applicable Floating Rate Option under the
ISDA Definitions. "USD-LIBOR-Reference Banks" means that the rate for an
Interest Period will be determined on the basis of the rates at which deposits
in U.S. Dollars are offered by the Reference Banks (being four major banks in
the London interbank market) at approximately 11:00 A.M., London time, on the
Interest Determination Date to prime banks in the London interbank market for a
period of three months commencing on the first day of the Interest Period and in
a Representative Amount (as defined in the ISDA Definitions). The Agent Bank
will request the principal London office of each of the Reference Banks to
provide a quotation of its rate. If at least two such quotations are provided,
the rate for that Interest Period will be the arithmetic mean of the quotations.
If fewer than two quotations are provided as requested, the rate for that
Interest Period will be the arithmetic mean of the rates quoted by major banks
in New York City, selected by the Agent Bank, at approximately 11:00 A.M., New
York City time, on that Interest Determination Date for loans in U.S. dollars to
leading European banks for a period of three months commencing on the first day
of the Interest Period and in a Representative Amount, provided that on the
first day of the first Interest Period USD-LIBOR-BBA shall be an interpolated
rate calculated with reference to the period from (and including) the Closing
Date to (but excluding) the first Payment Date.
Excess Available Income
General
On each Collection Determination Date, the Trust Manager must determine the
amount (if any) by which the Total Available Funds for the Collection Period
ending immediately prior to that Collection Determination Date exceeds the Total
Payments for that same Collection Period (such amount, the "Excess Available
Income").
Distribution of Excess Available Income
On each Collection Determination Date, the Trust Manager must apply such
Excess Available Income for the Collection Period relating to that Collection
Determination Date in the following order of priority:
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(1) to reimburse Principal Charge Offs for that Collection Period;
(2) pari passu and rateably, based on the Stated Amount of the RFSs (if
any), the Stated Amount of the RFS Class A Notes (if any), the Principal
Outstanding under the Redraw Facility and the A$ Equivalent of the Stated
Amount of the Class A Notes:
(i) as a payment to the holders of the RFSs (if any) in or towards
reinstating the Stated Amount of such RFSs, to the extent of any
Carryover RFS Charge Offs;
(ii) as a payment to the holders of the RFS Class A Notes (if any) in
or towards reinstating the Stated Amount of such RFS Class A Notes, to
the extent of any Carryover RFS Class A Charge Offs;
(iii) as a repayment under the Redraw Facility Agreement, as a
reduction of, and to the extent of, any Carryover Redraw Charge Offs;
(iv) as a payment to the Currency Swap Providers under the swap
confirmations relating to the Class A Notes, of the A$ Equivalent of
any Carryover Class A Charge Offs; and
(3) as a payment, denominated in A$, to the Currency Swap Providers
under the swap confirmation relating to the Class B Notes of the A$
Equivalent of any Carryover Class B Charge Offs;
(4) to all Principal Draws which have not been repaid as at that date;
and
(5) as a distribution to any Beneficiaries (an "Excess Collections
Distribution").
All amounts to be paid pursuant to paragraphs (2), (3) and (5) will be paid
on the Payment Date immediately following the Collection Determination Date.
Once distributed to a Beneficiary, an Excess Collections Distribution will
not be available to the Issuer Trustee to meet its obligations in respect of the
Trust in subsequent periods unless there has been an error in the relevant
calculation of the Excess Collections Distribution. A "Beneficiary" is any party
which holds a residual income unit in the Trust. The Issuer Trustee does not
intend and is not permitted to accumulate any surpluses.
Gross Principal Collections
On each Collection Determination Date, the Trust Manager must determine
Gross Principal Collections for the Collection Period ending immediately prior
to that Collection Determination Date. With respect to any Collection
Determination Date, "Gross Principal Collections" are the sum of:
(1) all amounts received by or on behalf of the Issuer Trustee from or
on behalf of Borrowers under or in respect of the Housing Loans during the
Collection Period in respect of principal, including principal prepayments;
(2) all other amounts received under or in respect of the Housing Loans
during the Collection Period in respect of principal, including:
(i) Liquidation Proceeds received on account of principal;
(ii) any payments by Westpac to the Issuer Trustee on the repurchase of
a Housing Loan in respect of principal;
(iii) any amounts in the nature of principal received by or on behalf
of the Issuer Trustee from the sale of any Trust Asset, including any
amount received on the issue of Notes and which was not used to
purchase a Housing Loan or Mortgage and which the Trust Manager
determines is surplus to the requirements of the Trust;
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(iv) any Prepayment Costs applied towards Prepayment Benefit; and
(v) any Prepayment Benefit Shortfall paid by Westpac to the Trust;
(3) all amounts received by or on behalf of the Issuer Trustee during
that Collection Period under any Support Facility (other than the Currency
Swaps) which the Trust Manager determines should be accounted for to reduce
a Principal Loss;
(4) all amounts received by or on behalf of the Issuer Trustee during
that Collection Period:
(i) from an Approved Seller or the Servicer in respect of any breach of
a representation, warranty or undertaking contained in the Master Trust
Deed, Series Notice or Servicing Agreement determined by the Trust
Manager to be in respect of principal; and
(ii) from an Approved Seller or the Servicer under any obligation under
the Master Trust Deed, Series Notice or Servicing Agreement to
indemnify, reimburse or pay damages to the Issuer Trustee for any
amount determined by the Trust Manager to be in respect of principal;
(5) any amount of Excess Available Income to be applied to meet a
Principal Charge Off or a Carryover Charge Off;
(6) any amount received by or on behalf of the Issuer Trustee during
that Collection Period as proceeds from the issue of any RFS to the extent
not applied to reimburse amounts drawn under the Redraw Facility;
(7) any Excess Available Income to be applied to Principal Draws made
on a previous Payment Date;
(8) any Prepayment Calculation Adjustment for that Collection Period;
and
(9) any net amount attributable to principal received by the Trust from
another trust established under the Master Trust Deed with respect to any
substitution of a Housing Loan during that Collection Period ("Substitution
Net Transfer Amount (Principal)");
(10) any amounts remaining on deposit in the Collection Account on the
previous Payment Date (after all distributions from the Collection Account
for such Payment Date have been made).
but excluding a premium receivable by the Issuer Trustee on entry into a
replacement Currency Swaps.
On the Closing Date, the A$ Equivalent of the total Initial Invested Amount
of the Notes issued by the Issuer Trustee may exceed the Housing Loan Principal
as of the Cut-Off Date. The amount of this difference, if any, will be treated
as a Gross Principal Collection and the US$ Equivalent will be passed through to
Noteholders on the first Payment Date.
With respect to any Collection Period and a Housing Loan, a "Prepayment
Calculation Adjustment" is any amount credited to the related Borrower by
Westpac to reflect an interest adjustment resulting from a change in computer
systems.
Principal Collections
On each Collection Determination Date the Trust Manager must calculate
Principal Collections for the preceding Collection Period. With respect to any
Collection Determination Date, "Principal Collections" shall be equal to:
(1) the Gross Principal Collections for that Collection Period; less
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(2) any amounts deducted by or paid to Westpac to reimburse Redraws
funded by Westpac during that Collection Period for which Westpac has not
been reimbursed previously.
Distribution of Principal Collections
Initial Principal Distributions
On each Payment Date, Principal Collections will be distributed in the
following order of priority:
(1) to repay any Redraws provided by Westpac to the extent not
previously reimbursed;
(2) to repay any Principal Outstanding under the Redraw Facility;
(3) to allocate to Total Available Funds any Principal Draw; and
(4) to repay all amounts outstanding under each RFS Series (if any), in
chronological order of issue, until repaid in full,
(together, "Initial Principal Distributions").
Only after Initial Principal Distributions have been distributed will
Principal Collections be available to be paid to the Currency Swap Providers to
enable the Issuer Trustee to make payments to the Class A Noteholders and the
Class B Noteholders in US$ in accordance with the appropriate principal
allocation methodology set forth below. With respect to any Payment Date, "Net
Principal Collections" shall equal the amount of Principal Collections remaining
after the distribution of Initial Principal Distributions.
Payments of Principal on the Notes
With respect to any Collection Determination Date, the Trust Manager shall
determine the appropriate principal allocation methodology as set forth below.
On each Payment Date on which principal payments on the Notes are to be made,
the Trust Manager shall instruct the Issuer Trustee to pay principal to the
Noteholders in the manner and subject to the priority set forth below.
Serial Method 1
If, on the related Collection Determination Date, the Serial Method 1
Distribution Test has been met, then the Issuer Trustee will pay out of any Net
Principal Collections, on the immediately following Payment Date the following
amounts in the following order of priority:
(1) first, pari passu and rateably, based on their respective
entitlements:
(i) as a payment, denominated in A$, to the Currency Swap Providers
under the swap confirmations relating to the Class A Notes of an amount
equal to the lesser of:
(a) the Class A Forex Percentage of the sum of: (1) the Class A
Percentage of Net Principal Collections; and (2) 50% of the Class B
Percentage of Net Principal Collections; and
(b) the A$ Equivalent of the Class A Stated Amounts for all Class
A Notes; and
(ii) as a payment denominated in A$ to the holders of the RFS Class A
Notes (if any) of an amount equal to the lesser of:
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(a) the RFS Class A Forex Percentage of the sum of: (1) the Class
A Percentage of Net Principal Collections; and (2) 50% of the Class B
Percentage of Net Principal Collections; and
(b) the RFS Class A Stated Amounts for all RFS Class A Notes (if
any); and
(2) second, as a payment, denominated in A$, to the Currency Swap
Providers under the swap confirmations relating to the Class B Notes of an
amount equal to 50% of the Class B Percentage of Net Principal Collections.
The "Serial Method 1 Distribution Test" is met if, on any Collection
Determination Date the following conditions are all satisfied:
(i) the Subordinated Percentage at the previous Collection
Determination Date was greater than or equal to twice the Initial
Subordinated Percentage;
(ii) that Collection Determination Date occurs on or before
______________;
(iii) the fraction, expressed as a percentage, the numerator of which
is the Total Invested Amount on such Collection Determination Date and
the denominator of which is the Total Initial Invested Amount, is
greater than or equal to 10%; and
(iv) the Average Quarterly Percentage on such Collection Determination
Date:
(a) does not exceed 2% and the Total Carryover Charge Off on that
Collection Determination Date does not exceed 30% of the Class B
Initial Invested Amount; or
(b) does not exceed 4% and the Total Carryover Charge Off on such
Collection Determination Date does not exceed 10% of the Class B
Initial Invested Amount; and
(v) the Stated Amount of the Class B Notes on such Collection
Determination Date exceeds 0.25% of the sum of the Class A Initial
Invested Amount and the Class B Initial Invested Amount.
Serial Method 2
If, on the related Collection Determination Date, the Serial Method 2
Distribution Test has been met, then the Issuer Trustee will pay out of any Net
Principal Collections, on the immediately following Payment Date the following
amounts in the following order of priority:
(1) first, pari passu and rateably, based on their respective
entitlements:
(i) as a payment, denominated in A$, to the Currency Swap Providers
under the swap confirmations relating to the Class A Notes of an amount
equal to the lesser of:
(a) the Class A Forex Percentage of the Class A Percentage of Net
Principal Collections; and
(b) the A$ Equivalent of the Class A Stated Amounts for all Class
A Notes; and
(ii) as a payment denominated in A$ to the holders of the RFS Class A
Notes (if any) of an amount equal to the lesser of:
(a) the RFS Class A Forex Percentage of the Class A Percentage of
Net Principal Collections; and
(b) the RFS Class A Stated Amounts for all RFS Class A Notes (if
any); and
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(2) second, as a payment, denominated in A$, to the Currency Swap
Providers under the swap confirmations relating to the Class B Notes of an
amount equal to the Class B Percentage of Net Principal Collections.
The "Serial Method 2 Distribution Test" is met if, on any Collection
Determination Date the following conditions are all satisfied:
(i) the Subordinated Percentage at the previous Collection
Determination Date was greater than or equal to twice the Initial
Subordinated Percentage;
(ii) that Collection Determination Date occurs after _______________;
(iii) the fraction, expressed as a percentage, the numerator of which
is the Total Invested Amount on such Collection Determination Date and
the denominator of which is the Total Initial Invested Amount, is
greater than or equal to 10%;
(iv) the Average Quarterly Percentage as at the Collection
Determination Date:
(a) does not exceed 2% and the Total Carryover Charge Off on that
Collection Determination Date does not exceed 30% of the Class B
Initial Invested Amount; or
(b) does not exceed 4% and the Total Carryover Charge Off on that
Collection Determination Date does not exceed 10% of the Class B
Initial Invested Amount; and
(v) the Stated Amount of the Class B Notes on such Collection
Determination Date exceeds 0.25% of the sum of (x) the Class A Initial
Invested Amount, (y) the Class B Initial Invested Amount and (z) the
US$ Equivalent of the Invested Amounts of all RFS Class A Notes (if
any).
Sequential Method
If neither the Serial Method 1 Distribution Test nor the Serial Method 2
Distribution Test has been met, then the Issuer Trustee will pay out of any Net
Principal Collections, on the immediately following Payment Date the following
amounts in the following order of priority:
(1) first, pari passu and rateably, based on their respective
entitlements:
(i) as a payment, denominated in A$, to the Currency Swap Providers
under the swap confirmations relating to the Class A Notes of an amount
equal to the lesser of:
(a) the Class A Forex Percentage of the Net Principal Collections;
and
(b) the A$ Equivalent of the Class A Stated Amounts for all Class
A Notes; and
(ii) as a payment denominated in A$ to the holders of the RFS Class A
Notes (if any) of an amount equal to the lesser of:
(a) the RFS Class A Forex Percentage of the Net Principal
Collections; and
(b) the RFS Class A Stated Amounts for all RFS Class A Notes (if
any); and
(2) second, as a payment, denominated in A$, to the Currency Swap
Providers under the swap confirmations relating to the Class B Notes of an
amount equal to the lesser of (i) the amount remaining after all
distributions in (1) above and (ii) the A$ Equivalent of the Class B Stated
Amounts for all Class B Notes.
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Certain Related Definitions
With respect to any date, the "Average Quarterly Percentage" is the sum
of the Quarterly Percentages for the four full Quarters preceding that date,
divided by four. With respect to any Collection Period, the "Quarterly
Percentage" equals a fraction, expressed as a percentage, the numerator of
which is the aggregate Housing Loan Principal of all Housing Loans which are
Delinquent for more than 60 consecutive days as of the close of business on
the last day of that Collection Period, and the denominator of which is the
aggregate Housing Loan Principal of all Housing Loans as of the close of
business on the last day of that Collection Period. With respect to any
Housing Loan and date, "Housing Loan Principal" shall be the unpaid principal
amount of that Housing Loan on such date.
The "Class A Forex Percentage" equals a fraction, expressed as a
percentage, the numerator of which is the A$ Equivalent of the Class A Stated
Amounts at that date and the denominator of which is the sum of the A$
Equivalent of the Class A Stated Amounts and the RFS Class A Stated Amounts
at that date.
The "Class A Percentage" means, on a Collection Determination Date, the
sum of the aggregate of the A$ Equivalent of the Class A Stated Amounts, the
RFS Class A Stated Amounts and the Redraw Limit (as defined herein) for the
preceding Collection Determination Date as a percentage of the sum of the
aggregate of the A$ Equivalent of the Class A Stated Amounts, the RFS Class A
Stated Amounts, the A$ Equivalent of the Class B Stated Amounts and the
Redraw Limit calculated as at the preceding Collection Determination Date.
The "Class B Percentage" means, on a Collection Determination Date, the
aggregate of the A$ Equivalent of the Class B Stated Amounts for the
preceding Collection Determination Date as a percentage of the sum of the
aggregate A$ Equivalent of the Class A Stated Amounts, the RFS Class A Stated
Amounts, the A$ Equivalent of the Class B Stated Amounts and the Redraw Limit
calculated as at the preceding Collection Determination Date.
The "Initial Subordinated Percentage" shall be ____%.
With respect to any date, the "RFS Class A Forex Percentage" shall be
100% minus the Class A Forex Percentage as of that date.
The "Subordinated Percentage" means the fraction, expressed as a
percentage, calculated on each Collection Determination Date by the Trust
Manager, the numerator of which is the A$ Equivalent of the aggregate of the
Class B Stated Amounts and the denominator of which is the sum of (i) the A$
Equivalent of the aggregate of the Class A Stated Amounts and the Class B
Stated Amounts at that time, (ii) the Redraw Limit at that time, (iii) the
aggregate of the RFS Stated Amounts at that time, and (iv) the aggregate of
the RFS Class A Stated Amounts at that time.
Application of Principal Charge Offs
General
If there is any Liquidation Loss under a Housing Loan, the Trust Manager
will direct the Servicer to make a claim under the relevant Mortgage
Insurance Policy for the aggregate amount of that Liquidation Loss if the
Servicer has not already done so. If a claim on account of a Principal Loss
may not be made (or is reduced) under the Mortgage Insurance Policy for any
reason (including because the maximum amount available under the Mortgage
Pool Insurance Policy has been exhausted, the Mortgage Insurance Policy has
been terminated in respect of that Housing Loan, the Mortgage Insurer is
entitled to reduce the amount of the claim or the Mortgage Insurer defaults
in payment of a claim) then a "Mortgage Shortfall" will arise if:
(1) the total amount recovered and recoverable under the Mortgage
Insurance Policy attributable to principal; plus
(2) any damages or other amounts payable by an Approved Seller or the
Servicer under or in respect of the Master Trust Deed, the Series Notice or
Servicing Agreement relating to the Housing Loan which the Trust Manager
determines to be on account of principal, is insufficient to meet the full
amount of the Principal Loss. In that case,
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the aggregate amount of all Mortgage Shortfalls for that Collection Period
(a "Principal Charge Off") will be applied to reduce the Stated Amounts of
the Notes as described below.
Charge Offs
On any Collection Determination Date, the Excess Available Income (if
any) will be applied to meet Principal Charge Offs calculated on that
Collection Determination Date for the Collection Period ending immediately
prior to that Collection Determination Date. If the amount of Excess
Available Income is less than the amount of those Principal Charge Offs, then
the balance of the Principal Charge Offs will be:
(1) applied to reduce the Stated Amounts of the Class B Notes by the
US$ Equivalent of that balance (a "Class B Charge Off"), until the Class B
Stated Amount is zero; and
(2) to the extent that balance cannot be applied under paragraph
(1) because the Class B Stated Amount is zero, applied pari passu and
rateably, based on their respective Stated Amounts or Principal
Outstanding, as applicable, to the reduction of the RFSs (if any) (an "RFS
Charge Off"), the RFS Class A Notes (if any) (an "RFS Class A Charge Off")
and the Class A Notes (a "Class A Charge Off") until the respective Stated
Amounts of the Class A Notes, the RFSs (if any) and the RFS Class A Notes
(if any) are zero and the Principal Outstanding under the Redraw Facility
until the Principal Outstanding is zero (a "Redraw Facility Charge Off")
(using A$ Equivalent amounts in the case of the Class A Notes).
With respect to any date, the "Total Carryover Charge Off" means the sum
of:
(1) all Carryover Class A Charge Offs for all Class A Notes
(other than RFS Class A Notes) as at that date;
(2) all Carryover Class B Charge Offs for all Class B Notes as at
that date;
(3) the US$ Equivalent of all Carryover RFS Charge Offs for all
RFSs as at that date; and
(4) the US$ Equivalent of all Carryover RFS Class A Charge Offs
for all RFS Class A Charge Offs as at that date.
Reimbursement of Charge Offs
On any Collection Determination Date, if there is Excess Available
Income in respect of the Collection Period ending immediately prior to that
Collection Determination Date remaining after the reimbursement of any
Principal Charge Offs for that Collection Period, then the remaining Excess
Available Income will be used to reinstate the Stated Amounts of the Notes in
the following priority:
(1) first, the Carryover Redraw Charge Offs, Carryover RFS Charge
Offs, Carryover RFS Class A Charge Offs and Carryover Class A Charge Offs,
pari passu and rateably based on the amount of their respective Charge Offs
(using A$ Equivalent amounts in the case of Carryover Class A Charge Offs);
and
(2) second, the A$ Equivalent of any Carryover Class B Charge Offs.
On any Collection Determination Date in relation to a Class A Note,
"Carryover Class A Charge Offs" means the aggregate of Class A Charge Offs in
relation to that Class A Note prior to that Collection Determination Date
which have not been reinstated as provided for herein. On any Collection
Determination Date in relation to a Class B Note, "Carryover Class B Charge
Offs" means on any Collection Determination Date in relation to a Class B
Note, the aggregate of Class B Charge Offs in relation to that Class B Note
prior to that Collection Determination Date which have not been reinstated as
provided for herein. On any Collection Determination Date in relation to the
Redraw Facility, "Carryover Redraw Charge Offs" means, the aggregate of
Redraw Charge Offs prior to that Collection Determination Date which have not
been reinstated as provided for herein. On any Collection Determination Date
in relation to the
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RFSs, the aggregate of RFS Charge Offs in relation to that RFS prior to that
Collection Determination Date which have not been reinstated as provided for
herein. On any Collection Determination Date in relation to an RFS Class A
Note, "Carryover RFS Class A Charge Offs" means the aggregate of RFS Class A
Charge Offs in relation to that RFS Class A Note prior to that Collection
Determination Date which have not been reinstated as provided for herein.
Payments into US$ Account
The Principal Paying Agent shall open and maintain, or cause to be
opened and maintained, an account (the "US$ Account") into which the Currency
Swap Providers shall deposit amounts denominated in US$.
(1) The Issuer Trustee shall direct the Currency Swap Providers to pay
all amounts denominated in US$ payable to the Issuer Trustee by the
Currency Swap Providers under the Currency Swaps into the US$ Account or to
the Principal Paying Agent under the Agency Agreement on behalf of the
Issuer Trustee.
(2) If any of the Issuer Trustee, the Trust Manager or the Servicer
receives any amount denominated in US$ from the Currency Swap Providers
under the Currency Swaps they will promptly pay that amount to the credit
of the US$ Account.
Payments out of US$ Account
The Issuer Trustee shall, or shall require that the Paying Agents shall
on its behalf, pay all amounts credited to the US$ Account or otherwise
referred to above to meet its US$ obligations under the Series Notice and the
Notes, and in accordance with the Note Trust Deed and the Agency Agreement.
Prepayment Costs and Prepayment Benefits
(1) On each Collection Determination Date the Trust Manager will
determine total Prepayment Benefits and total Prepayment Costs for the
relevant Collection Period and will apply an amount equal to those total
Prepayment Costs in payment of those total Prepayment Benefits. If:
(i) there is a Prepayment Cost Surplus, it will be applied under
paragraph (2) below; and
(ii) there is a Prepayment Benefit Shortfall, it will be funded under
paragraph (3) below.
(2) On each Payment Date, based on calculations provided to it by the
Trust Manager, the Issuer Trustee will pay to Westpac an amount equal to the
Prepayment Cost Surplus (if any) for the Collection Period on that Payment
Date to the extent received by or on behalf of the Issuer Trustee.
(3) If, on any Collection Determination Date, the Trust Manager
calculates that there is a Prepayment Benefit Shortfall, the Trust Manager
must by the close of business on that Collection Determination Date notify
Westpac of the amount of that Prepayment Benefit Shortfall. Westpac must, by
4:00 p.m. (Sydney time) on the Remittance Date, deposit in the Collections
Account for the credit of the Issuer Trustee an amount equal to that
Prepayment Benefit Shortfall. That amount will be treated as a Gross
Principal Collection.
Description of the Redraw Facility, the Redraw Funding Securities and the RFS
Class A Notes
Certain Housing Loans in the Mortgage Pool which are charged a variable
rate of interest have a feature which allows the borrower to draw on
repayments made by the Borrower in excess of scheduled repayments on the
related Housing Loan (any such draw, a "Redraw"). Under a Redraw, Borrowers
may require Westpac to re-advance to them previously prepaid principal. In
certain circumstances, Westpac has a contractual obligation under the related
loan document to provide the Redraw if the Borrower has made prepayments on
the related Housing Loan and such Borrower is not delinquent. A Redraw will
not result in the Housing Loan being removed from the Mortgage Pool.
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Westpac is entitled to be reimbursed by the Issuer Trustee for Redraws
funded by Westpac first, from Gross Principal Collections as described under
"--Principal Collections" herein, second, from drawings under the Redraw
Facility and third, from the proceeds of the issuance of RFSs, to the extent
each is available.
If Westpac is not fully reimbursed in relation to a Redraw, it will bear
the cost of funding that Redraw until such time as it can be reimbursed by
the Issuer Trustee.
Redraw Facility
General
On or prior to the Closing Date, Westpac will enter into a Redraw
Facility Agreement (the "Redraw Facility Agreement") in its capacity as
"Redraw Facility Provider" with the Issuer Trustee and the Trust Manager.
Pursuant to the terms of the Redraw Facility Agreement, the Redraw Facility
Provider shall be obligated, subject to the limitations set forth below, to
fund the amount of any Redraws not funded with Gross Principal Collections.
To the extent that Gross Principal Collections are insufficient to fund
Redraws (a "Redraw Shortfall") and amounts are available under the Redraw
Facility, the Trust Manager must direct the Issuer Trustee to draw on the
Redraw Facility. Under the Redraw Facility, the Redraw Facility Provider
agrees to make advances to the Issuer Trustee up to the limit from time to
time (the "Redraw Limit") or any lesser amount as agreed between the Redraw
Facility Provider, the Issuer Trustee and the Trust Manager. At the Closing
Date, the Redraw Limit is expected to be A$_____________. The Redraw Limit
may not be increased without written confirmation from the Rating Agencies
that the increase would not result in a downgrading or withdrawal of the
rating for the Offered Notes then outstanding.
The Redraw Facility Provider may revoke the Redraw Facility at any time
immediately on giving notice to the Issuer Trustee and the Trust Manager.
Drawings
In the event of a Redraw Shortfall on any Collection Determination Date,
the Trust Manager must direct the Issuer Trustee to draw down on the Redraw
Facility for an amount (a "Redraw Advance") equal to the lesser of the Redraw
Shortfall and the Available Redraw Amount (as defined herein). A drawing may
only be made under the Redraw Facility on account of a Redraw Shortfall.
"Available Redraw Amount" means at any time the greater of: (a) the
Redraw Limit at such time less (i) the Principal Outstanding at that time;
and (ii) the Carryover Redraw Charge Offs at that time; and (b) zero. The sum
of all Redraw Advances outstanding on any particular date less the Carryover
Redraw Charge Offs at that time shall be the "Principal Outstanding."
A drawing may only be made by the Issuer Trustee delivering to the
Redraw Facility Provider a duly completed drawdown notice signed by the
Issuer Trustee; provided, however, that each of the following conditions
precedent to drawing are met.
Conditions Precedent to Drawing
The obligations of the Redraw Facility Provider to make available each
Redraw Advance are subject to the conditions precedent that:
(1) no event of default has occurred and is continuing under the Redraw
Facility at the date of the relevant drawdown notice and the relevant
drawdown date or will result from the provision of the Redraw Advance; and
(2) the representations and warranties by the Issuer Trustee in the
Redraw Facility are true as at the date of the relevant drawdown notice and
the relevant drawdown date as though they had been made at that date in
respect of the facts and circumstances then subsisting.
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Draw Fee
With respect to any Redraw Advance made by the Redraw Facility Provider,
a fee (the "Draw Fee") will accrue from day to day on the amount of each such
Redraw Advance from the date of its advance at a rate equal to the Bank Bill
Rate plus a margin (which varies depending on how long the Redraw Advance is
outstanding), calculated on the basis of the actual number of days elapsed
since the advance and a year of 365 days. The Draw Fee shall be payable on
each Payment Date and on termination of the Redraw Facility. To the extent
any Draw Fee is not paid, the amount of such unpaid Draw Fee will be
capitalized and interest will accrue on any such unpaid Draw Fee. On any
date, the "Bank Bill Rate" shall be the rate calculated by taking the rates
quoted on the Reuters Screen BBSW Page at approximately 10:00 am, Sydney
time, on that date for each Reference Bank so quoting (but not fewer than
five) as being the mean buying and selling rate for a bill (which for the
purpose of this definition means a bill of exchange of the type specified for
the purpose of quoting on the Reuters Screen BBSW Page) having a tenor of 90
days eliminating the highest and lowest mean rates and taking the average of
the remaining mean rates and then (if necessary) rounding the resultant
figure upwards to four decimal places. If on any date fewer than five
Reference Banks have quoted rates on the Reuters Screen BBSW Page, the rate
for that date shall be calculated as above by taking the rates otherwise
quoted by five of the Reference Banks on application by the parties for such
a bill of the same tenor. If in respect of any date the rate for that date
cannot be determined in accordance with the foregoing procedures then the
rate for that date shall mean such rate as is agreed between the Trust
Manager and Westpac having regard to comparable indices then available,
provided that on the first day of any first Interest Period as it relates to
a Class of Notes the Bank Bill Rate shall be an interpolated rate calculated
with reference to the tenor of the relevant period.
Availability Fee
For so long as the Redraw Facility exists, a fee (the "Availability
Fee") shall accrue daily from the date of the Redraw Facility on the
Available Redraw Amount, which Availability Fee is payable on each Payment
Date and on termination of the Redraw Facility. The Availability Fee is
calculated on the actual number of days elapsed and a year of 365 days.
Repayment of Redraw Advances
To the extent a Redraw Advance has been made and has not been repaid to
the Redraw Facility Provider, the amount of such unreimbursed Redraw Advance
is repayable on the following Payment Date and on the date of termination of
the Redraw Facility, to the extent that there are funds available for such
payment. It is not an event of default if the Issuer Trustee does not have
funds available to repay the full amount of the unreimbursed Redraw Advance
on the following Payment Date.
Events of Default under the Redraw Facility
It is an event of default under the Redraw Facility (whether or not such
event is within the control of the Issuer Trustee) if:
(1) an amount is available for payment to the Redraw Facility Provider
under the Redraw Facility, and the Issuer Trustee does not pay that amount
within 10 Business Days of its due date;
(2) an Insolvency Event occurs in relation to the Trust;
(3) an Insolvency Event occurs in relation to the Issuer Trustee, and
a successor trustee of the Trust is not appointed within 30 days of that
Insolvency Event;
(4) the Termination Date occurs in relation to the Trust; or
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(5) an event of default (as defined in the Security Trust Deed) occurs
and any action is taken to enforce the security interest under the Security
Trust Deed over the assets of the Trust (including appointing a receiver or
receiver and manager or selling any of those assets).
With respect to the Issuer Trustee (in its personal capacity and as
trustee of a Trust), the Trust Manager, the Servicer, Westpac or a Mortgage
Insurer (each a "relevant corporation"), an "Insolvency Event" will occur
upon the happening of any of the following events:
(1) an administrator of the relevant corporation is appointed;
(2) except for the purpose of a solvent reconstruction or
amalgamation:
(i) an application or an order is made, proceedings are
commenced, a resolution is passed or proposed in a notice of
proceedings or an application to a court or other steps (other than
frivolous or vexatious applications, proceedings, notices and steps)
are taken for:
(a) the winding up, dissolution or administration of the
relevant corporation; or
(b) the relevant corporation to enter into an arrangement,
compromise or composition with or assignment for the benefit of
its creditors or a class of them; or
(ii) the relevant corporation ceases, suspends or threatens to
cease or suspend the conduct of all or substantially all of its
business or disposes of or threatens to dispose of substantially all
of its assets; or
(3) the relevant corporation is, or under applicable legislation is
taken to be, unable to pay its debts (other than as the result of a failure
to pay a debt or claim the subject of a good faith dispute) or stops or
suspends or threatens to stop or suspend payment of all or a class of its
debts (except, in the case of the Issuer Trustee where this occurs in
relation to another trust of which it is the trustee);
(4) a receiver, receiver and manager or administrator is appointed (by
the relevant corporation or by any other person) to all or substantially
all of the assets and undertaking of the relevant corporation or any part
thereof (except, in the case of the Issuer Trustee where this occurs in
relation to another trust of which it is the trustee); or
(5) anything analogous to an event referred to in paragraphs (1) to
(4) (inclusive) or having substantially similar effect, occurs with respect
to the relevant corporation.
The "Termination Date" with respect to the Trust shall be the earlier to
occur of:
(1) the date which is 80 years after the date of creation of the
Trust;
(2) the termination of the Trust under statute or general law;
(3) full and final enforcement by the Security Trustee of its rights
under the Security Trust Deed after the occurrence of an Event of Default;
or
(4) at any time after all creditors of the Trust have been repaid in
full and the Issuer Trustee and the Trust Manager agree that no further
Notes are proposed to be issued by the Issuer Trustee in relation to the
Trust, the Business Day immediately following that date.
Consequences of Occurrence of Events of Default
At any time after an event of default (whether or not it is continuing)
the Redraw Facility Provider may do all or any of the following:
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(1) by notice to the Issuer Trustee and the Trust Manager declare all
moneys actually or contingently owing under the Redraw Facility immediately
due and payable, and the Issuer Trustee must immediately pay the Principal
Outstanding together with accrued interest and fees and all such other
moneys; and
(2) by notice to the Issuer Trustee and the Trust Manager cancel the
Redraw Limit with effect from any date specified in that notice.
Termination of the Redraw Facility
The Redraw Facility will terminate on the earliest of the following:
(1) the date on which the Issuer Trustee enters into a replacement
Redraw Facility;
(2) one month after the Class A Notes, the Class B Notes, the RFSs and
the Class A RFS Notes have been redeemed in full in accordance with the
Master Trust Deed and the Series Notice;
(3) following an event of default under the Redraw Facility, the date
on which the Redraw Facility Provider declares the Redraw Facility
terminated;
(4) the date on which the Issuer Trustee has cancelled the Redraw
Limit in full. The Issuer Trustee may cancel all or part of the Redraw
Limit on not less than five Business Days irrevocable notice to the Redraw
Facility Provider;
(5) the date which is one year after the Maturity Date;
(6) the date on which the Redraw Limit is cancelled in full by the
Redraw Facility Provider; or
(7) the date on which Westpac Securitisation Management Pty Limited
retires or is removed as Trust Manager under the Master Trust Deed.
The Redraw Limit may be also be reduced in part by the Redraw Facility
Provider by giving notice to the Issuer Trustee and the Trust Manager. Such a
reduction will not result in a termination of the Redraw Facility.
Issuance of Redraw Funding Securities ("RFS")
If on a Collection Determination Date:
(1) Gross Principal Collections for the Collection Period preceding
that Collection Determination Date and all amounts available to be drawn
under the Redraw Facility are insufficient to fund Redraws made during that
Collection Period; or
(2) the Principal Outstanding under the Redraw Facility divided by the
Redraw Limit, expressed as a percentage, is equal to or greater than 90% of
the Redraw Limit;
then the Trust Manager may give the Issuer Trustee a direction to issue
a series of RFSs (the "RFS Series").
Condition Precedent to the Issue of RFSs
Notwithstanding the requirements referred to above, before giving a
direction for the issue of an RFS Series the Trust Manager must confirm with
the Rating Agencies that the issue will not result in the downgrading or
withdrawal of the rating of any Offered Note.
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RFS Class A Notes
If, on the fifth Collection Determination Date following the date on
which an RFS Series was issued, the RFS Stated Amount for all RFSs in that
RFS Series has not been reduced to zero, each of those outstanding RFSs will
convert to an "RFS Class A Note." Such RFS Class A Note will:
(1) have an Initial Invested Amount equal to the RFS Initial Invested
Amount of the converted RFS;
(2) have an Invested Amount equal to the RFS Invested Amount of that
Note when it was an RFS at the date of conversion;
(3) have a Stated Amount equal to the RFS Stated Amount of the RFS at
the date of conversion;
(4) be denominated in Australian dollars;
(5) receive all payments of principal and interest denominated in
Australian dollars;
(6) have an Interest Rate calculated by reference to the Bank Bill
Rate, not "USD-LIBOR-BBA";
(7) be evidenced by a notation in a register maintained by the Issuer
Trustee; and
(8) have a Margin equal to the margin under the Class A Notes.
"Margin" means: (1) in the case of Class A Notes, _____% and in the case
of the Class B Notes, _____%; (2) in the case of any RFSs, the margin
inscribed in the register maintained by the Issuer Trustee in relation to
those RFSs on their issue date; and (3) in the case of any RFS Class A Note,
the Margin for the Class A Notes plus the spread under the Currency Swaps.
Form of the RFSs and the RFS Class A Notes
The RFSs and the RFS Class A Notes will be evidenced by a notation in a
register maintained by the Issuer Trustee, denominated in Australian dollars
and will be issued in Australia to Australian resident investors only. The
total issue amount of RFS Class A Notes (if any) will be determined by the
amount of RFSs (if any) issued during the term of the Offered Notes. The RFSs
and RFS Class A Notes are not offered hereby.
Interest Payable on the RFSs and the RFS Class A Notes
Commencing on the issue date of an RFS or the conversion date of an RFS
Class A Note, Interest is payable monthly in arrears on each RFS and RFS
Class A Note to the person whose name is registered under the Master Trust
Deed and the Series Notice as the holder of the RFS or RFS Class A Note,
until the Maturity Date or until the Stated Amount of the RFS or RFS Class A
Note is reduced to zero (whichever is earlier). "Interest", with respect to
an RFS or an RFS Class A Note, shall be equal to the interest accrued on the
Invested Amount for such RFS or RFS Class A Note at a rate equal to the Bank
Bill Rate on the first day of that Interest Period plus the Margin for the
RFS or RFS Class A Note, during the period from the subsequent Payment Date
to the day preceding the Payment Date, calculated on the actual number of
days in the related Interest Period over 365.
Payments to the holders of RFSs and the holders of RFS Class A Notes
will be in Australian dollars. Payments of Interest on the RFSs and the RFS
Class A Notes are pari passu with respect to Interest payable on the Class A
Notes and rank ahead of Interest payable on the Class B Notes.
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Subordination of Class B Notes; Priority of Payment of Principal to RFSs
The Class A Noteholders, the holders of RFSs (if any), the holders of
RFS Class A Notes (if any) and the Redraw Facility Provider will have the
benefit of the subordination of the Class B Notes. That is, to the extent
that there is a loss on a Housing Loan which is not satisfied by a claim (or
deemed claim) under a Mortgage Insurance Policy, by amounts recoverable by
the Issuer Trustee from an Approved Seller or the Servicer, or by the
application of Excess Available Income, the amount of that loss will be
allocated to the Class B Notes, reducing the Stated Amount of the Class B
Notes until their Stated Amount is zero. The amount of any remaining loss
will then be allocated pari passu, between the Class A Notes, the RFSs (if
any), the RFS Class A Notes (if any) and the Redraw Facility, reducing the
Stated Amount of the Class A Notes, the RFSs (if any) and the RFS Class A
Notes (if any) until their Stated Amount is zero and reducing the Principal
Outstanding under the Redraw Facility until it is zero. For further details
see "--Application of Principal Charge Offs" above. Payments of principal on
the RFSs will be made prior to payments of principal to the Offered
Noteholders and the holders of the RFS Class A Notes.
Substitution of Housing Loans
The Trust Manager may substitute a housing loan from a WST warehouse
trust for a Housing Loan in the Trust. For a housing loan in a WST trust to
be eligible for substitution for a Housing Loan, the housing loan in the
other WST trust must have a maturity date not later than the date which is
one year before the Maturity Date of the Notes, have similar product features
to one or more of the Housing Loans, have an Unpaid Balance within A$30,000
of the Unpaid Balance of the Housing Loan for which it is being substituted
and must otherwise be suitable for substitution in the Trust Manager's sole
and absolute discretion. The Trust Manager may take into account the
geographic location of the properties securing the Housing Loan and the
substituted housing loan. In addition, the Unpaid Balance of all housing
loans acquired by the Trust must be less than the Unpaid Balance of the
Housing Loans transferred to the WST warehouse trust. The Trust Manager may
not substitute a housing loan unless it has received written confirmation
from the Rating Agencies that the substitution will not result in the
downgrade or withdrawal of the rating given to the Offered Notes. In
addition, if the Unpaid Balance of the Housing Loan removed from the Trust is
greater than the Unpaid Balance of the substituted housing loan, the WST
warehouse trust must pay the Issuer Trustee the Substitution Net Transfer
Amount (Principal) and Substitution Net Transfer Amount (Income) with respect
to such Housing Loan.
Prescription
An Offered Note shall become void in its entirety unless surrendered for
payment within ten years of the Relevant Date in respect of any payment
thereon the effect of which would be to reduce the Stated Amount of such
Offered Note to zero. After the date on which an Offered Note becomes void in
its entirety, no claim may be made in respect of it.
The "Relevant Date" means the date on which a payment first becomes due
but, if the full amount of the money payable has not been received in New
York City by the Principal Paying Agent or the Note Trustee on or prior to
that date, it means the date on which, the full amount of such money having
been so received, notice to that effect is duly given in accordance with the
terms of the Offered Notes.
Clean-up Offer
If at any time the aggregate Housing Loan Principal, expressed as a
percentage of the aggregate Housing Loan Principal as of the Cut-Off Date, is
less than 10%, then, if instructed by the Trust Manager, the Seller Trustee
may repurchase, on the following Payment Date, the equitable title to the
Housing Loans held by the Trust for an amount equal to the Unpaid Balance (in
the case of performing Housing Loans) or the Fair Market Value (in the case
of non-performing Housing Loans). The proceeds of sale will be applied by the
Issuer Trustee to repay moneys owing to Noteholders at that time in
accordance with the priorities for applying payments of Interest and
principal between the Classes of Notes.
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Redemption of the Notes
If an Event of Default occurs under the Security Trust Deed while the
Offered Notes are outstanding, the Security Trustee may (subject, in certain
circumstances, to the prior written consent of the Note Trustee in accordance
with the provisions of the Security Trust Deed), (and will if so directed by
the Note Trustee alone where it is the only Voting Mortgagee, or, otherwise
by a resolution of 75% of the Voting Mortgagees) enforce the security created
by the Security Trust Deed. That enforcement can include the sale of some or
all of the Housing Loans. There is no guarantee that the Security Trustee
will be able to sell the Housing Loans for their then Unpaid Balance.
Accordingly, the Security Trustee may not be able to realize the full value
of the Housing Loans and this may have an impact upon the Issuer Trustee's
ability to repay all amounts outstanding in relation to the Notes.
Any proceeds from the enforcement of the security will be applied in
accordance with the order of priority of payments as set out in the Security
Trust Deed. See "SECURITY FOR THE NOTES--Priorities Under the Security Trust
Deed."
If the Trust terminates while Notes are outstanding, Westpac has a right
of first refusal to acquire the Housing Loans. The price to be paid by
Westpac for performing and non-performing Housing Loans must not be less than
their Fair Market Value. In the case of performing loans, the Issuer Trustee
is required to offer to sell them to Westpac under its right of first refusal
for their then Unpaid Balance. The "Unpaid Balance" of a Housing Loan, means
the sum of (a) the unpaid principal amount of that Housing Loan; and (b) the
unpaid amount of all finance charges, interest payments and other amounts
accrued on or payable under or in connection with that Housing Loan or the
related Mortgage or other rights relating to the Housing Loan. Where the Fair
Market Value of a Housing Loan is less than its then Unpaid Balance, its
acquisition by Westpac will be subject to prior approval by 75% of the votes
of all Noteholders. This is because in such circumstances there may be a
shortfall in the amount available to the Issuer Trustee to fully repay all
amounts outstanding in relation to the Notes. The Servicer will determine
whether a Housing Loan is performing or non-performing.
Withholding or Tax Deductions
All payments in respect of the Offered Notes will be made without
withholding or tax deduction for, or on account of, any present or future
taxes, duties or charges of whatsoever nature unless the Issuer Trustee or
any Paying Agent is required by applicable law to make any such payment in
respect of the Offered Notes subject to any withholding or deduction for, or
on account of, any present or future taxes, duties or charges of whatsoever
nature. In the event that the Issuer Trustee or the Paying Agent (as the case
may be) shall make such payment after such withholding or deduction has been
made, it shall account to the relevant authorities for the amount so required
to be withheld or deducted. Neither the Issuer Trustee nor any Paying Agent
will be obliged to make any additional payments to holders of the Offered
Notes in respect to that withholding or deduction.
Redemption of the Offered Notes for Taxation or Other Reasons
If the Trust Manager satisfies the Issuer Trustee and the Note Trustee
immediately prior to giving the notice referred to below that either (i) on
the next Payment Date the Issuer Trustee would be required to deduct or
withhold from any payment of principal or interest in respect of the Offered
Notes any amount for or on account of any present or future taxes, duties,
assessments or governmental charges of whatever nature imposed, levied,
collected, withheld or assessed by the Commonwealth of Australia or any of
its political sub-divisions or any of its authorities or (ii) the total
amount payable in respect of interest in relation to the Housing Loans for a
Collection Period ceases to be receivable (whether or not actually received)
by the Issuer Trustee during such Collection Period by reason of any present
or future taxes, duties, assessments or governmental charges of whatever
nature imposed, levied, collected, withheld or assessed by the Commonwealth
of Australia or any of its political sub-divisions or any of its authorities,
the Issuer Trustee must, when so directed by the Trust Manager (at any time
at the Trust Manager's option) (provided that the Issuer Trustee will be in a
position on such Payment Date to discharge (and will so certify to the Issuer
Trustee and the Note Trustee) all its liabilities in respect of such Class
and any amounts required under the Security Trust Deed to be paid in priority
to or pari passu with such Class) upon having given not more than 60 nor less
than 30 days' notice to the Noteholders of such
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Class redeem all, but not some, of such Class at their Invested Amount (or at
the option of the holders of 75% of the aggregate Invested Amount of such
Class, at their Stated Amount), together with accrued interest to the date of
redemption on any subsequent Payment Date, provided that the holders of 75%
of the aggregate Invested Amount of such Class may elect, and shall notify
the Issuer Trustee and the Trust Manager, that they do not require the Issuer
Trustee to redeem such Class of Notes in the circumstances described above.
All amounts ranking prior to or pari passu with respect to a Class of Notes
must be redeemed concurrently with such Class. Thus the Class B Notes may not
be redeemed unless the Class A Notes are also redeemed.
Termination of the Trust
Termination Events
The Trust shall continue until, and shall terminate on the later of: (i)
its respective Termination Date; (ii) the date on which the Trust Assets have
been sold or realized upon (which such sale shall be completed within 180
days after the Termination Date of the Trust so far as reasonably
practicable and reasonably commercially viable); and (iii) the date on which
the Issuer Trustee ceases to hold any Housing Loans or Mortgages in relation
to the Trust.
Realization Upon Trust Assets
On the termination of the Trust, subject to Westpac's right of first
refusal outlined below, the Issuer Trustee must sell and realize the assets
of the Trust within 180 days. During the 180 day period, the Housing Loans,
if performing, must not be sold for less than their Unpaid Balance and in the
case of non-performing Housing Loans, for less than their Fair Market Value.
The Issuer Trustee may not sell any performing Housing Loan, within the 180
day period, for less than its Fair Market Value without the consent of the
holders of 75% of the aggregate Invested Amount of the relevant Class of
Notes. The Servicer will determine whether a Housing Loan is performing or
non-performing.
Approved Seller's Right of First Refusal
As soon as practical after the Termination Date of the Trust, the Trust
Manager will direct the Issuer Trustee to offer (by written notice to
Westpac) irrevocably to extinguish in favor of Westpac, or if the Issuer
Trustee has perfected its title, to equitably assign to Westpac, its entire
right, title and interest in and to the Housing Loans, and related Mortgages
(if any) for their Unpaid Balance (for performing Housing Loans) and their
Fair Market Value (for non-performing Housing Loans). If the Fair Market
Value of a Housing Loan is less than its Unpaid Balance, the sale requires
the approval of the holders of 75% of the votes of all Noteholders.
The Issuer Trustee is not entitled to sell any Housing Loans unless
Westpac has failed to accept the offer within 180 days after the occurrence
of the Termination Date by paying to the Issuer Trustee, within 180 days, the
purchase price.
Distribution
After deducting expenses, the Trust Manager shall direct the Issuer
Trustee to distribute the proceeds of realization of the assets of the Trust
in accordance with the cashflow allocation methodology set out above, and in
accordance with any directions given to it by the Trust Manager.
If all Notes relating to the Trust have been fully redeemed and the
Trust's creditors paid in full, the Issuer Trustee may distribute all or part
of the Trust Assets to the relevant Beneficiary.
Trust Accounts
The Issuer Trustee will establish and maintain under the Master Trust
Deed bank accounts with an Approved Bank, consisting of the "Collection
Account" and the US$ Account (collectively, the "Trust Accounts"). Each bank
account shall be opened by the Issuer Trustee in its name and in its capacity
as trustee of the Trust. No bank account shall be used for any purpose other
than for the Trust and in accordance with the Master Trust Deed.
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The Trust Manager shall have the discretion and duty to recommend or to
propose in writing to the Issuer Trustee, the manner in which any moneys forming
part of the Trust shall be invested in Authorized Investments and what
purchases, sales, transfers, exchanges, collections, realizations or alterations
of Trust Assets shall be effected and when and how the same should be effected.
It is the role of the Issuer Trustee to give effect to all such recommendations
or proposals of the Trust Manager. Each investment of moneys on deposit in the
Trust Accounts shall be in Authorized Investments that will mature not later
than the Business Day preceding the applicable monthly Payment Date. "Authorized
Investments" consist of the following: (a) Housing Loans, Mortgages and other
related securities, (b) cash, (c) bonds, debentures, stock or treasury bills of
the Commonwealth of Australia or the Government of any State or Territory of the
Commonwealth; (d) debentures or stock of any public statutory body constituted
under the law of the Commonwealth of Australia or of any State of the
Commonwealth where the repayment of the principal is secured and the interest
payable thereon is guaranteed by the Commonwealth or any State or Territory of
the Commonwealth; (e) notes or other securities of the Commonwealth of Australia
or the Government of any State or Territory of the Commonwealth; (f)
(i) deposits with, or the acquisition of certificates of deposit (whether
negotiable, convertible or otherwise), issued by, a bank which carries on
business in Victoria and New South Wales; (ii) bills of exchange which at the
time of acquisition have a remaining term to maturity of not more than 200 days,
accepted or endorsed by a bank which carries on business in Victoria and New
South Wales, which, in each case, has either: (A) the highest short-term rating
available to be given by the Rating Agencies; or (B) if such investment has a
maturity of 30 days or less and does not exceed 20% of the total Invested Amount
of all relevant Notes on the date of the investment, a short-term rating of
A-1+/P-1/F-1+ by S&P, Moody's and Fitch, respectively; and (g) any other assets
of a class of assets that are both: (i) prescribed for the purposes of
sub-paragraph (iv) of the definition of a "pool of mortgages" in section
84FA(1) of the Stamp Duties Act, 1920 of New South Wales, or are otherwise
included within that definition of "pool of mortgages"; and (ii) declared by
order of the Governor in Council of Victoria and published in the Victorian
Government Gazette to be assets for purposes of Subdivision 17A of the Stamps
Act, 1958 of Victoria or are otherwise included within sub-paragraph (b)(ii) of
the definition of "pool of mortgages" in section 137NA of that Act. No
Authorized Investment may have a maturity which is later than the Maturity Date
of the outstanding Notes.
General
Collections and other amounts credited to the Collection Account will be
allocated by the Trust Manager, and paid by the Issuer Trustee as directed by
the Trust Manager, as set forth herein.
Determination Date--Calculations and Reports to Noteholders
On each Determination Date, the Trust Manager will, in respect of the
Collection Period ending before that Determination Date, deliver to the
Principal Paying Agent on behalf of the Issuer Trustee, a report (the
"Noteholder's Report") containing the following information:
(i) the Invested Amount and the Stated Amount of each Class of
Notes;
(ii) the Interest Payments and principal distributions on each Class
of Notes;
(iii) the Available Income;
(iv) the Total Available Funds;
(v) the aggregate of all Redraws made during that Collection Period;
(vi) the Redraw Shortfall;
(vii) the Subordinated Percentage;
(viii) the Initial Subordinated Percentage;
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(ix) the Payment Shortfall (if any);
(x) the Principal Draw (if any) for that Collection Period, together
with all Principal Draws made before the start of that Collection Period
and not repaid;
(xi) the Gross Principal Collections;
(xii) the Principal Collections;
(xiii) the Liquidity Shortfall (if any);
(xiv) the Remaining Liquidity Shortfall (if any);
(xv) the Principal Charge Off (if any);
(xvi) the Class A Percentage and the Class B Percentage;
(xvii) the Class A Bond Factor, the Class B Bond Factor, the RFS
Class A Bond Factor and the RFS Bond Factor for each RFS Series (The "Bond
Factor" with respect to a Class of Notes is the Initial Invested Amount of
such Class less all principal payments on such Class divided by the Initial
Invested Amount of such Class);
(xxviii) the Class A Charge Offs, the Class B Charge Offs, the RFS
Class A Charge Offs, the RFS Charge Offs and the Redraw Charge Offs (if
any);
(xix) all Carryover Charge Offs (if any);
(xx) if required, the Threshold Rate at that Collection Determination
Date;
(xxi) the Quarterly Percentage;
(xxii) LIBOR, as at the first day of the related Interest Period
ending immediately after that Collection Determination Date as calculated
by the Agent Bank;
(xxiii) scheduled and unscheduled payments of principal on the Housing
Loans;
(xxiv) aggregate Balances Outstanding of Fixed Rate Housing Loans and
aggregate Balances Outstanding of Variable Rate Housing Loans; and
(xxv) delinquency statistics with respect to the Housing Loans; and
(xxvi) the amount remaining on account in the Collection Account after
all distributions on the related Payment Date.
The Notes will be registered in the name of a nominee of DTC and will
not be registered in the names of the beneficial owners or their nominees. As
a result, unless and until Definitive Notes are issued in the limited
circumstances described under "--Definitive Notes" below, beneficial owners
will not be recognized by the Issuer Trustee as Noteholders, as that term is
used in the Master Trust Deed. Hence, until such time, beneficial owners will
receive reports and other information provided for under the Transaction
Documents only if, when and to the extent provided by DTC and its
participating organizations.
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The Trust Manager will, on or promptly after each Notice Date, prepare
and arrange for the publication on Reuters Screen page ____________ to
____________ of summary pool performance data for the Trust in a format as
determined by the Trust Manager.
Book-Entry Registration
Each Class of the Offered Notes will be represented by one or more
book-entry Notes (the "Book-Entry Notes"). Persons acquiring beneficial
ownership interests in the Offered Notes ("Note Owners") will hold their
Notes through the Depository Trust Company ("DTC") in the United States, or
Cedel or Euroclear (in Europe) if they are participants of such systems, or
indirectly through organizations which are participants in such systems. The
Book-Entry Notes will be issued in one or more certificates which equal the
aggregate principal balance of each Class of the Offered Notes and will
initially be registered in the name of Cede & Co., the nominee of DTC. Cedel
and Euroclear will hold omnibus positions on behalf of their participants
through customers' securities accounts in Cedel's and Euroclear's names on
the books of their respective depositaries which in turn will hold such
positions in customers' securities accounts in the depositaries' names on the
books of DTC. Citibank, N.A. will act as depositary for Cedel, and Morgan
Guaranty Trust Company of New York will act as depositary for Euroclear (in
such capacities, individually, the "Relevant Depositary" and collectively,
the "European Depositaries"). Investors may hold such beneficial interests in
the Book-Entry Notes in minimum denominations of US$100,000. Except as
described below, no person acquiring a Book-Entry Note (each, a "beneficial
owner") will be entitled to receive a physical certificate representing such
Note (a "Definitive Note"). Unless and until Definitive Notes are issued, it
is anticipated that the only "Noteholder" of each Class of Notes will be Cede
& Co., as nominee of DTC. Note Owners will not be considered holders of the
Offered Notes in relation to the Master Trust Deed. Note Owners are only
permitted to exercise their rights indirectly through participants and DTC.
The Note Owner's ownership of a Book-Entry Note will be recorded on the
records of the brokerage firm, bank, thrift institution or other financial
intermediary (each, a "Financial Intermediary") that maintains the beneficial
owner's account for such purpose. In turn, the Financial Intermediary's
ownership of such Book-Entry Note will be recorded on the records of DTC (or
of a participating firm that acts as agent for the Financial Intermediary,
whose interest will in turn be recorded on the records of DTC, if the
beneficial owner's Financial Intermediary is not a DTC participant and on the
records of Cedel or Euroclear, as appropriate).
Note Owners will receive all distributions of principal of, and interest
on, each Class of Offered Notes from the Issuer Trustee through DTC and DTC
Participants. While the Offered Notes are outstanding (except under the
circumstances described below), under the rules, regulations and procedures
creating and affecting DTC and its operations (the "Rules"), DTC is required
to make book-entry transfers among Participants on whose behalf it acts with
respect to the Offered Notes and is required to receive and transmit
distributions of principal of, and interest on, the Offered Notes.
Participants and indirect participants with whom Note Owners have accounts
with respect to Offered Notes are similarly required to make book-entry
transfers and receive and transmit such distributions on behalf of their
respective Note Owners. Accordingly, although Note Owners will not possess
certificates, the Rules provide a mechanism by which Note Owners will receive
distributions and will be able to transfer their interest.
Note Owners will not receive or be entitled to receive certificates
representing their respective interests (i.e., Definitive Notes) in the
Offered Notes, except under the limited circumstances described below. Unless
and until Definitive Notes are issued, Note Owners who are not Participants
may transfer ownership of Offered Notes only through Participants and
indirect participants by instructing such Participants and indirect
participants to transfer Offered Notes, by book-entry transfer, through DTC
for the account of the purchasers of such Offered Notes, which account is
maintained with their respective Participants. Under the Rules and in
accordance with DTC's normal procedures, transfers of ownership of Offered
Notes will be executed through DTC and the accounts of the respective
Participants at DTC will be debited and credited. Similarly, the Participants
and indirect participants will make debits or credits, as the case may be, on
their records on behalf of the selling and purchasing Note Owners.
Because of time zone differences, credits of securities received in
Cedel or Euroclear as a result of a transaction with a Participant will be
made during subsequent securities settlement processing and dated the
Business Day following the DTC settlement date. Such credits or any
transactions in such securities settled during such processing will be
reported
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to the relevant Euroclear or Cedel Participants on such Business Day. Cash
received in Cedel or Euroclear as a result of sales of securities by or
through a Cedel Participant (as defined below) or Euroclear Participant (as
defined below) to a DTC Participant will be received with value on the DTC
settlement date but will be available in the relevant Cedel or Euroclear cash
account only as of the Business Day following settlement in DTC.
Transfers between Participants will occur in accordance with DTC Rules.
Transfers between Cedel Participants and Euroclear Participants will occur in
accordance with their respective rules and operating procedures.
Cross-market transfers between persons holding directly or indirectly
through DTC, on the one hand, and directly or indirectly through Cedel
Participants or Euroclear Participants, on the other, will be effected in DTC
in accordance with DTC Rules on behalf of the relevant European international
clearing system by the Relevant Depositary; however, such cross market
transactions will require delivery of instructions to the relevant European
international clearing system by the counterparty in such system in
accordance with its rules and procedures and within its established deadlines
(European time). The relevant European international clearing system will, if
the transaction meets its settlement requirements, deliver instructions to
the Relevant Depositary to take action to effect final settlement on its
behalf by delivering or receiving securities in DTC, and making or receiving
payment in accordance with normal procedures for same day funds settlement
applicable to DTC. Cedel Participants and Euroclear Participants may not
deliver instructions directly to the European Depositaries.
DTC, which is a New York-chartered limited purpose trust company,
performs services for its participants, some of which (and/or their
representatives) own DTC. In accordance with its normal procedures, DTC is
expected to record the positions held by each DTC participant in the
Book-Entry Notes, whether held for its own account or as a nominee for
another person. In general, beneficial ownership of Book-Entry Notes will be
subject to the rules, regulations and procedures governing DTC and DTC
participants as in effect from time to time.
Cedel is incorporated under the laws of Luxembourg as a professional
depository. Cedel holds securities for its participating organizations
("Cedel Participants") and facilitates the clearance and settlement of
securities transactions between Cedel Participants through electronic
book-entry changes in accounts of Cedel Participants, thereby eliminating the
need for physical movement of certificates. Transactions may be settled in
Cedel in any of 28 currencies, including United States dollars. Cedel
provides to its Cedel Participants, among other things, services for
safekeeping, administration, clearance and settlement of
internationally-traded securities and securities lending and borrowing. Cedel
interfaces with domestic markets in several countries. As a professional
depository, Cedel is subject to regulation by the Luxembourg Monetary
Institute. Cedel participants are recognized financial institutions around
the world, including underwriters, securities brokers and dealers, banks,
trust companies, clearing corporations and certain other organizations.
Indirect access to Cedel is also available to others, such as banks, brokers,
dealers and trust companies that clear through or maintain a custodial
relationship with a Cedel Participant, either directly or indirectly.
Euroclear was created in 1968 to hold securities for its participants
("Euroclear Participants") and to clear and settle transactions between
Euroclear Participants through simultaneous electronic book-entry delivery
against payment, thereby eliminating the need for physical movement of
certificates and any risk from lack of simultaneous transfers of securities
and cash. Transactions may be settled in any of 32 currencies, including
United States dollars. Euroclear includes various other services, including
securities lending and borrowing and interfaces with domestic markets in
several countries generally similar to the arrangements for cross-market
transfers with DTC described above. Euroclear is operated by the Brussels,
Belgium office of Morgan Guaranty Trust Company of New York (the "Euroclear
Operator"), under contract with Euroclear Clearance Systems S.C., a Belgian
cooperative corporation (the "Cooperative"). All operations are conducted by
the Euroclear Operator, and all Euroclear securities clearance accounts and
Euroclear cash accounts are accounts with the Euroclear Operator, not the
Cooperative. The Cooperative establishes policy for Euroclear on behalf of
Euroclear Participants. Euroclear Participants include banks (including
central banks), securities brokers and dealers and other professional
financial intermediaries. Indirect access to Euroclear is also available to
other firms that clear through or maintain a custodial relationship with a
Euroclear Participant, either directly or indirectly.
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The Euroclear Operator is the Belgian branch of a New York banking
corporation which is a member bank of the Federal Reserve System. As such, it
is regulated and examined by the Board of Governors of the Federal Reserve
System and the New York State Banking Department, as well as the Belgian
Banking Commission.
Securities clearance accounts and cash accounts with the Euroclear
Operator are governed by the Terms and Conditions Governing Use of Euroclear
and the related Operating Procedures of the Euroclear System and applicable
Belgian law (collectively, the "Terms and Conditions"). The Terms and
Conditions govern transfers of securities and cash within Euroclear,
withdrawals of securities and cash from Euroclear, and receipts of payments
with respect to securities in Euroclear. All securities in Euroclear are held
on a fungible basis without attribution of specific certificates to specific
securities clearance accounts. The Euroclear Operator acts under the Terms
and Conditions only on behalf of Euroclear Participants, and has no record of
or relationship with persons holding through Euroclear Participants.
Distributions on the Book-Entry Notes will be made on each Payment Date
by the Principal Paying Agent to DTC. DTC will be responsible for crediting
the amount of such payments to the accounts of the applicable DTC
participants in accordance with DTC's normal procedures. Each DTC participant
will be responsible for disbursing such payments to the beneficial owners of
the Book-Entry Notes that it represents and to each Financial Intermediary
for which it acts as agent. Each such Financial Intermediary will be
responsible for disbursing funds to the beneficial owners of the Book-Entry
Notes that it represents.
Under a book-entry format, beneficial owners of the Book-Entry Notes may
experience some delay in their receipt of payments, since such payments will
be forwarded by the Principal Paying Agent to Cede & Co. Distributions with
respect to the Offered Notes held through Cedel or Euroclear will be credited
to the cash accounts of Cedel Participants or Euroclear Participants in
accordance with the relevant system's rules and procedures, to the extent
received by the Relevant Depositary. Such distributions will be subject to
tax reporting in accordance with relevant United States tax laws and
regulations. Because DTC can only act on behalf of Financial Intermediaries,
the ability of a beneficial owner to pledge Book-Entry Notes to persons or
entities that do not participate in the Depository system, or otherwise take
actions in respect of such Book-Entry Notes, may be limited due to the lack
of physical certificates for such Book-Entry Notes. In addition, issuance of
the Book-Entry Notes in book-entry form may reduce the liquidity of such
Offered Notes in the secondary market since certain potential investors may
be unwilling to purchase the Offered Notes for which they cannot obtain
physical certificates.
Quarterly and annual reports on the Trust will be provided to Cede &
Co., as nominee of DTC, and may be made available by Cede & Co. to beneficial
owners upon request, in accordance with the rules, regulations and procedures
creating and affecting the Depository, and to the Financial Intermediaries to
whose DTC accounts the Book-Entry Notes of such beneficial owners are
credited.
DTC has advised the Note Trustee that, unless and until Definitive Notes
are issued, DTC will take any action permitted to be taken by the holders of
the Book-Entry Notes under the Note Trust Deed only at the direction of one
or more Financial Intermediaries to whose DTC accounts the Book-Entry Notes
are credited, to the extent that such actions are taken on behalf of
Financial Intermediaries whose holdings include such Book-Entry Notes. Cedel
or the Euroclear Operator, as the case may be, will take any other action
permitted to be taken by an Offered Noteholder under the Transaction
Documents on behalf of a Cedel Participant or Euroclear Participant only in
accordance with its relevant rules and procedures and subject to the ability
of the Relevant Depositary to effect such actions on its behalf through DTC.
DTC may take actions, at the direction of the related Participants, with
respect to some Offered Notes which conflict with actions taken with respect
to other Offered Notes.
Although DTC, Cedel and Euroclear have agreed to the foregoing
procedures in order to facilitate transfers of Offered Notes among
participants of DTC, Cedel and Euroclear, they are under no obligation to
perform or continue to perform such procedures and such procedures may be
discontinued at any time.
Neither the Issuer Trustee, the Servicer nor the Note Trustee will have
any responsibility for any aspect of the records relating to or payments made
on account of beneficial ownership interests of the Book-Entry Notes held by
Cede
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& Co., as nominee for DTC, or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.
Definitive Notes
The Offered Notes of each Class will be issued in definitive form to the
Note Owners of such Class or their nominees ("Definitive Notes"), rather than
to the Depository or its nominee, only if (i) the Trust Manager advises the
Principal Paying Agent in writing that the Depository is no longer willing or
able to discharge properly its responsibilities as Depository with respect to
the Offered Notes of such Class, or the Depository or its successor ceases to
carry on business and the Trust Manager is unable to locate a qualified
successor, (ii) the Issuer Trustee, at the direction of the Trust Manager
advises the Principal Paying Agent in writing that the book-entry system
through the Depository is or is to be terminated or (iii) an Event of Default
has occurred, and Note Owners representing not less than a majority of the
aggregate Invested Amount of such Class advise the Principal Paying Agent and
the Issuer Trustee through the Participants and the Depository in writing
that the continuation of a book-entry system through the Depository is no
longer in the best interest of the Note Owners of such Class.
Upon the occurrence of any of the events described in the immediately
preceding paragraph, the Depository is required to notify all Participants of
the availability through the Depository of Definitive Notes. Upon surrender
by the Depository of the definitive certificate representing the Offered
Notes of the affected Class and instructions for registration, the Trustee
will execute and the Principal Paying Agent will authenticate the Offered
Notes of such Class as Definitive Notes, and thereafter the Trustee will
recognize the Note Owners of such Definitive Notes as Offered Noteholders
under the Transaction Documents.
Distributions of principal and interest on the Offered Notes will be
made by the Principal Paying Agent directly to Offered Noteholders in
accordance with the procedures set forth herein and in the Master Trust Deed,
Series Notice, the Note Trust Deed and Agency Agreement. Interest payments
and any principal payments on each Payment Date will be made to Offered
Noteholders in whose names the Definitive Notes were registered at the close
of business on the related Record Date. Distributions will be made by check
mailed to the address of such Noteholder as it appears on the register
maintained by the Principal Paying Agent. The final payment, on any Offered
Note, however, will be made only upon presentation and surrender of such Note
at the office or agency specified in the notice of final distribution to
Offered Noteholders. The Trustee will provide such notice to registered
Noteholders.
Definitive Notes will be transferable and exchangeable at the offices of
the transfer agent and registrar, which initially will be the Principal
Paying Agent (in such capacity, the "Transfer Agent and Registrar"). No
service charge will be imposed for any registration of transfer or exchange,
but the Transfer Agent and Registrar may require payment of a sum sufficient
to cover any tax or other governmental charge imposed in connection
therewith. The Transfer Agent and Registrar will not be required to register
the transfer or exchange of Definitive Notes for the period from the Record
Date preceding the due date for any payment to the Payment Date with respect
to such Definitive Notes.
Modification of Master Trust Deed, Series Notice and the Note Trust Deed
Without Noteholder Consent
The Issuer Trustee, the Trust Manager, the Servicer (with respect to the
Master Trust Deed and the Series Notice) and the Note Trustee (with respect
to the Note Trust Deed) may by way of supplemental deed alter, add to or
modify the Master Trust Deed, the Series Notice and the Note Trust Deed so
long as such alteration, addition or modification was effected upon consent
of the Noteholders or Beneficiaries (see "--Modification of Master Trust
Deed, Series Notice and the Note Trust Deed With Noteholder Consent" below)
or is:
(a) to correct a manifest error or ambiguity or is of a formal,
technical or administrative nature only;
(b) necessary to comply with the provisions of any law or regulation
or with the requirements of any Australian governmental agency;
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(c) appropriate or expedient as a consequence of an amendment to any
law or regulation or altered requirements of any Government Agency
(including, without limitation, an alteration, addition or modification
which is appropriate or expedient as a consequence of the enactment of a
statute or regulation or an amendment to any statute or regulation or
ruling by the Australian Commissioner or Deputy Commissioner of Taxation or
any governmental announcement or statement, in any case which has or may
have the effect of altering the manner or basis of taxation of trusts
generally or of trusts similar to any of the Trusts); or
(d) in the opinion of the Issuer Trustee desirable to enable the
provisions of the Master Trust Deed to be more conveniently,
advantageously, profitably or economically administered or is otherwise
desirable for any reason (including to give effect, in the Trust Manager's
reasonable opinion, to an allocation of expenses).
Modification of Master Trust Deed, Series Notice and the Note Trust Deed With
Noteholder Consent
Where in the reasonable opinion of the Issuer Trustee a proposed
alteration, addition or modification to the Master Trust Deed, the Series
Notice and the Note Trust Deed (except an alteration, addition or
modification referred to in "--Modification of Master Trust Deed, Series
Notice and the Note Trust Deed Without Noteholder Consent" above) is
prejudicial or likely to be prejudicial to the interests of the Noteholders
or a Class of Noteholders or the Beneficiaries such alteration, addition or
modification may only be effected by the Issuer Trustee with the prior
consent of the holders of 75% of the aggregate Invested Amount of the Notes,
the Class A Notes or the Class B Notes (as the case may be) or with the prior
written consent of the Beneficiaries (as the case may be).
Meetings of Voting Mortgagees
The Security Trust Deed contains provisions for convening meetings of
the Voting Mortgagees to, inter alia, enable the Voting Mortgagees to direct
or consent to the Security Trustee taking or not taking certain actions under
the Security Trust Deed, for example, to enable the Voting Mortgagees to
direct the Security Trustee to enforce the Security Trust Deed.
For so long as the amounts outstanding under the Offered Notes are 75%
or more of all amounts secured by the Security Trust Deed, the Note Trustee
may direct the Security Trustee to do any act or thing which the Security
Trustee is required to do, or may only do, at the direction of an
Extraordinary Resolution of the Voting Mortgagees.
Neither the Security Trustee nor the Trust Manager may call a meeting of
Voting Mortgagees without the Note Trustee's consent, if the amounts
outstanding under the Notes are 75% or more of all amounts secured by the
Security Trust Deed.
Voting of Class A Noteholders; Modification; Consents; Waiver
The Note Trust Deed contains provisions for the Class A Noteholders to
consider any matter affecting their interests. In general, the holders of a
majority of the aggregate Invested Amount of the Class A Notes may take or
consent to any action permitted to be taken by Class A Noteholders under the
Note Trust Deed. Notwithstanding the foregoing, the consent of holders of 75%
of the aggregate Invested Amount of the Class A Notes shall be required to
(i) direct the Note Trustee to direct the Security Trustee to enforce the
security under the Note Trust Deed, (ii) override any waiver by the Note
Trustee of a breach of any provisions of the Transaction Documents or an
Event of Default, (iii) alter, add, or modify the terms and conditions of the
Class A Notes or the provisions of any of the Transaction Documents if such
alteration, addition or modification is, in the opinion of the Note Trustee,
materially prejudicial or likely to be materially prejudicial to the Offered
Noteholders as a whole or the Class A Noteholders, which shall include any
modification to the date of maturity of the Class A Notes, or a modification
which would have the effect of postponing any day for payment of interest in
respect of any Class A Notes, reducing or cancelling the amount of principal
payable in respect of any Class A Notes or the rate of interest applicable to
any Class A Notes or altering the percentage of the aggregate Invested Amount
required to consent to any action or altering the currency of payment of any
Class A Notes or an alteration of the date or priority of redemption of the
Class A Notes (any such modification being referred to below as a "Basic
Terms Modification"). The Note Trust Deed contains provisions limiting the
powers of the Class B Noteholders, inter alia, to request or direct the Note
Trustee to take any action that would be materially prejudicial to the
interests of
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the Class A Noteholders. Except in certain circumstances, the Note Trust Deed
imposes no such limitations on the powers of the Class A Noteholders, the
exercise of which will be binding on the Class B Noteholders, irrespective of
the effect on the Class B Noteholders' interests. Any action taken by the
requisite percentage of the Invested Amount of the Class A Noteholders shall
be binding on all Class A Noteholders (both present and future).
Pursuant to the terms of the Note Trust Deed, the Note Trustee may
agree, without the consent of the Class A Noteholders, among other things,
(i) to any modification (except a Basic Terms Modification) of, or to the
waiver or authorization of any breach or proposed breach of the Class A Notes
(including the Conditions), or any of the Transaction Documents which is not,
in the opinion of the Note Trustee materially prejudicial to the interests of
the Class A Noteholders or (ii) to any modification of the Class A Notes
(including the Conditions, or any of the Transaction Documents which, in the
Note Trustee's opinion, is to correct a manifest error or is of a formal,
minor or technical nature or necessary to comply with any law or regulation.
The Note Trustee may also, without the consent of the Class A Noteholders,
determine that any Event of Default or any condition, event or act which with
the giving of notice and/or lapse of time and/or the issue of a certificate
would constitute an Event of Default shall not, or shall not subject to
specified conditions, be treated as such. Any such modification, waiver,
authorization or determination shall be binding on the Class A Noteholders
and, unless the Note Trustee agrees otherwise, any such modification shall be
notified to the Class A Noteholders as specified in the Transaction Documents
as soon as practicable thereafter.
Voting of Class B Noteholders; Modifications; Consents; Waiver
The Note Trust Deed contains provisions for the Class B Noteholders to
consider any matter affecting their interests. In general, the holders of a
majority of the aggregate Invested Amount of the Class B Notes may take or
consent to any action permitted to be taken by Class B Noteholders under the
Note Trust Deed. Notwithstanding the foregoing, the consent of holders of 75%
of the aggregate Invested Amount of the Class B Notes shall be required to
(i) direct the Note Trustee to direct the Security Trustee to enforce the
security under the Note Trust Deed, (ii) override any waiver by the Note
Trustee of a breach of any provisions of the Transaction Documents or an
Event of Default, (iii) alter, add, or modify the terms and conditions of the
Class B Notes or the provisions of any of the Transaction Documents if such
alteration, addition or modification is, in the opinion of the Note Trustee,
materially prejudicial or likely to be materially prejudicial to the Offered
Noteholders as a whole or the Class B Noteholders, which shall include any
modification to the date of maturity of the Class B Notes, or a modification
which would have the effect of postponing any day for payment of interest in
respect of any Class B Notes, reducing or cancelling the amount of principal
payable in respect of any Class B Notes or the rate of interest applicable to
any Class B Notes or altering the percentage of the aggregate Invested Amount
required to consent to any action or altering the currency of payment of any
Class B Notes or an alteration of the date or priority of redemption of the
Class B Notes (any such modification being referred to below as a "Basic
Terms Modification"). The Note Trust Deed contains provisions limiting the
powers of the Class B Noteholders, inter alia, to request or direct the Note
Trustee to take any action that would be materially prejudicial to the
interests of the Class A Noteholders. Except in certain circumstances, the
Note Trust Deed imposes no such limitations on the powers of the Class A
Noteholders, the exercise of which will be binding on the Class B
Noteholders, irrespective of the effect on their interests. Any action taken
by the requisite percentage of Invested Amount of the Class B Noteholders
shall be binding on all Class B Noteholders (both present and future).
Pursuant to the terms of the Note Trust Deed, the Note Trustee may
agree, without the consent of the Class B Noteholders; among other things (i)
to any modification (except a Basic Terms Modification) of; or to the waiver
or authorization of any breach or proposed breach of the Class B Notes
(including the Conditions with respect to the Class B Notes), or any of the
Transaction Documents which is not, in the opinion of the Note Trustee
materially prejudicial to the interests of the Class B Noteholders or (ii) to
any modification of the Class B Notes (including the Conditions with respect
to the Class B Notes, or any of the Transaction Documents which, in the Note
Trustee's opinion, is to correct a manifest error or is of a formal, minor or
technical nature or necessary to comply with any law or regulation. The Note
Trustee may also, without the consent of the Class B Noteholders, determine
that any Event of Default or any condition, event or act which with the
giving of notice and/or lapse of time and/or the issue of a certificate would
constitute an Event of Default shall not, or shall not subject to specified
conditions, be treated as such. Any such modification, waiver, authorization
or determination shall be binding on the Class B Noteholders and, unless the
Note
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Trustee agrees otherwise, any such modification shall be notified to the
Class B Noteholders as specified in the Transaction Documents as soon as
practicable thereafter.
Events of Default; Rights Upon Event of Default
An "Event of Default" under the Security Trust Deed will occur if:
(1) the Issuer Trustee fails to pay any Interest within 10 Business
Days of the Payment Date on which the Interest was due to be paid to Class
A Noteholders, Class B Noteholders, holders of RFSs or holders of RFS
Class A Notes;
(2) the Issuer Trustee fails to pay any other amount owing to Class A
Noteholders, Class B Noteholders, holders of RFSs, holders of RFS Class A
Notes or any other Mortgagee (as defined in the Security Trust Deed) within
10 Business Days of the due date for payment (or within any applicable
grace period agreed with the relevant Mortgagee or where the Mortgagee is a
Noteholder with the Note Trustee);
(3) the Issuer Trustee fails to perform or observe any other
provisions (other than the obligations referred to in paragraphs (1) and
(2)) of a Transaction Document where such failure will have a material and
adverse effect on the amount of any payment to be made to any Noteholder or
will materially and adversely affect the timing of such payment, and that
default (if in the opinion of the Security Trustee capable of remedy (that
opinion, being subject in certain circumstances to the approval of the Note
Trustee in accordance with the provisions of the Security Trust Deed)) is
not remedied within 30 days (or such longer period as may be specified in
the notice, that longer period having been approved by the Note Trustee,
for so long as amounts outstanding under the Offered Notes are 75% or more
of the Secured Moneys) after written notice from the Security Trustee
requiring the failure to be remedied;
(4) an Insolvency Event occurs relating to the Issuer Trustee (in its
personal capacity or as trustee of the Trust);
(5) the charge created by the Security Trust Deed is not or ceases to
be a first ranking charge over the Trust Assets, or any other obligation of
the Issuer Trustee (other than as mandatorily preferred by law) ranks ahead
of or pari passu with any of the moneys secured by the Security Trust Deed;
(6) any security interest over the Trust Assets is enforced;
(7) all or any part of any Transaction Document (other than the
Redraw Facility or the Swap Agreements) is terminated or is or becomes
void, illegal, invalid, unenforceable or of limited force and effect, or a
party becomes entitled to terminate, rescind or avoid all or part of any
Transaction Document (other than the Underwriting Agreement, the Redraw
Facility or the Swap Agreements); or
(8) without the prior consent of the Security Trustee (that consent
being subject in certain circumstances to the prior written consent of the
Note Trustee in accordance with the provisions of the Security Trust Deed),
(i) the Trust is wound up, or the Issuer Trustee is required to wind up the
Trust under the Master Trust Deed or applicable law, or the winding up of
the Trust commences; (ii) the Trust is held or is conceded by the Issuer
Trustee not to have been constituted or to have been imperfectly
constituted; or (iii) unless another trustee is appointed to the Trust
under the Transaction Documents, the Issuer Trustee ceases to be authorized
under the Trust to hold the property of the Trust in its name and to
perform its obligations under the Transaction Documents.
If an Event of Default occurs and is continuing, the Note Trustee shall
deliver to each Offered Noteholder notice of such Event of Default within 90
days of the date that the Note Trustee became aware of such Event of Default,
provided that, except in the case of a default in payment of Interest and
principal on the Offered Notes, the Note Trustee may withhold such notice if
and so long as it determines in good faith that withholding the notice is in
the interests of the Offered Noteholders.
Enforcement of the Security Trust Deed
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The Security Trustee must promptly convene a meeting of the Voting
Mortgagees after it receives notice, or has actual knowledge of, an Event of
Default. The Security Trustee may waive (such waiver, being subject to the
prior written consent of the Note Trustee in accordance with the provisions
of the Security Trust Deed), an Event of Default before it is required to
convene a meeting of Mortgagees if that Event of Default is not (in the
opinion of the Security Trustee) materially prejudicial to the Mortgagees'
interests.
At the meeting, the Voting Mortgagees must vote by Extraordinary
Resolution (being a resolution passed at a duly convened meeting by a
majority consisting of not less than 75% of the votes capable of being cast
by Voting Mortgagees present in person or by proxy or by written resolution
signed by all of the Voting Mortgagees) on whether to direct the Security
Trustee to:
(1) declare the charge to be enforceable;
(2) declare all Secured Moneys (including amounts outstanding under
the Notes plus accrued and unpaid interest) to be immediately due and
payable;
(3) crystallize the floating charge created under the Security Trust
Deed in relation to any or all of the Mortgaged Property; and/or
(4) appoint a receiver over the Trust Assets or itself exercise the
powers that a receiver would otherwise have under the Security Trust Deed.
The Security Trustee cannot exercise the powers referred to above unless
directed by an Extraordinary Resolution in the manner outlined above. The
Security Trustee is not obligated to act unless it obtains an indemnity from
the Voting Mortgagees, and is put in funds to the extent to which it may
become liable for the relevant enforcement actions.
For so long as the Note Trustee is the only Voting Mortgagee it may
direct the Security Trustee to do any act which the Security Trustee is
required to do, or may only do, at the direction of an Extraordinary
Resolution of Voting Mortgagees. Neither the Security Trustee nor the Trust
Manager may call a meeting of Voting Mortgagees while the Note Trustee is the
only Voting Mortgagee, unless the Note Trustee otherwise consents. The Note
Trustee will be the only Voting Mortgagee for so long as the amounts
outstanding under the Offered Notes are 75% or more of all amounts secured by
the Security Trust Deed.
Upon the occurrence of an Event of Default: (i) if the Note Trustee is
the only Voting Mortgagee; and (ii) if the Note Trustee directs the Security
Trustee to enforce the charge (whether directed to do so by Class A
Noteholders or as the Note Trustee determines on behalf of the Class A
Noteholders), the Security Trustee shall enforce the charge as if directed to
do so by an Extraordinary Resolution of Voting Mortgagees.
No Mortgagee is entitled to enforce the charge under the Security Trust
Deed, or appoint a receiver or otherwise exercise any power conferred by any
applicable law on charges, otherwise than in accordance with the Security
Trust Deed.
"Voting Mortgagee" means:
(1) for so long as the amounts outstanding under the Class A Notes and
the Class B Notes are 75% or more of all Secured Moneys, the Note Trustee
alone; and
(2) at any other time: (i) the Note Trustee, acting on behalf of the
Offered Noteholders under the Note Trust Deed and the Security Trust Deed;
and (ii) each other Mortgagee under the Security Trust Deed (other than the
Offered Noteholders).
Subject to being indemnified in accordance with the Security Trust Deed,
the Security Trustee shall take all action necessary to give effect to any
direction by the Note Trustee where it is the only Voting Mortgagee or to any
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Extraordinary Resolution of the Voting Mortgagees and shall comply with all
directions given by the Note Trustee where it is the only Voting Mortgagee or
contained in or given pursuant to any Extraordinary Resolution of the Voting
Mortgagees in accordance with the Security Trust Deed.
No Noteholder is entitled to enforce the Security Trust Deed or to
appoint or cause to be appointed a receiver to any of the assets secured by
the Security Trust Deed or otherwise to exercise any power conferred by the
terms of any applicable law on charges except as provided in the Security
Trust Deed.
If any of the Class A Notes remains outstanding and are due and payable
otherwise than by reason of a default in payment of any amount due on the
Class A Notes, the Note Trustee must not vote under the Security Trust Deed
to, or otherwise direct the Security Trustee to, dispose of the Mortgaged
Property unless either:
(i) a sufficient amount would be realized to discharge in full all
amounts owing to the Class A Noteholders, and any other amounts payable by
the Issuer Trustee ranking in priority to or pari passu with the Class A
Notes; or
(ii) the Note Trustee is of the opinion, reached after considering at
any time and from time to time the advice of a merchant bank or other
financial adviser selected by the Note Trustee, that the cash flow
receivable by the Issuer Trustee (or the Security Trustee under the
Security Trust Deed) will not (or that there is a significant risk that it
will not) be sufficient, having regard to any other relevant actual,
contingent or prospective liabilities of the Issuer Trustee, to discharge
in full in due course all the amounts referred to in paragraph (i). The
Class B Notes are subject to similar constraints.
Neither the Note Trustee nor the Security Trustee will be liable for any
decline in the value, nor any loss realized upon any sale or other
dispositions made under the Security Trust Deed, of any Mortgaged Property or
any other property which is charged to the Security Trustee by any other
person in respect of or relating to the obligations of the Issuer Trustee or
any third party in respect of the Issuer Trustee or the Notes or relating in
any way to the Mortgaged Property. Without limitation, neither the Note
Trustee nor the Security Trustee shall be liable for any such decline or loss
directly or indirectly arising from its acting, or failing to act, as a
consequence of an opinion reached by it.
The Note Trustee shall not be bound to vote under the Security Trust
Deed, or otherwise direct the Security Trustee under the Security Trust Deed
or to take any proceedings, actions or steps under, or any other proceedings
pursuant to or in connection with the Security Trust Deed, the Note Trust
Deed, any Class A Notes, unless directed or requested to do so (i) by an
Extraordinary Resolution of the Class A Noteholders or the Class B
Noteholders, as appropriate; or (ii) in writing by the holders of at least
one-quarter of the aggregate Invested Amount of the Class A Notes and then
only if the Note Trustee is indemnified to its satisfaction against all
action, proceedings, claims and demands to which it may render itself liable
and all costs, charges, damages and expenses which it may incur by so doing.
Only the Security Trustee may enforce the provisions of the Security
Trust Deed and neither the Note Trustee nor any holder of an Offered Note, is
entitled to proceed directly against the Issuer Trustee to enforce the
performance of any of the provisions of the Security Trust Deed or the
Offered Notes (including the Conditions).
The rights, remedies and discretion of the Class A Noteholders and the
Class B Noteholders under the Security Trust Deed including all rights to
vote or give instructions or consent can only be exercised by the Note
Trustee on behalf of the Class A Noteholders or the Class B Noteholders, as
applicable, in accordance with the Security Trust Deed. The Security Trustee
may rely on any instructions or directions given to it by the Note Trustee as
being given on behalf of the Class A Noteholders, from time to time and need
not enquire whether the Note Trustee or the Noteholders from time to time
have complied with any requirements under the Note Trust Deed or as to the
reasonableness or otherwise of the Note Trustee. The Security Trustee is not
obliged to take any action, give any consent or waiver or make any
determination under the Security Trust Deed without being directed to do so
by the Note Trustee or by Extraordinary Resolution of the Voting Mortgagees
in accordance with the Security Trust Deed.
Upon enforcement of the security created by the Security Trust Deed, the
net proceeds thereof may be insufficient to pay all amounts due on redemption to
the Noteholders. The proceeds from enforcement (which will not include
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amounts required by law to be paid to the holder of any prior ranking
security interest, the proceeds of or amounts credited to the collateral
account under the Liquidity Facility Agreement and payable to the Liquidity
Facility Provider and the proceeds of cash collateral lodged with and payable
to a Swap Provider or other provider of a Support Facility) will be applied
in the order of priority as set out in the Security Trust Deed (see "SECURITY
FOR THE NOTES--Priorities under the Security Trust Deed"). Any claims of the
Noteholders remaining after realization of the security and application of
the proceeds as aforesaid shall, except in certain limited circumstances, be
extinguished.
See "SECURITY FOR THE NOTES" for a description of the Security Trust
Deed and the order of priorities for the proceeds from the enforcement of the
Security Trust Deed.
Certain Covenants
So long as any of the Class A Notes or the Class B Notes remains
outstanding, the Issuer Trustee has made the following covenants for the benefit
of Class A Noteholders and the Class B Noteholders which are set out in the
Master Trust Deed, including the following:
(1) The Issuer Trustee shall act continuously as trustee of the Trust
until the Trust is terminated as provided by the Master Trust Deed or the
Issuer Trustee has retired or been removed from office in the manner provided
under the Master Trust Deed.
(2) The Issuer Trustee shall:
(i) act honestly and in good faith in the performance of its duties
and in the exercise of its discretion under the Master Trust Deed;
(ii) subject to the Master Trust Deed, exercise such diligence and
prudence as a prudent person of business would exercise in performing its
express functions and in exercising its discretion under the Master Trust
Deed, having regard to the interests of the Class A Noteholders and the
Class B Noteholders and other creditors and beneficiaries of the Trust;
(iii) use its best endeavors to carry on and conduct its business
in so far as it relates to the Master Trust Deed in a proper and efficient
manner;
(iv) keep, or ensure that the Trust Manager keeps, accounting records
which correctly record and explain all amounts paid and received by the
Issuer Trustee;
(v) keep the Trust separate from each other trust which is
constituted under the Master Trust Deed and account for assets and
liabilities of the Trust separately from those of other trusts constituted
under the Master Trust Deed; and
(vi) do everything and take all such actions which are necessary
(including obtaining all appropriate authorizations) to ensure that it is
able to exercise all its powers and remedies and perform all its
obligations under the Transaction Documents and all other deeds, agreements
and other arrangements entered into by the Issuer Trustee under the Master
Trust Deed.
(3) Except as provided in the Master Trust Deed, the Issuer Trustee
shall not, nor shall it permit any of its officers to, sell, mortgage, charge
or otherwise encumber or part with possession of any Trust Assets.
(4) The Issuer Trustee's officers, employees, agents, attorneys,
delegates and sub-delegates shall duly observe and perform the covenants and
obligations of the Master Trust Deed in the same manner as is required of the
Issuer Trustee, and the Issuer Trustee agrees to indemnify the Trust Manager
for its own benefit or for the benefit of the Trust against any loss or
damage that the Trust, the Trust Manager, the Servicer, the Class A
Noteholders, the Class B Noteholders, the Beneficiaries (as defined in the
Master Trust Deed) the holders of RFSs (if any) and the holders of RFS
Class A
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Notes (if any) or other creditors incur or sustain in connection with, or
arising out of, any breach or default by such officers, employees, agents,
delegates and persons in the observance or performance of any such covenant
or obligation, to the extent that the Issuer Trustee would have been liable
if that breach or default had been the Issuer Trustee's own act or omission.
(5) The Issuer Trustee will open and operate certain bank accounts in
accordance with the Master Trust Deed and the Series Notice.
(6) Subject to the Master Trust Deed and any Transaction Document to
which it is a party, the Issuer Trustee shall act on all directions given to
it by the Trust Manager in accordance with the terms of the Master Trust
Deed.
(7) The Issuer Trustee shall properly perform the functions which are
necessary for it to perform under all Transaction Documents in respect of the
Trust.
Annual Compliance Statement
The Trustee will deliver to the Note Trustee annually a written
statement as to the fulfillment of its obligations under the Transaction
Documents.
The Note Trustee
_______________________________, will be the Note Trustee. The Note
Trustee may resign after giving three months written notice, in which event
the Issuer Trustee will be obligated to appoint a successor trustee. The
Issuer Trustee may also remove the Note Trustee if the Note Trustee ceases to
be eligible to continue as such under the Note Trust Deed or if the Note
Trustee becomes insolvent or ceases its business. In addition, holders of 75%
of the aggregate Invested Amount of the Class A Notes or, if the Class A
Notes are no longer outstanding, the Class B Notes may require the Issuer
Trustee to remove the Note Trustee. In such circumstances and others set
forth in the Note Trust Deed, the Issuer Trustee will be obligated to appoint
a successor note trustee. Any resignation or removal of the Note Trustee and
appointment of a successor note trustee will not become effective until
acceptance of the appointment by a successor note trustee and confirmation by
the Rating Agencies that such appointment will not cause a downgrading,
qualification or withdrawal of the then current ratings of the Offered Notes.
The Note Trustee shall, with respect to all the powers, trusts,
authorities, duties and discretions vested in it by the Transaction
Documents, except where expressly provided otherwise, have regard to the
interests of the Class A Noteholders and the Class B Noteholders subject to
the proviso in the following sentence. If the Note Trustee is required by the
Transaction Documents or Offered Notes to have regard to the interests of the
Class A Noteholders and the Class B Noteholders and where, in the opinion of
the Note Trustee, there is a conflict between the interests of the Class A
Noteholders and the interests of the Class B Noteholders, the Note Trustee
shall have regard only to the interests of the Class A Noteholders despite
anything to the contrary in the Transaction Documents. In such an event, the
Class B Noteholders shall have no claim against the Note Trustee for doing
so.
Governing Law
The Notes and the Transaction Documents (other than the Security Trust Deed
and certain of the swap agreements) are governed by, and shall be construed in
accordance with, the laws of New South Wales, Australia. The Security Trust Deed
is governed by, and shall be construed in accordance with the laws of the
Australian Capital Territory.
London Stock Exchange Listing
For purposes of the listing of the Offered Notes on the London Stock
Exchange, attached hereto as Annex II and Annex III are the terms and conditions
of the Class A Notes and Class B Notes, respectively.
DESCRIPTION OF THE SERVICING AGREEMENT
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General
Under the Servicing Agreement, TMC will be appointed as the initial
Servicer of the Housing Loans and custodian of the Relevant Documents
relating to the Housing Loans and Mortgages. The following section contains a
summary of the material terms of the Servicing Agreement. The summary does
not purport to be complete and is subject to the provisions of the Servicing
Agreement, which has been filed as an exhibit to the Registration Statement.
Servicing
The Servicer manages and services the Housing Loans in accordance with
the Servicing Agreement. To the extent not provided in the Servicing
Agreement, the Servicer shall manage and service the Housing Loans in
accordance with the Procedures Manual as that is interpreted and applied by
the Servicer in the ordinary course of its business. "Procedures Manual"
means, in relation to the Housing Loans, those policies and procedures of
Westpac or the Servicer (as the case may be) relating to the origination,
management and enforcement of the Housing Loans as those policies and
procedures are amended in accordance with the Servicing Agreement and applied
from time to time in Westpac's or the Servicer's ordinary course of business
(as the case may be). To the extent not covered by the Servicing Agreement or
the Procedures Manual, the Servicer manages and services the Housing Loans by
exercising the degree of diligence and care expected of an appropriately
qualified servicer of the relevant financial products and custodian of
documents. All acts of the Servicer in servicing the Housing Loans in
accordance with the relevant procedures manual are binding on the Issuer
Trustee.
Powers
Subject to the servicing standards set forth above and the limitations
set forth below, the Servicer has the express power, among other things, to
the extent such action will not cause an Adverse Effect (that is, an event
which will materially and adversely affect the amount of any payment to be
made to any Noteholder, or will materially and adversely affect the timing of
such payment):
(1) to waive any fees and break costs which may be collected in the
ordinary course of servicing the Housing Loans or arrange the rescheduling
of interest due and unpaid following a default under any Housing Loans;
(2) in its discretion, to waive any right in respect of any Housing
Loans and Mortgages in the ordinary course of servicing the Housing Loans
and Mortgages (including in accordance with its normal collection
procedures); and
(3) to grant an extension of maturity beyond 30 years from the date
any Housing Loan that relates to a Mortgage was made, when required to do
so by law or a government agency. The restriction on granting extensions
that will not have an Adverse Effect shall not apply where the extension is
required by law or a governmental agency.
Delegation by the Servicer
The Servicer is entitled to delegate its duties under the Servicing
Agreement. The Servicer at all times remains liable for servicing the Housing
Loans and the acts or omissions of any delegate.
Servicer Undertakings
The Servicer has undertaken, among other things, the following:
(1) If so directed by the Issuer Trustee following a Title Perfection
Event, it will promptly take action to perfect the Issuer Trustee's
equitable title to the Housing Loans and related Mortgages in the Mortgage
Pool to full legal title by notifying the Issuer Trustee's interests to
Borrowers and mortgagors, registering transfers, delivering documents to
the Issuer Trustee and taking other action required to perfect title.
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(2) In relation to Housing Loans of which Westpac is the legal owner,
on request from Westpac it will assist Westpac in collecting all moneys due
under those Housing Loans and Mortgages and pay them into the Collections
Account not later than the time Westpac would be required to do so.
(3) In relation to Housing Loans of which the Issuer Trustee is the
legal owner, it will collect all moneys due under those Housing Loans and
Mortgages and pay them into the Collections Account not later than the time
Westpac would be required to do so.
(4) If a material default occurs in respect of a Housing Loan, it
will take action in accordance with its normal enforcement procedures to
enforce the relevant Housing Loan and the related Mortgage to the extent it
determines to be appropriate.
(5) Act in accordance with the terms of any Mortgage Insurance
Policies, not do or omit to do anything which could be reasonably expected
to prejudicially affect or limit its rights or the rights of the Issuer
Trustee under or in respect of a Mortgage Insurance Policy, and promptly
make a claim under any Mortgage Insurance Policy when it is entitled to do
so and notify the Trust Manager when each such claim is made.
(6) It will not consent to the creation or existence of any security
interest in favor of a third party in relation to any Mortgaged Property
which would rank before or pari passu with the relevant Housing Loan and
Mortgage or allow the creation or existence of any other security interest
in the Mortgaged Property unless priority arrangements are entered into
with such third party under which the third party acknowledges that the
Housing Loan and the Mortgage ranks ahead in priority to the third party's
security interest on enforcement for an amount not less than the Unpaid
Balance of the Housing Loan plus such other amount as the Servicer
determines in accordance with the Procedures Manual or its ordinary course
of business.
(7) It will not, except as required by law, release a Borrower or
otherwise vary or discharge any Housing Loan or Mortgage where it would
have an Adverse Effect.
(8) It will set the interest rate on the Housing Loans in accordance
with the requirements of the Series Notice.
(9) If directed by the Issuer Trustee following a Title Perfection
Event, it will take action to perfect the Issuer Trustee's legal title to
the Housing Loans and related Mortgages.
(10) It will give notice in writing to the Issuer Trustee and the
Rating Agencies of it becoming aware of the occurrence of any Servicer
Transfer Event.
(11) It will maintain in effect all qualifications, consents,
licenses, permits, approvals, exemptions, filings and registrations as may
be required under any applicable law in order properly to service the
Housing Loans and Mortgages and to perform or comply with its obligations
under the Servicing Agreement.
(12) It will notify: (i) the Issuer Trustee and the Trust Manager of
any event which it reasonably believes is likely to have an Adverse Effect
promptly after becoming aware of such event; and (ii) the Trust Manager of
anything else which the Trust Manager reasonably requires regarding any
proposed modification to any Housing Loan or Mortgage.
(13) It will provide information reasonably requested by the Issuer
Trustee or the Trust Manager, with respect to all matters relating to the
Trust and the assets of the Trust, and the Issuer Trustee or the Trust
Manager believes reasonably necessary for it to perform its obligations
under the Transaction Documents, and upon reasonable notice and at
reasonable times permit the Issuer Trustee to enter the premises and
inspect the data and records in relation to the Trust and the Relevant
Documents.
Westpac Undertakings
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Westpac has undertaken, among other things, the following under the
Servicing Agreement:
(1) It will maintain in effect all qualifications, consents,
licenses, permits, approvals, exemptions, filings and registrations as may
be required under any applicable law in relation to its ownership of any
Housing Loan or Mortgage and to perform or comply with its obligations
under the Servicing Agreement; and comply with all Laws in connection with
its ownership of any Housing Loans and Mortgages where failure to do so
would have an Adverse Effect.
(2) It will cooperate with the Servicer in relation to the
performance by the Servicer of its duties under the Servicing Agreement,
including, without limitation, in relation to the enforcement of any
Housing Loan or Mortgage.
(3) If a material default occurs in respect to a Mortgage, it will
take such action as the Servicer directs it to take in accordance with the
Servicing Agreement.
(4) It will act in accordance with the terms of any Mortgage
Insurance Policies, and not do or omit to do anything which could be
reasonably expected to prejudicially affect or limit the rights of the
Issuer Trustee under or in respect of a Mortgage Insurance Policy to the
extent those rights relate to a Housing Loan and the Mortgage.
(5) It will not consent to the creation or existence of any security
interest in favor of a third party in relation to any Mortgaged Property
which would rank before or pari passu with the relevant Housing Loan and
Mortgage or allow the creation or existence of any other security interest
in the Mortgaged Property unless priority arrangements are entered into
with such third party under which the third party acknowledges that the
Housing Loan and the Mortgage ranks ahead in priority to the third party's
security interest on enforcement for an amount not less than the Unpaid
Balance of the Housing Loan plus such other amount as the Servicer
determines in accordance with the Procedures Manual or its ordinary course
of business.
(6) It will not, except as required by law, release a Borrower from
any amount owing in respect of a Housing Loan or otherwise vary or
discharge any Housing Loan or Mortgage or enter into any agreement or
arrangement which has the effect of altering the amount payable in respect
of a Housing Loan or Mortgage where it would have an Adverse Effect.
(7) It will release any Housing Loan or Mortgage, reduce the amount
outstanding under or vary the terms of any Housing Loan or grant other
relief to a Borrower, if required to do so by any law or if ordered to do
so by a court, tribunal, authority, ombudsman or other entity whose
decisions are binding on Westpac. If the order is due to Westpac breaching
any applicable law then Westpac must indemnify the Issuer Trustee for any
loss the Issuer Trustee may suffer by reason of the order. The amount of
the loss is to be determined by agreement with the Issuer Trustee or
failing this, by Westpac's external auditors.
(8) It will notify the Servicer immediately of each request by a
Borrower to borrow further moneys under or in relation to a Housing Loan or
Mortgage.
Performance of Services
In performing any services under the Servicing Agreement the Servicer
shall have regard to whether its performance of such services does or does
not have any Adverse Effect. The Servicer may ask the Issuer Trustee or the
Trust Manager if, and may rely upon any statement by the Issuer Trustee or
the Trust Manager that, any action or inaction on its part is reasonably
likely to, or will, have an Adverse Effect. The Servicer shall not be liable
for a breach of the Servicing Agreement, or be liable under any indemnity, in
relation to any action or inaction on its part, where it has been notified by
the Issuer Trustee or the Trust Manager that the action or inaction is not
reasonably likely to, or will not have, an Adverse Effect.
Servicing Compensation and Payment of Expenses
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The Servicer is entitled to a fee (the "Servicing Fee") for servicing
the Housing Loans, payable in arrears on the Payment Date following the end
of the Collection Period. The Servicing Fee is based on the average daily
balance of Housing Loan Principal during the Collection Period and on the
actual number of days in that Collection Period divided by 365 days.
The Servicer must pay from such fee all expenses incurred in connection
with servicing the Housing Loans except for expenses relating to the
enforcement of any Housing Loan or its related securities, the recovery of
any amounts owing under any Housing Loan or any amount repaid to a liquidator
or trustee in bankruptcy pursuant to any applicable law, binding code, order
or decision of any court, tribunal or the like or based on advice of the
Servicer's legal advisers.
Servicer Transfer Event and Removal
The Issuer Trustee may only terminate the Servicer's appointment if the
Issuer Trustee determines that a Servicer Transfer Event has occurred and is
continuing. A "Servicer Transfer Event" is any of the following:
(1) an Insolvency Event occurs with respect to the Servicer;
(2) the Servicer fails to pay any amount within five Business Days of
receipt of a notice to do so;
(3) the Servicer fails to comply with any of its other obligations
under any Transaction Document and such action has had, or, if continued
will have, an Adverse Effect (as determined by the Issuer Trustee) and that
failure is not remedied within 30 days after the Servicer becomes aware of
that failure by receipt of notice;
(4) any representation, warranty or certification made by the
Servicer is incorrect when made and is not waived by the Issuer Trustee or
remedied to the Issuer Trustee's reasonable satisfaction within 90 days
after notice from the Issuer Trustee, and the Issuer Trustee determines
that breach would have an Adverse Effect; or
(5) if it is unlawful for the Servicer to perform the services under
the Servicing Agreement.
In the event of a Servicer Transfer Event, the Issuer Trustee must, upon
notice to the Trust Manager, the Approved Sellers, Westpac, the Servicer and
the Rating Agencies, terminate the rights and obligations of the Servicer
with immediate effect and appoint an Eligible Servicer. Until an Eligible
Servicer is appointed and that Eligible Servicer agrees to act as the
servicer, the Issuer Trustee shall act as the Servicer and is entitled to the
fee for so acting.
Subject to certain limitations, the Servicer has indemnified the Issuer
Trustee against any expense, loss, damage or liability incurred as a result
of a Servicer Transfer Event or a failure by the Servicer to perform its
duties under the Servicing Agreement.
Resignation
The Servicer must not resign without first giving three months' notice
to the Rating Agencies, the Trust Manager and the Issuer Trustee. If an
Eligible Servicer has not agreed to act as Servicer by the expiration of that
notice period the Issuer Trustee shall act as Servicer and be entitled to the
Servicing Fee.
Document Custody
General
The Servicer will be responsible for custody of the Relevant Documents
on behalf of the Issuer Trustee. The Servicer must hold those documents as
custodian at the direction of the Issuer Trustee in accordance with its
standard safekeeping practices and in the same manner and to the same extent
that it holds similar documents for Westpac. The Servicer will hold custody
of the Relevant Documents in accordance with procedures contained in the
Servicing Agreement. The procedures include the following: (i) keeping the
Relevant Documents for Housing Loans in the
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Mortgage Pool separate from other documents; (ii) maintaining reports on
movements of the Relevant Documents; and (iii) being able to locate security
packets containing the Relevant Documents.
The Servicer will be audited on an annual basis (or more regularly if
any audit gives an adverse finding) in relation to its custodial procedures,
identification of documents, security and tracking systems.
Termination of Servicer as document custodian
If any of the following occurs:
(1) the Servicer does not comply with the requirements of the
Servicing Agreement to the satisfaction of the auditor, and a further audit
also results in an adverse finding by the auditor;
(2) the long term credit rating of the holding company of the
Servicer is downgraded:
(i) below BBB by Standard & Poor's;
(ii) below Baa2 by Moody's; or
(iii) below BBB by Fitch;
(3) the Servicer is in default under a servicing agreement between it
and any other person, and by reason of the default that other person
removes any documents in the Servicer's custody under the servicing
agreement where that person would otherwise not have been entitled to do
so; or
(4) a Servicer Transfer Event occurs and is subsisting,
then the Servicer must deliver the Relevant Documents to, or at the direction
of, the Issuer Trustee. If the Servicer does not do so within 10 Business
Days (or such longer period as the Trustee permits), then the Issuer Trustee
must enter the premises where the Relevant Documents are kept, take
possession of and remove the Relevant Documents. If the Issuer Trustee does
not have possession of the documents within that period it must lodge caveats
in relation to and/or take all other action it considers necessary to protect
its interests.
Amendment
The Servicing Agreement may be amended by the parties thereto in writing
and provided that prior notice of any proposed amendment is given to the
Rating Agencies.
Termination of Servicing Agreement
The Servicing Agreement shall continue until the expiration of the Term.
The "Term" means the period from the date of the Servicing Agreement until
the earlier of:
(a) the date on which the Servicing Agreement is terminated pursuant
to a Servicer Transfer Event;
(b) the date which is one month after the Notes have been redeemed in
full in accordance with the Transaction Documents and the Trustee ceases to
have any obligation to any creditor in relation to any Trust;
(c) the date on which the Trustee replaces the Servicer with an
Eligible Servicer; and
(d) the date on which the Servicer is replaced after resigning
pursuant to the Servicing Agreement.
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THE LIQUIDITY FACILITY
The following section contains a summary of the material terms of the
Liquidity Facility. The summary does not purport to be complete and is
subject to the provisions of the Liquidity Facility, a form of which has been
filed as an exhibit to the Registration Statement.
General Description
Under the Liquidity Facility, the Liquidity Facility Provider agrees to
make advances to the Issuer Trustee for the purpose of funding certain income
shortfalls in the Trust, up to an aggregate amount being the lesser of:
(1) A$_____________;
(2) the Unpaid Balance of all Performing Loans at that date; and
(3) any lesser amount as is agreed in writing between the Liquidity
Facility Provider, the Issuer Trustee, the Trust Manager and the Rating
Agencies for each class of Notes,
as reduced or cancelled under the Liquidity Facility (the "Liquidity Limit").
A "Performing Loan" at any date is a Housing Loan which is not
Delinquent or has been Delinquent for less than 90 consecutive days, or if it
has been Delinquent for 90 or more consecutive days was insured under a
Mortgage Insurance Policy at the date of the Liquidity Facility on or before
the Closing Date.
A Housing Loan is "Delinquent" if the related Borrower fails to pay any
amount due on the related due date. Delayed payments arising from agreed
payment holidays based on early repayments, or from maternity or paternity
leave repayment reductions will not, by themselves, lead to a Housing Loan
being Delinquent.
Liquidity Draws
If the Trust Manager determines on any Collection Determination Date
that the Available Income of the Trust plus Principal Draws for the
Collection Period relating to that Collection Determination Date is
insufficient to meet Total Payments of the Trust (a "Liquidity Shortfall"),
then the Trust Manager must direct the Issuer Trustee to request a drawing
under the Liquidity Facility to apply towards the Liquidity Shortfall. The
drawing will (subject to certain assumptions as to payment) be the lesser of
the Liquidity Shortfall and the difference between the Liquidity Limit and
the aggregate of all outstanding amounts under the Liquidity Facility (the
"Available Liquidity Amount"). A drawing may only be made by a duly completed
drawdown notice signed by an authorized signatory of the Issuer Trustee.
Conditions Precedent to a Liquidity Draw
A drawing may only be made under the Liquidity Facility (a "Liquidity
Draw") if (among other things) no event of default (see "--Events of Default"
below) subsists at the date of the relevant drawdown notice and the relevant
drawdown date or will result from the provision of the Liquidity Draw.
Deposit into a Collateral Account
If at any time the Liquidity Facility Provider's short term credit
rating is less than A-1+ from Standard & Poor's, P-1 from Moody's or F-1+
from Fitch, the Liquidity Facility Provider must within five Business Days or
such longer period as the Rating Agencies confirm will not result in a
downgrade, withdrawal or qualification of the Offered Notes, deposit into an
account held in the name of the Issuer Trustee (the "Collateral Account") an
amount equal to the Available Liquidity Amount at that time.
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If and for so long as the Liquidity Facility Provider has a short term
credit rating of not lower than A-1 from Standard & Poor's, P-1 from Moody's
and F-1 from Fitch, the Collateral Account shall be maintained with the
Liquidity Facility Provider.
If at any time the short term credit rating of the bank holding the
Collateral Account is less than A-1 from Standard & Poor's, P-1 from Moody's
or F-1 from Fitch then the balance of the Collateral Account, and all amounts
standing to the credit of the Collateral Account, must (subject to certain
limited restrictions) within five Business Days (or such longer period as the
Rating Agencies agree) be transferred to a bank with a short term credit
rating from Standard & Poor's of not lower than A-1+, not lower than P-1 from
Moody's and not lower than F-1+ from Fitch.
If the short term credit rating of the Liquidity Facility Provider is
not less than A-1 from Standard & Poor's, P-1 from Moody's and F-1 from
Fitch, and the total of the credit balance of the Collateral Account with the
Liquidity Facility Provider plus the amount of all short term investments of
the Issuer Trustee is greater than 20% of the Total Invested Amount, then so
much of the credit balance of the Collateral Account as is necessary for the
20% threshold not to be breached must (subject to certain limited
restrictions) be deposited with a bank with a short term credit rating from
Standard & Poor's of not lower than A-1+ and not lower than P-1 from Moody's
and not lower than F-1+ from Fitch.
Withdrawals from a Collateral Account are restricted to, among other
things, making a Liquidity Draw, paying financial institutions duty and bank
account debit tax (being taxes charged on account transactions) and investing
in short term investments.
All interest accrued on the moneys in the Collateral Account shall
belong to the Liquidity Facility Provider. If the Liquidity Facility
Provider's short term credit rating is upgraded to not lower than A-1+ from
Standard & Poor's, P-1 from Moody's and F-1+ from Fitch, then the balance in
the Collateral Account must be repaid within five Business Days to the
Liquidity Facility Provider and any advances under the Liquidity Facility
thereafter will be made directly from the Liquidity Facility Provider in the
normal course of business.
Interest on Liquidity Draws
Interest is payable to the Liquidity Facility Provider on the principal
amount drawn under the Liquidity Facility. This interest is payable at the Bank
Bill Rate plus a margin, calculated on days elapsed and a year of 365 days.
Interest is payable on each Payment Date and on repayment of a drawing. Unpaid
interest will capitalize, and interest accrues on any unpaid interest.
Commitment Fee
A commitment fee accrues daily from the date of the Liquidity Facility
on the Available Liquidity Amount, and is payable on each Payment Date and on
termination of the facility.
The commitment fee is calculated on the actual number of days elapsed
and a year of 365 days.
Repayment of Liquidity Drawings
If an amount has been drawn down under the Liquidity Facility, the
principal amount is repayable on the following Payment Date, to the extent
that amounts are available for this purpose under the Series Notice; see
"DESCRIPTION OF THE OFFERED NOTES--Distribution of Total Available Funds"
above. It is not an event of default if the Issuer Trustee does not have
funds available to repay the full amount outstanding on the following Payment
Date.
Events of Default
It is an event of default under the Liquidity Facility (whether or not
such event is within the control of the Issuer Trustee) if:
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(1) at any time the Available Liquidity Amount is zero, and the
Issuer Trustee fails to pay an amount payable by it under the Liquidity
Facility within 10 Business Days of its due date;
(2) an amount is available for payment to the Liquidity Facility
Provider under the Liquidity Facility and the Issuer Trustee does not pay
that amount;
(3) an Insolvency Event occurs in relation to the Trust;
(4) an Insolvency Event occurs in relation to the Issuer Trustee, and
a successor trustee of the Trust is not appointed within 30 days of that
Insolvency Event;
(5) the Termination Date occurs in relation to the Trust; or
(6) all or any part of the Liquidity Facility is terminated or is or
becomes void, illegal, invalid or unenforceable.
Consequences of Default
In addition to rights provided by law or any Transaction Document, at
any time after an event of default has occurred under the Liquidity Facility
(whether or not it is continuing), the Liquidity Facility Provider may do all
or any of the following by notice to the Issuer Trustee and the Trust
Manager:
(1) declare all moneys actually or contingently owing at that time
immediately due and payable, and the Issuer Trustee must immediately pay
the total amount of all outstanding Liquidity Draws, together with accrued
interest and fees and all other such moneys; and
(2) cancel the Liquidity Limit with effect from any date specified in
that notice.
Termination
The Liquidity Facility will terminate on the earliest of the following to
occur:
(1) the date on which the Issuer Trustee enters into a replacement
liquidity facility as previously notified to the Rating Agencies;
(2) one month after the Notes have been redeemed in full in
accordance with the Master Trust Deed;
(3) following an event of default under the Liquidity Facility, the
date on which the Liquidity Facility Provider declares the Liquidity
Facility terminated; and
(4) the date on which the Issuer Trustee has cancelled the Liquidity
Limit in full.
Cancellation of the Liquidity Limit is conditional on the Rating
Agencies confirming that such cancellation will not result in a downgrade,
withdrawal or qualification of the credit rating assigned by the Rating
Agencies to the Offered Notes.
DESCRIPTION OF THE SWAP AGREEMENTS
Description of Interest Rate Swap Agreements
The following section contains a summary of the material terms of the
Swap Agreements, which the Issuer Trustee will enter into with the Interest
Rate Swap Provider. The summary does not purport to be complete and is
subject to the provisions of the Swap Agreements.
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Fixed Rate and Variable Rate Basis Swaps
The Issuer Trustee will enter into a Variable Rate Basis Swap and two
Fixed Rate Basis Swaps with Westpac, in its capacity as the provider of the
Variable Rate Basis Swap and Westpac, in its capacity as the provider of the
Fixed Rate Basis Swaps (together the "Interest Rate Swap Provider"). Each
swap will be governed by an ISDA Master Agreement, as amended by a
supplementary schedule and confirmed by a written confirmation. All such
documents will be governed by the laws of the state of New South Wales. See
"ORIGINATOR OF THE HOUSING LOANS" for a description of the Interest Rate Swap
Provider.
A Variable Rate Basis Swap will be used to hedge the basis risk between
the floating rate obligations of the Trust (including Interest payable on the
Notes) and the variable rate set, as permitted by the relevant Housing Loan
agreements, at the discretion of Westpac. The Variable Rate Basis Swap will
include those loans with a concessional fixed rate of interest for the first
12 months, converting to the standard variable rate after that period. The
Issuer Trustee will pay an amount based on the applicable daily weighted
average variable interest rates on Housing Loans with a variable rate and
receive the Bank Bill Rate (as defined herein) plus a fixed margin. The
margin is fixed for the life of the swap and has been set having regard to
the ongoing obligations of the Trust.
Two Fixed Rate Basis Swaps will be used to hedge the basis risk between
the floating rate obligations of the Trust (including Interest payable on the
Notes) and the discretionary fixed rates set by Westpac on the Housing Loans
which are subject to a fixed rate of interest (not including those loans with
a concessional fixed rate of interest for the first 12 months, which converts
to the standard variable rate after that period).
The first Fixed Rate Basis Swap will be used to hedge the basis risk
occurring when Borrowers switch from a variable rate of interest to a Fixed
Rate of interest after the Cut-Off Date. The Issuer Trustee will pay the
applicable daily weighted average Fixed Rate on Housing Loans that have
converted to a Fixed Rate since the Cut-Off Date and the Interest Rate Swap
Provider will pay the Bank Bill Rate plus a fixed margin. The margin is fixed
for the life of the swap and has been set having regard to the ongoing
obligations of the Trust.
The second Fixed Rate Basis Swap will be entered into as at the Closing
Date to hedge those Housing Loans subject to a Fixed Rate of interest as of
the Cut-Off Date. The Issuer Trustee will pay the applicable daily weighted
average Fixed Rate on Housing Loans that are Fixed Rate and the Interest Rate
Swap Provider will pay the Bank Bill Rate plus a fixed margin. The margin is
fixed for the life of the swap and has been set based on the actual margin on
the Fixed Rate Housing Loans and the prevailing wholesale market rate
existing at or about the Cut-Off Date.
[All Housing Loans being charged a Fixed Rate of interest as of the Cut-Off
Date have a maximum Fixed Rate period of 5 years.]
Downgrade of Interest Swap Provider
If there is a downgrading of the Interest Rate Swap Provider's short
term debt rating below A-1+, A2 or F-1+ by either Standard & Poor's, Moody's
or Fitch, respectively, the Interest Swap Provider will either:
(1) provide cash collateral security sufficient to enable Standard &
Poor's, Moody's and Fitch to confirm that the downgrade will not cause a
reduction in or a withdrawal of the rating of the Notes; or
(2) arrange for a suitably rated counterparty to intermediate the
swap or act as substitute swap provider.
Termination
The following events are events of default under the Interest Rate Swap
Agreements: (i) failure by Westpac or the Issuer Trustee to make, when due,
any payment or delivery required by the agreement and such failure is not
remedied by the tenth local business day; and (ii) an Insolvency Event has
occurred in respect of Westpac or the Issuer Trustee; provided, however, that
an Insolvency Event in relation to the Issuer Trustee in its personal
capacity is not an event of
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default if the relevant Swap is novated within 30 Business Days of that
Insolvency Event and the novation will not cause a reduction or withdrawal of
the rating of the Offered Notes. Upon novation of the Swap, the successor
Issuer Trustee will assume the rights and obligations of the Issuer Trustee
under the Interest Rate Swap.
An event which constitutes illegality will be a termination event under
the Interest Rate Swap Agreements. If there is a downgrading of the Interest
Rate Swap Provider's short term debt rating below A-l+, A2 or F-1+ by either
Standard & Poor's, Moody's or Fitch, respectively, and the Interest Rate Swap
Provider fails to act, as described in "--Downgrade of Interest Swap
Provider" above, it will be an "Additional Termination Event" under the
Variable Rate Basis Swap. If under similar circumstances the Interest Rate
Swap Provider fails to establish certain collateral arrangements it will be
an "Additional Termination Event" under each of the Fixed Rate Basis Swaps
only at the discretion of the Issuer Trustee. The "Automatic Early
Termination" provisions under the Fixed and Variable Rate Basis Swaps do not
apply.
Upon the termination of an Interest Rate Basis Swap, a termination
payment calculated pursuant to the Loss Method (as defined in such Interest
Rate Basis Swap) will be due to be paid by the Issuer Trustee to the Interest
Rate Swap Provider or by the Interest Rate Swap Provider to the Issuer
Trustee. The termination payment with respect to the Variable Rate Basis Swap
will be zero. The Issuer Trustee may look to any cash collateral security
posted by the Interest Rate Swap Provider relating to the terminated Interest
Rate Basis Swap for satisfaction of the Interest Rate Swap Provider's
termination payment.
Novation
Upon the novation of a Interest Rate Swap Agreement, either the Interest
Rate Swap Provider will pay to the substitute Interest Rate Swap Provider an
up-front premium or the substitute Interest Rate Swap Provider will pay to
the Interest Rate Swap Provider an up-front premium to preserve the economic
equivalent of the mark-to-market value of the swap transaction as of the date
of novation. The Issuer Trustee will not bear any risk with respect to the
novation of an Interest Rate Swap unless the Interest Rate Swap Provider is
unable to pay any required up-front premium and there is insufficient cash
collateral security posted with respect to such Interest Rate Swap to cover
such premium.
Threshold Rate
If at any time the Variable Rate Basis Swap is terminated, the Trust
Manager must, on each Collection Determination Date following that
termination, calculate the minimum rate of interest that must be set on the
Housing Loans which are subject to a discretionary variable rate, in order to
cover (assuming all counterparties to the Transaction Documents, the Housing
Loans and any Mortgages and other relevant documents meet their obligations),
when aggregated with the income produced by all other Housing Loans and
taking into account the other Swap Agreements, the obligations of the Trust
(the "Threshold Rate"). If the Servicer is notified of the Threshold Rate, it
is required, subject to the terms of the relevant Housing Loans, to ensure
that the rate of interest on each relevant discretionary variable rate
Housing Loan is not less than the Threshold Rate (see "DESCRIPTION OF THE
SERVICING AGREEMENT" above).
Description of Currency Swaps
The following sections contain a summary of the material terms of the
Currency Swaps, which the Issuer Trustee will enter into with Morgan Guaranty
Trust Company of New York, acting through its London Branch ("Morgan
Guaranty") and Westpac (together, the "Currency Swap Providers" and together
with the Interest Rate Swap Provider, the "Swap Providers"). The summary does
not purport to be complete and is subject to the provisions of the Currency
Swaps. The Currency Swaps are provided on a "joint and several" basis by
Westpac and Morgan Guaranty. See "--Cross Support."
Collections in relation to the Housing Loans and related Mortgages and
under the Variable Rate Basis Swap and the Fixed Rate Basis Swaps will be
denominated in Australian dollars. However, the payment obligations of the
Issuer Trustee in relation to Interest and principal on the Offered Notes are
denominated in United States dollars. To hedge its currency exposure, the
Issuer Trustee will enter into four distinct swap transactions, relating to
the Class A Notes and the Class B Notes, respectively (together, the
"Currency Swaps") with the Currency Swap Providers. The Currency
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Swaps will be governed by an ISDA Master Agreement dated on or about
[June 10, 1998], by and between the Issuer Trustee and Morgan Guaranty
(governed by English law) and an ISDA Master Agreement dated on or about
[June 10, 1998], by and between the Issuer Trustee and Westpac (governed by
Australian law) respectively. Each ISDA Master Agreement will be amended by a
schedule thereto. Each swap transaction will be confirmed by a written
confirmation (such ISDA Master Agreements, the schedules thereto and the
related swap confirmations, the "Currency Swaps").
Under the Currency Swaps, the Issuer Trustee is required to pay to the
Currency Swap Providers on each Payment Date amounts in A$ equal to a certain
percentage of the amount of any Principal Collections to be paid to the Class
A and Class B Noteholders received by the Issuer Trustee (the percentage
being that which is described in the section entitled "DESCRIPTION OF THE
OFFERED NOTES--Payments of Principal on the Notes") and the Currency Swap
Providers are required to pay to or at the direction of the Issuer Trustee an
amount denominated in US$ which is equivalent to such A$ payment (calculated
by reference to an exchange rate which is fixed at the Closing Date and set
forth in the related swap confirmations). In addition, under the Currency
Swaps on each Payment Date the Issuer Trustee will make A$ floating rate
payments to the Currency Swap Providers and the Currency Swap Providers will
make US$ floating rate payments which are equivalent in amount to the
Interest payable in US$ to the Offered Noteholders. If on any Payment Date,
the Issuer Trustee does not or is unable to make the full floating payment,
the US$ floating rate payment to be made by the Currency Swap Providers on
such Payment Date will be reduced by the same proportion as the reduction in
the payment from the Issuer Trustee.
Subscription amounts for the Offered Notes will be paid by investors in
US$, but the consideration for the purchase by the Issuer Trustee of
equitable title to the Housing Loans and related Mortgages will be in A$.
Under the Currency Swaps, an amount equal to the US$ subscription amounts
will be paid to the Currency Swap Providers, which will pay the A$ Equivalent
of such amounts to the Issuer Trustee.
On the Closing Date the Issuer Trustee will be obliged to pay to the
Currency Swap Providers an amount equal to the proceeds of the issue of the
Offered Notes in US$. In return the Issuer Trustee will be paid the A$
equivalent of that US$ amount (calculated by reference to an exchange rate
which is fixed by the Closing Date (in the swap confirmations)).
The Series Notice requires that the Issuer Trustee direct the Currency
Swap Providers to pay all US$ amounts to the Principal Paying Agent or the
US$ Account. All US$ amounts shall be paid to the Offered Noteholders in
accordance with their entitlements and the priorities set out in "DESCRIPTION
OF THE OFFERED NOTES."
Termination of the Currency Swaps by the Currency Swap Providers
Under the Currency Swaps each Currency Swap Provider shall have the
right to terminate its currency swap in the following circumstances:
(1) If the Issuer Trustee fails to make a payment under the Currency
Swap within the 10 Business Days.
(2) If due to change in law it becomes illegal for the Issuer Trustee
or a Currency Swap Provider to make or receive payments or comply with any
other material provision of the Currency Swaps, the Currency Swap requires
such party to make certain efforts to transfer its rights and obligations
to another office or another affiliate to avoid this illegality (so long as
the transfer would not result in a downgrade of the rating of the Notes).
If those efforts are not successful then the applicable Currency Swap
Provider will have the right to terminate. These provisions relating to
termination following an illegality have been modified so that they are not
triggered by the introduction of certain exchange controls by any
Australian Government body.
(3) The Currency Swap Providers have the limited right to terminate
where it is required to gross-up or receive payments from which amounts
have been withheld if the Note Trustee is satisfied that the Noteholders
will be paid in full.
(4) An Insolvency Event with respect to the Issuer Trustee occurs.
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(5) Any Event of Default occurs and an Extraordinary Resolution of
the Voting Mortgagees is passed directing the Security Trustee to take
certain actions.
Termination of the Currency Swaps by the Issuer Trustee
There are a number of circumstances in which the Issuer Trustee has the
right to terminate the Currency Swaps with respect to a Swap Provider. In each
of these cases it is only permitted to exercise that right with the prior
written consent of the Note Trustee:
(1) Where the Currency Swap Providers fail to make a payment under
the Currency Swap within 10 Business Days or the Currency Swap Providers
become insolvent or merge into another entity without that entity properly
assuming responsibility for the obligations of the Currency Swap Providers
under the Currency Swaps.
(2) If it becomes illegal for either party to make or receive
payments under the Currency Swap or perform any of its other material
obligations under it, both the Issuer Trustee and the Currency Swap
Providers are obliged to make certain efforts to transfer their rights and
obligations to avoid that illegality. If those efforts fail the Currency
Swaps may be terminated.
(3) If the Issuer Trustee becomes obliged under the Currency Swaps to
receive payments from which amounts have been withheld or deducted
(including where this situation arises from a merger affecting the Currency
Swap Providers).
(4) If the Issuer Trustee becomes obliged to make a withholding or
deduction in respect of the Offered Notes and, as a result, the Offered
Notes are redeemed.
The Issuer Trustee (and the Note Trustee) may only terminate the Currency
Swaps following prior consultation by the Note Trustee with the Currency Swap
Providers as to the timing of termination. The Issuer Trustee will exercise such
right to terminate at the direction of the Trust Manager. The Currency Swap
Providers acknowledge that the Trust Manager will perform the day to day
management of the Trust and may exercise or satisfy any of the Issuer Trustee's
rights or obligations under the Currency Swap.
Termination Payments
On the Termination Date or the Early Termination Date (each as defined in
the Currency Swaps) in respect of the Currency Swaps, a termination payment will
be due to be paid by the Issuer Trustee to the Currency Swap Providers or to the
Issuer Trustee by the Currency Swap Providers in respect of the Currency Swaps.
The termination of a Currency Swap is an Event of Default under the Security
Trust Deed. If the Security Trust Deed is enforced after such Events of Default,
there is no guarantee that upon any such termination the funds realized from the
sale of the relevant Loans and Mortgages plus or minus (as the case may be) the
termination payment due in respect of the Currency Swaps will be sufficient to
pay in full amounts owing to the holders of the relevant Notes.
The termination payment in respect of a Currency Swap will be determined on
the basis of quotations from four leading dealers in the relevant market
(selected by the Currency Swap Providers) to enter into a replacement
transaction that would have the effect of preserving the economic equivalent of
any payment that would, but for the early termination, have been required under
the terms of the Currency Swap.
Replacement of Currency Swaps
If the Currency Swaps are terminated with respect to a Currency Swap
Provider, the Issuer Trustee may (at the direction of the Trust Manager) enter
into one or more currency swaps which replaces the terminated Currency Swap
(other than by way of transfer to avoid termination of the swap) (a "Replacement
Currency Swap") but only on the condition that the Settlement Amount (as defined
in the ISDA Master Agreement) payable (if any) by the Issuer Trustee to the
Currency Swap Provider upon termination of the original Currency Swap will be
paid in full when due in
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accordance with the Series Notice and the Currency Swap. If the condition in the
previous sentence is satisfied, the Issuer Trustee may enter into the
Replacement Currency Swap and if it does so it must direct the premium payable
by the provider of the Replacement Currency Swap to be paid directly to the
applicable Currency Swap Provider in satisfaction of and to the extent of the
Issuer Trustee's obligation to pay the termination payment to such Currency Swap
Provider. If such premium paid by the Replacement Swap Provider is less than the
Settlement Amount due to the Currency Swap Provider, the balance may be
satisfied by the Issuer Trustee as a Trust Expense.
Downgrade of Currency Swap Providers
Each Currency Swap Provider, severally, will give a commitment to provide
collateral in respect of the Currency Swap to which it is a party in the event
that the rating that is given to senior debt which is jointly supported by the
two Currency Swap Providers is ever downgraded below a specified level, such
that Moody's would downgrade the rating on the Class A Notes.
Cross Support
Each Currency Swap Provider has agreed to pay on demand of the Issuer
Trustee to or at the direction of the Issuer Trustee any amounts that the other
Currency Swap Provider is required to pay pursuant to the relevant Currency Swap
but has failed to pay. So long as a Currency Swap Provider pays such amounts,
the Issuer Trustee shall not be entitled to terminate the relevant Currency Swap
with respect to such default. In any case, a Currency Swap Provider may, in
certain circumstances, elect to replace the defaulting other Currency Swap
Provider with itself or another suitably rated party approved by the Issuer
Trustee, the Trust Manager and the Note Trustee.
CURRENCY SWAP PROVIDERS
Morgan Guaranty Trust Company of New York, acting through its London
Branch, and Westpac are joint providers of the Currency Swaps.
Morgan Guaranty Trust Company of New York, a Delaware corporation whose
principal office is located in New York, New York ("Morgan Guaranty"), is a
wholly owned subsidiary and the principal asset of J.P. Morgan & Co.
Incorporated ("J.P. Morgan"). Morgan Guaranty is a commercial bank offering a
wide range of banking services to its customers both domestically and
internationally. Its business is subject to examination and regulation by
Federal and New York State banking authorities. As of December 31, 1997, Morgan
Guaranty and its subsidiaries had total assets of $196.4 billion, total net
loans of $30.9 billion, total deposits of $60.7 billion, and stockholder's
equity of $10.4 billion. As of December 31, 1996, the Currency Swap Provider and
its subsidiaries had total assets of $164.8 billion, total net loans of $27.4
billion, total deposits of $53.1 billion and stockholder's equity of $9.9
billion.
The Consolidated Statement of Condition of Morgan Guaranty as of
December 31, 1997 is set forth on page 11 of Exhibit 99b to Form 8-K dated
January 15, 1998, as filed by J.P. Morgan with the Commission. Morgan Guaranty
will provide without charge to each person to whom this Prospectus is delivered,
on the request of any such person, a copy of the Form 8-K referred to above.
Written requests should be directed to: Morgan Guaranty Trust Company of New
York, 60 Wall Street, New York, New York 10260-0060, Attention: Office of the
Secretary.
For a description of Westpac, see "ORIGINATOR OF THE HOUSING LOANS".
The information with respect to the Currency Swap Providers contained
herein has been obtained from the Currency Swap Providers. The delivery of this
Prospectus will not create any implication that there has been no change in the
affairs of the Currency Swap Providers since the date hereof or that the
information contained or referred to herein is correct as of any time subsequent
to its date. The Currency Swap Providers have not had any involvement in the
preparation of any part of this Prospectus, other than the information with
respect to the Currency Swap Providers set forth in this section and under the
heading "DESCRIPTION OF THE SWAP AGREEMENTS--Description of Currency Swap." The
Currency Swap Providers make no statement or representation in this Prospectus
(other than the information referred to above), have not authorized or caused
the issue of any part of it and take no responsibility for any part of it.
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The Offered Notes do not represent an obligation of the Currency Swap
Providers, J.P. Morgan Securities Inc., J.P. Morgan or any of their respective
affiliates. Holders of the Offered Notes will not have any right to proceed
directly against the Currency Swap Providers in respect of the Currency Swap
Providers' obligations under the Currency Swaps.
CERTAIN LEGAL ASPECTS OF THE HOUSING LOANS
The following discussion contains summaries of legal aspects of Australian
retail housing loans and mortgages that are general in nature. The summaries do
not purport to be complete. In addition, certain of those legal aspects are
governed by the law of the applicable State or Territory (which laws may differ
substantially between States and Territories) and the summaries do not reflect
the particular laws of any particular state or encompass all relevant laws of
all states in which any Mortgaged Property may be situated. The summaries are
subject to the applicable Australian federal and state laws governing real
property and the granting and enforcement of security over real property.
General
Generally each Housing Loan will be secured by a mortgage which has a first
ranking priority over all other mortgages granted by the relevant Borrower and
over all unsecured creditors of the Borrower (except in respect of certain
statutory rights such as some rates and taxes, which are granted statutory
priority or if the Housing Loan is not secured by a first ranking mortgage the
Approved Seller will assign to the Issuer Trustee all prior ranking registered
mortgages in relation to that Housing Loan). The Borrower is prohibited under
its loan documents from creating another mortgage or other security interest
over the relevant Mortgaged Property without the consent of Westpac. There are
two parties to a mortgage, the mortgagor, who is the borrower and homeowner (or,
where the relevant loan is guaranteed and the guarantee is secured by a
mortgage, the guarantor) and who grants the mortgage over their property, and
the mortgagee who is the lender.
Nature of Housing Loans as Security
There are a number of different forms of title to land in Australia. The
most common forms of title in Australia, and the only form of title which may
constitute Mortgaged Property is "Torrens title."
Torrens title
"Torrens title" land is freehold or leasehold title, interests in which are
created by registration in one or more central land registries of the relevant
State or Territory. Each parcel of land is represented by a specific certificate
of title. The original certificate is retained by the registry, and in most
States a duplicate certificate is issued to the owner. Any dealing with the
relevant land is carried out by pro forma instruments which become effective on
registration.
Ordinarily the relevant certificate of title (or any registered plan
referred to in it) will reveal the position and dimensions of the land, the
present owner, and any leases, mortgages and registered easements to which it is
subject. The certificate is conclusive evidence (except in limited
circumstances, such as fraud) of the matters stated in it.
Strata title
"Strata title" was developed to facilitate the creation of, and dealings
with, apartment units (which are similar to condominiums in the United States)
and is governed by the legislation of the State or Territory in which the
property is situated. Under strata title, each proprietor has title to, and may
freely dispose of, their unit. All proprietors are members of a "body
corporate", which is vested with the control, management and administration of
the common property and the strata scheme generally, for the benefit of the
proprietors, including the rules governing the apartment block. Certain parts of
the property, such as the land on which the building is erected, the stairwells,
entrance lobbies and the like are known as "common property" and are held by the
body corporate for the benefit of the individual proprietors.
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Only Torrens title land can be the subject of strata title in this way, and
so the provisions referred to in this section in relation to Torrens title apply
to the title in a unit held by a strata proprietor.
Urban Leasehold
All land in the Australian Capital Territory is owned by the Commonwealth
of Australia and is subject to a leasehold system of land tenure. Mortgaged
Property in that jurisdiction comprises a Crown lease and developments on the
land are subject to that lease. Any such lease:
(a) cannot have a term exceeding 99 years, although the term can be
extended under a straightforward administrative process in which the only
qualification to be considered is whether the land may be required for a
public purpose; and
(b) where they involve residential property are subject to a nominal rent
of 5 cents per annum on demand.
As with other Torrens title land, the Borrower's leasehold interest in the
land is entered in a central register and the Borrower may deal with their
leasehold interest (including granting a mortgage over the property) without
consent from the government.
In all cases where Mortgaged Property consists of a leasehold interest, the
unexpired term of the lease exceeds the term of the Housing Loan secured by that
Mortgaged Property.
Leasehold property may become subject to native title claims. Native title
has only quite recently been recognised by Australian courts. Native title to
particular property is based on the traditional laws and customs of indigenous
Australians and is not necessarily extinguished by grants of Crown leases over
that property. The extent to which native title exists over property (including
property subject to a Crown lease) depends on how that property was previously
used by the indigenous claimants asserting native title, and whether the native
title has been extinguished by the granting of the leasehold interest. If the
lease confers the right of exclusive possession over the property (which is
typically the case with residential leases), the current view is that native
title over the relevant property should be extinguished. Whether a lease confers
exclusive possession will depend on a construction of the lease and the
legislation under which the lease was granted.
Housing Loans secured by Mortgaged Property which is secured by a leasehold
interest in the Australian Capital Territory represents only approximately ____%
(by value) of all Housing Loans.
Taking Security Over Land
The law relating to the granting of securities over real property is made
complex by the fact that each State and Territory has separate governing
legislation. The following is a brief overview of general issues involved in
taking security over land.
Under Torrens title, registration of a mortgage using the prescribed form
executed by the mortgagor is required in order for the mortgagee to obtain the
remedies of a mortgagee granted by statute and the relevant priorities against
other secured creditors. To this extent the mortgagee is said to have a legal
(i.e., registered) title. However, registration does not transfer title in the
property--the mortgagor remains as legal owner. Rather, the Torrens mortgage
operates as a statutory charge. The mortgagee does not obtain an estate in the
property but does have an interest in the land which is marked on the register
and the "certificate of title" for the property. A search of the register by any
subsequent lender will reveal the existence of the prior mortgage.
In most States and Territories, a mortgagee will retain a duplicate
certificate of title (which mirrors the original certificate of title held at
the relevant land registry office). Although the certificate is not a document
of title as such, the procedure for replacement is sufficiently onerous to act
as a deterrent against most mortgagor fraud. Failure to retain the
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certificate may in certain circumstances constitute negligent conduct resulting
in a postponement of the mortgagee's priority to a later secured creditor.
In Queensland, under the Land Title Act 1994, duplicate certificates of
title are no longer issued to mortgagees as a matter of practice. A record of
the title is stored on computer at the land registry office and the mortgage is
registered on that computerized title.
Once the mortgagor has repaid the debt, a discharge executed by the
mortgagee is lodged with the registrar by the mortgagor or the mortgagee and the
mortgage is noted as having been released.
Westpac as Mortgagee
Westpac is, and until a Title Perfection Event occurs intends to remain,
the registered mortgagee of all the Mortgages. The relevant Borrowers will not
be aware of the equitable assignment of the Housing Loans and Mortgages to the
Issuer Trustee.
Prior to any Title Perfection Event Westpac, or the Servicer on its behalf,
will undertake any necessary enforcement action with respect to defaulted
Housing Loans and Mortgages. Following a Title Perfection Event, the Issuer
Trustee is entitled (under an irrevocable power of attorney granted to it by
Westpac) to be registered as mortgagee of the Mortgages. Until that registration
is achieved, the Issuer Trustee or the Trust Manager is entitled to lodge
caveats on the register to notify its interest publicly.
Enforcement of Housing Loans
Subject to the discussion below, if a Borrower defaults under a Housing
Loan, the loan documents provide that all moneys under the loan may be declared
immediately due and payable. In Australia, a lender may sue to recover all
outstanding principal, interest and fees under the personal covenant of a
borrower contained in the loan documents to repay those amounts. In addition,
the lender may enforce a registered mortgage in relation to the defaulted loan.
Enforcement may occur in a number of ways, including the following:
(a) The mortgagee may enter into possession of the property. If it
does so, it does so in its own right and not as agent of the mortgagor, and
so may be personally liable for mismanagement of the property and to third
parties as occupier of the property;
(b) The mortgagee may, in limited circumstances, lease the property
to third parties;
(c) The mortgagee may foreclose on the property--that is, extinguish
the mortgagor's title to the property so that the mortgagee becomes the
absolute owner of the property (a remedy that is, because of procedural
constraints, rarely used). If the mortgagee forecloses on the property, it
loses the right to sue the borrower under the personal covenant to repay
and can look only to the value of the property for satisfaction of the
debt;
(d) The mortgagee may appoint a receiver to deal with income from the
property or exercise certain other rights delegated to the receiver by the
mortgagee. Unlike a mortgagee in possession, a receiver is the agent of the
mortgagor and so in theory the mortgagee is not liable for the receiver's
acts or as occupier of the property. In practice, the receiver will require
indemnities from the mortgagee that appoints it; or
(e) The mortgagee may sell the property, subject to various duties to
ensure that the mortgagee exercises proper care in relation to the sale.
This power of sale is usually expressly contained in the mortgage
documents, and is also implied into registered mortgages under the relevant
Torrens title legislation. The Torrens title legislation prescribes forms
and periods of notice to be given to the mortgagor prior to enforcement.
A sale under a mortgage may be by public auction or private treaty. Once
registered, the purchaser of property sold pursuant to a mortgagee's power of
sale becomes absolute owner of the property.
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A mortgagee's ability to call all amounts under a housing loan or enforce a
mortgage which is subject to the Consumer Credit Legislation is limited by
various demand and notice procedures which are required to be followed. For
example, as a general rule enforcement cannot occur unless the relevant default
is not remedied within 30 days after a default notice is given. Borrowers may
also be entitled to initiate negotiations with the mortgagee for a postponement
of enforcement proceedings.
Penalties and Prohibited Fees
Australian courts will not enforce an obligation of a borrower to pay
default interest on delinquent required payments if the court determines that
the relevant default interest rate is a penalty. Certain jurisdictions prescribe
a maximum recoverable interest rate, although in most jurisdictions there is no
specified threshold rate to determine what is a penalty. In those circumstances,
whether a rate is a penalty or not will be determined by reference to such
factors as the prevailing market interest rates. The Consumer Credit Legislation
does not impose a limit on the rate of default interest, but a rate which is too
high may entitle the borrower to have the loan agreement re-opened on the ground
that it is unjust. Under the Corporations Law, the liquidator of a company may
avoid a loan under which an extortionate interest rate is levied.
The Consumer Credit Legislation requires that any fee or charge to be
levied by the lender must be provided for in the contract, otherwise it cannot
be levied. The regulations under the Consumer Credit Legislation may also from
time to time prohibit certain fees and charges. The Consumer Credit legislation
also requires that establishment fees, termination fees and prepayment fees must
be reasonable otherwise they may be reduced or set aside.
Consumer Credit Legislation
Some of the Housing Loans are regulated by consumer credit legislation (the
"Consumer Credit Legislation"). Under that legislation, a Borrower has the right
to apply to a court to:
(1) vary the terms of his or her Housing Loan on the grounds of
hardship or that it is an unjust contract;
(2) reduce or cancel any interest rate payable on the Housing Loan
which is unconscionable;
(3) have certain provisions of the Housing Loan or relevant Mortgage
which are in breach of the legislation declared unenforceable; or
(4) obtain restitution or compensation from either Westpac or,
following a Title Perfection Event, the Issuer Trustee, in relation to any
breaches of the Consumer Credit Legislation in relation to the Housing Loan
or relevant Mortgage.
Any such order may affect the timing or amount of interest or principal
payments or repayments under the relevant Housing Loan (which might in turn
affect the timing or amount of Interest or principal payments or repayments
under the Offered Notes).
In addition, a mortgagee's ability to enforce a mortgage which is subject
to the Consumer Credit Legislation is limited by various demand and notice
procedures which are required to be followed. For example, as a general rule
enforcement cannot occur unless the relevant default is not remedied within 30
days after a default notice is given. Borrowers may also be entitled to initiate
negotiations with the mortgagee for a postponement of enforcement proceedings.
Such procedures and negotiations may also affect the timing or amount of
interest or principal payments or repayments under the Housing Loans.
Breaches of the Consumer Credit Legislation may also lead to civil
penalties or criminal fines being imposed on Westpac, for so long as it holds
legal title to the Housing Loans and the Mortgages. If the Issuer Trustee
acquires legal title, it will then become primarily responsible for compliance
with the Consumer Credit Legislation. The Issuer Trustee will (subject to
limited exceptions) be indemnified out of the assets of the Trust for its
liabilities under the Consumer
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Credit Legislation. If the Issuer Trustee is indemnified with respect to such
liabilities out of the assets of the Trust, proceeds of the Trust may be
insufficient to make all payments provided for under the Offered Notes.
Westpac will give, or has given, certain representations and warranties
that the Housing Loans and related Mortgages comply in all material respects
with the Consumer Credit Legislation in force at the time documents were entered
into. The Servicer has undertaken to comply with the Consumer Credit Legislation
in connection with servicing the Housing Loans and related Mortgages where
failure to do so would have an Adverse Effect. An "Adverse Effect" is an event
which will materially and adversely affect the amount of any payment to be made
to any Noteholder, or will materially and adversely affect the timing of such
payment. In certain circumstances the Issuer Trustee may have the right to claim
damages from Westpac or the Servicer, as the case may be, where the Issuer
Trustee suffers a loss in connection with a breach of the Consumer Credit
Legislation which is caused by a breach of a relevant representation or
undertaking.
Bankruptcy
The insolvency of a natural person is governed by the provisions of the
Bankruptcy Act 1966, which is a federal statute. Generally, secured creditors of
a natural person (such as mortgagees under real property mortgages) stand
outside the bankruptcy--that is, the property of the bankrupt which is available
for distribution by the trustee in bankruptcy does not include the secured
property. The secured creditor may, if it wishes, prove in the bankruptcy
proceeding as an unsecured creditor in a number of circumstances, including if
they have realized the related mortgaged property and their debt has not been
fully repaid (in which case they can prove for the unpaid balance).
Certain dispositions of property by a bankrupt may be avoided by the
trustee in bankruptcy. These include where (a) the disposition was made to
defraud creditors; or (b) the disposition was made by an insolvent debtor within
6 months of the petition for bankruptcy and gave a preference to an existing
creditor over at least one other creditor.
The insolvency of a company is governed by the Corporations Law of the
relevant Australian jurisdiction. Again, secured creditors generally stand
outside the insolvency. However, a liquidator may avoid a mortgage which is
voidable under the Corporations Law because it is an uncommercial transaction,
or an unfair preference to a creditor or a transaction for the purpose of
defeating creditors, and that transaction occurred when the company was
insolvent (or an act is done to give effect to the transaction when the company
is insolvent, or the company becomes insolvent because of the transaction or the
doing of an act to give effect to the transaction), and the transaction occurred
within a prescribed period prior to the commencement of the winding up of the
company. The liquidator may also avoid a loan under which an extortionate
interest rate is levied.
Environmental
Real property which is mortgaged to a lender may be subject to unforeseen
environmental problems, including land contamination. Environmental legislation
which deals with liability for such problems exists at both state and federal
levels, although the majority of relevant legislation is imposed by the states.
No Australian statute expressly imposes liability on "passive" lenders or
security holders for environmental matters, and some states expressly exclude
such liability. However, liability in respect of environmentally damaged land
(which liability may include the cost of rectifying the damage) may attach to a
person who is, for instance, an owner, occupier or person in control of the
relevant property. In some but not all states, lenders are expressly excluded
from the definitions of one or more of these categories.
Merely holding security over property will not convert a lender into an
occupier. However, a lender or receiver who goes into possession of contaminated
mortgaged property or otherwise enforces its security may be liable as an
occupier.
Some environmental legislation provides that security interests may be
created over contaminated or other affected property to secure payment of the
costs of any necessary rectification of the property. The security interests may
have priority over pre-existing mortgages.
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Insolvency Considerations
The current transaction is designed to minimize insolvency risk. For
example, the equitable assignment of the Housing Loans by Westpac to the Issuer
Trustee should ensure that the Housing Loans are not assets available to the
liquidator or creditors of Westpac in the event of an insolvency of Westpac.
Similarly, the assets in the Trust should not be available to other creditors of
the Issuer Trustee in its personal capacity or as trustee of any other trust in
the event of an insolvency of the Issuer Trustee.
If any Insolvency Event occurs with respect to the Issuer Trustee, the
Security Trust Deed may be enforced by the Security Trustee at the direction of
the Voting Mortgagees (see "SECURITY FOR THE NOTES--Enforcement"). The security
created by the Security Trust Deed will stand outside any liquidation of the
Issuer Trustee, and the assets the subject of that security will not be
available to the liquidator or any creditor of the Issuer Trustee (other than a
creditor which has the benefit of the Security Trust Deed) in priority to the
Security Trust Deed. The proceeds of enforcement of the Security Trust Deed are
to be applied by the Security Trustee as set out in "SECURITY FOR THE
NOTES--Priorities under the Security Trust Deed". If the proceeds from
enforcement of the Security Trust Deed are not sufficient to redeem the Notes in
full, some or all of the Noteholders will incur a loss.
Treatment of Interest Payments with respect to Australian Housing Loans
Under Australian law, interest on loans used to purchase a person's primary
place of residence is not ordinarily deductible for taxation purposes.
Conversely, interest payments on mortgage loans and other non-capital
expenditures relating to investment properties that generate taxable income are
generally allowable as tax deductions.
USE OF PROCEEDS
The net proceeds from the sale of the Offered Notes will amount to
A$_______________ and will be used by the Issuer Trustee to acquire equitable
title to the Housing Loans and related Mortgages from the Approved Sellers and
for general expenses (including any premium payable to any Swap Provider) in
relation to the Trust.
UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following is a general discussion of the anticipated material United
States federal income tax consequences of the purchase, ownership and
disposition of Offered Notes by Noteholders who are subject to United States
federal income tax. The summary is based on laws, regulations, rulings and
decisions now in effect, all of which are subject to change (possibly with
retroactive effect) or to different interpretation. The summary does not purport
to address federal income tax consequences applicable to particular categories
of investors, some of which (for example, insurance companies, dealers in
securities, financial institutions or foreign investors) may be subject to
special rules. In addition, this summary is generally limited to investors who
will hold the Notes as "capital assets" (generally, property held for
investment) within the meaning of Section 1221 of the Internal Revenue Code of
1986, as amended (the "Code"). Investors are urged to consult their own tax
advisors with regard to the application of the tax considerations discussed
below to their particular situations, as well as the consequences to them under,
state, local, non-United States and any other tax law of the purchase, ownership
and disposition of the Offered Notes, including the advisability of making any
election discussed below. Prospective investors should note that no rulings have
been or will be sought from the Internal Revenue Service (the "IRS" or the
"Service") with respect to any of the federal income tax consequences discussed
below, and no assurance can be given that the IRS will not take contrary
positions. It is anticipated that the Issuer Trustee will not be indemnified for
any United States federal income taxes that may be imposed upon it, and the
imposition of any such taxes on the Trust could result in a reduction in the
amounts available for distribution to the Noteholders.
In the opinion of Mayer, Brown & Platt, tax counsel to the Issuer Trustee
("Tax Counsel"), for United States federal income tax purposes, the Offered
Notes will be characterized as debt of the Issuer Trustee. Each Noteholder, by
the acceptance of an Offered Note, will agree to treat the Offered Notes as
indebtedness for federal income tax purposes.
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General
Each Noteholder will be required to report on its federal income tax return
interest income on the Offered Notes held by it in accordance with such
Noteholder's method of accounting.
Sales of Notes
A Noteholder's tax basis in an Offered Note will equal its cost of such
Offered Note, reduced by any amortized premium (as described below) and any
payments other than interest made on such Offered Note and increased by any
market discount or original issue discount included in the Noteholder's income.
A Noteholder that sells an Offered Note will recognize gain or loss (in the
aggregate) in an amount equal to the difference between its adjusted tax basis
in the Offered Note and the amount realized on the sale (except to the extent
attributable to accrued interest, which should be taxable as interest income).
Subject to the market discount provisions of the Code (described below), any
such gain or loss will be capital gain or loss if the Offered Note was held as a
capital asset and, if the Offered Note was held for more than one year, will be
long-term capital gain or loss. In the case of an individual taxpayer, any
capital gain on the sale of an Offered Note will be taxed at a maximum rate of
39.6% if the Offered Note is held for not more than 12 months, at 28% if the
Offered Note is held for more than 12 months, but not more than 18 months, and
at 20% if the Offered Note is held for more than 18 months. Any capital losses
realized will be deductible by a corporate taxpayer only to the extent of
capital gains and by an individual taxpayer only to the extent of capital gains
plus U.S. $3,000 of other income.
Market Discount
A purchaser of an Offered Note will be considered to have acquired such
Offered Note at a "market discount" to the extent the remaining principal amount
of such Offered Note exceeds the Noteholder's tax basis in such Offered Note,
unless the excess does not exceed a prescribed de minimis amount. In the event
such excess exceeds the de minimis amount, the Noteholder will be subject to the
market discount rules of Sections 1276 and 1278 of the Code with regard to such
Offered Note.
In the case of a sale or other disposition of an Offered Note subject to
the market discount rules, Section 1276 of the Code requires that gain, if any,
from such sale or disposition be treated as ordinary income to the extent such
gain represents market discount that has accrued during the period in which the
Note was held by such Noteholder. In addition, a disposition of an Offered Note
by gift (and in certain other circumstances), could result in the recognition of
market discount income, computed as if such Offered Note had been sold for its
fair market value.
In the case of a partial principal payment on an Offered Note subject to
the market discount rules, Section 1276 of the Code requires that such payment
be included in gross income as ordinary income to the extent such payment does
not exceed the market discount that has accrued during the period such Offered
Note was held by such Noteholder. The amount of any accrued market discount
later required to be included in income upon a disposition, or subsequent
partial principal payment, will be reduced by the amount of accrued market
discount previously included in income.
Generally, market discount accrues under a straight line method, or, at the
election of the taxpayer, under a constant interest rate method. However, in the
case of bonds the principal of which may be paid in two or more installments
(such as the Offered Notes), the manner in which market discount is to be
accrued will be described in Treasury regulations that have yet to be issued.
Until such Treasury regulations are issued, the explanatory conference committee
Report to the Tax Reform Act of 1986 (the "Conference Report") indicates that
holders of such obligations may elect to accrue market discount either on the
basis of a constant interest rate or as follows: (1) for those obligations that
have original issue discount ("OID"), market discount shall be deemed to accrue
in proportion to the accrual of OID for any accrual period, and (2) for those
obligations which do not have OID, the amount of market discount that is deemed
to accrue is the amount of market discount that bears the same ratio to the
total amount of remaining market discount that the amount of stated interest
paid in the accrual period bears to the total amount of stated interest
remaining to be paid on the obligation as of the beginning of such period.
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Under Section 1277 of the Code, if in any taxable year interest paid or
accrued by a Noteholder on indebtedness incurred or continued to purchase or
carry an Offered Note subject to the market discount rules exceeds the interest
(including OID) currently includible in income with respect to such Offered
Note, deductions of such interest must be deferred to extent of the market
discount allocable to the taxable year. The deferred portion of any interest
expense will generally be deductible when such market discount is included in
income upon the sale or other disposition (including repayment) of the
indebtedness.
Section 1278 of the Code allows a taxpayer to make an election to include
market discount in its gross income currently. If such election is made, the
rules of Sections 1276 and 1277 of the Code (described above) will not apply to
the taxpayer.
Due to the complexity of the market discount rules, prospective Noteholders
are urged to consult their tax advisors as to the applicability and operation of
the market discount rules.
Premium
A Noteholder will generally be considered to have acquired an Offered Note
at a premium to the extent the Noteholder's tax basis in such Offered Note
exceeds the remaining principal amount of such Offered Note. In that event, a
Noteholder who holds an Offered Note as a capital asset may amortize the premium
as an offset to interest income under Section 171 of the Code, with
corresponding reductions in the Noteholder's tax basis in the Offered Note if an
election under Section 171 of the Code is or has been made with respect to all
debt instruments held by the taxpayer (including the Offered Notes). Generally,
such amortization is on a constant yield basis. However, in the case of bonds
the principal of which may be paid in two or more installments (such as the
Offered Notes), the Conference Report indicates a Congressional intent that
amortization will be in accordance with the same rules that will apply to the
accrual of market discount on such obligations (see the discussion of market
discount above).
Backup Withholding
A Noteholder may be subject, under certain circumstances, to backup
withholding at a 31% rate with respect to "reportable payments" on the Offered
Notes. This withholding generally applies only if the Noteholder (i) fails to
provide the Noteholder's social security or other taxpayer identification number
("TIN"); (ii) furnishes an incorrect TIN; (iii) is notified by the Service that
the Noteholder has failed to report properly payments of interest and dividends
and the Service has notified the Issuer Trustee that the Noteholder is subject
to backup withholding; or (iv) fails, under certain circumstances, to provide a
certified statement, signed under penalty of perjury, that the TIN provided is
the Noteholder's correct number and that the Noteholder is not subject to backup
withholding. Any amount withheld from payment to a Noteholder under the backup
withholding rules is allowable as a credit against such Noteholder's federal
income tax liability, provided that the required information is furnished to the
Service. Certain Noteholders (including, among others, corporations and foreign
individuals who comply with certain certification requirements) are not subject
to backup withholding. Noteholders should consult their tax advisors as to their
qualifications for exemption from backup withholding and the procedure for
obtaining such an exemption.
ALL INVESTORS SHOULD CONSULT THEIR OWN TAX ADVISORS REGARDING THE FEDERAL,
STATE, LOCAL OR FOREIGN INCOME TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND
DISPOSITION OF THE NOTES.
AUSTRALIAN TAX MATTERS
The following statements with respect to Australian taxation are only
general summaries and are based on advice received by the Issuer Trustee.
Purchasers of Offered Notes should consult their own tax advisers concerning the
consequences, in their particular circumstances, under Australian tax laws, and
the laws of any other taxing jurisdiction, of the ownership of or any dealing in
the Offered Notes. Any such dealing would need to comply with the selling
restrictions and securities law generally.
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Payments of Principal, Premiums and Interest
In the opinion of Allen Allen & Hemsley, Australian tax counsel to the
Issuer Trustee ("Australian Tax Counsel") under existing Australian tax law,
non-resident holders of the Offered Notes or interests in any Book-Entry Note
(other than persons holding such securities or interest as part of a business
carried on, at or through a permanent establishment in Australia (an "Australian
Establishment")) are not subject to Australian income tax on payments of
interest or amounts in the nature of interest, including, subject to the
fulfillment of all conditions required by section 128F of the Tax Act as
referred to below, interest withholding tax. Under Article 11 of the 1983 United
States-Australia Tax Treaty, the maximum Australian withholding rate on interest
paid to United States residents who are entitled to the benefit of such Treaty
is 10%. Under Australian law, the withholding rates for payments to other
jurisdictions is currently 10% on interest or amounts in the nature of interest
paid on the Offered Notes. A premium on redemption would generally be treated as
an amount in the nature of interest for this purpose.
Pursuant to section 128F of the Australian Income Tax Assessment Act 1936
(the "Tax Act"), an exemption from Australian interest withholding tax applies
provided all prescribed conditions are met. Such conditions include the issue of
the Offered Notes in a way that satisfies an objective public offer test. The
Issuer Trustee will seek to issue the Offered Notes in a way that will satisfy
such test and otherwise meet the requirements of section 128F, including by
listing the Offered Notes.
The test will not be satisfied if the Issuer Trustee knew, or had
reasonable grounds to suspect, that the Offered Notes were being or would later
be acquired either directly or indirectly by:
(1) a resident of Australia for the purpose of section 128F of the Tax
Act; or
(2) an associate of the Issuer Trustee within the meaning of section 128F
of the Tax Act, other than in the capacity of a dealer, manager or
underwriter in relation to the placement of an Offered Note.
The exemption from Australian withholding tax will also not apply to
interest paid by the Issuer Trustee to an associate of the Issuer Trustee within
the meaning of section 128F if, at the time of the payment, the Issuer Trustee
knows, or has reasonable grounds to suspect, that the person is an associate.
In a press release of the Federal Government of Australia late last year
entitled Investing for Growth, it was announced that "in order to encourage the
deepening and greater liquidity of the domestic corporate debt market, the
interest withholding tax exemption provided under section 128F of the Income Tax
Assessment Act 1936 will be widened by removing, for eligible debentures issued
by companies, the present requirement that such debentures be issued outside
Australia and that the interest be paid outside Australia . . . this measure
will remove a tax discrimination in favour of corporate debt issued in foreign
financial markets over corporate debt issued in Australia markets."
This amendment has not yet been enacted, therefore the effect, form and
timing of the proposed amendment is currently unclear.
Profit on Sale
In the opinion of Australian Tax Counsel, under current Australian law,
non-resident holders of Offered Notes will not be subject to Australian income
tax on profits derived from the sale or disposal of Offered Notes (but see below
for discussion of Australia's capital gains provisions):
(1) if the profits do not have an Australian source; or
(2) where the profits do have an Australian source, if the holder is
resident in a country with which Australia has entered into a double tax
treaty, is entitled to the benefit of that treaty and the profits are
business profits for the purposes of the treaty which are not attributable
to a business carried on through an Australian Establishment.
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The source of any profit on the disposal of Offered Notes will depend on
the factual circumstances of the actual disposal. Where the Offered Notes are
acquired and disposed of pursuant to contractual arrangements entered into and
concluded outside Australia, and the seller and the purchaser are non-residents
of Australia and do not have an Australian Establishment, the profit should not
have an Australian source. There are, however, specific withholding tax rules
that can apply to treat a portion of the sale price of Offered Notes as interest
for withholding tax purposes (and which amounts are not covered by the exemption
conditions in section 128F). These rules can apply when:
(1) Offered Notes are sold for an amount in excess of their issue price
prior to maturity; or
(2) Offered Notes are sold to an Australian resident in connection with a
"washing arrangement" (as defined in the Tax Act).
In the opinion of Australian Tax Counsel, under provisions for the taxation
of capital gains, non-resident holders of Offered Notes would be subject to
Australian tax on profits derived from the sale or disposal of Offered Notes if
the Offered Notes were at any time prior to the sale or disposal held as part of
a business carried on through an Australian Establishment.
Other Taxes
In the opinion of Australian Tax Counsel, no stamp, issue, registration or
similar taxes are payable in Australia in connection with the issue of the
Offered Notes. Furthermore, a transfer of, or agreement to transfer, Offered
Notes executed outside of Australia will not be subject to Australian stamp
duty.
ERISA CONSIDERATIONS
Subject to the considerations discussed below, the Offered Notes are
eligible for purchase by employee benefit plans.
Section 406 of the Employee Retirement Income Security Act ("ERISA"),
and/or Section 4975 of the Code, prohibits a pension, profit-sharing or other
employee benefit plan, as well as individual retirement accounts and certain
types of Keogh Plans (each a "Benefit Plan") from engaging in certain
transactions with persons that are "parties in interest" under ERISA or
"disqualified persons" under the Code with respect to such Benefit Plan. A
violation of these "prohibited transaction" rules may result in an excise tax or
other penalties and liabilities under ERISA and the Code for such persons. Title
I of ERISA also requires that fiduciaries of a Benefit Plan subject to ERISA
make investments that are prudent, diversified (except if prudent not to do so)
and in accordance with governing plan documents.
Certain transactions involving the purchase, holding or transfer of the
Offered Notes might be deemed to constitute prohibited transactions under ERISA
and the Code if assets of the Issuer Trustee were deemed to be assets of a
Benefit Plan. Under a regulation issued by the United States Department of Labor
(the "Plan Assets Regulation"), the assets of the Issuer Trustee would be
treated as plan assets of a Benefit Plan for the purposes of ERISA and the Code
only if the Benefit Plan acquires an "equity interest" in the Issuer Trustee and
none of the exceptions contained in the Plan Assets Regulation is applicable. An
equity interest is defined under the Plan Assets Regulation as an interest in an
entity other than an instrument which is treated as indebtedness under
applicable local law and which has no substantial equity features. Although
there can be no assurances in this regard, it appears that the Offered Notes
should be treated as debt without substantial equity features for purposes of
the Plan Assets Regulation and that the Offered Notes do not constitute equity
interests in the Issuer Trustee for purposes of the Plan Assets Regulation.
However, without regard to whether the Offered Notes are treated as an equity
interest for such purposes, the acquisition or holding of the Offered Notes by
or on behalf of a Benefit Plan could be considered to give rise to a prohibited
transaction if the Issuer Trustee, or any of its affiliates is or becomes a
party in interest or a disqualified person with respect to such Benefit Plan. In
such case, certain exemptions from the prohibited transaction rules could be
applicable depending on the type and circumstances of the plan fiduciary making
the decision to acquire an Offered Note. Included among these exemptions are:
Prohibited Transaction Class Exemption ("PTCE") 96-23, regarding
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transactions effected by "in-house asset managers"; PTCE 90-1, regarding
investments by insurance company pooled separate accounts; PTCE 95-60, regarding
transactions effected by "insurance company general accounts"; PTCE 91-38,
regarding investments by bank collective investment funds; and PTCE 84-14,
regarding transactions effected by "qualified professional asset managers." By
its acquisition of an Offered Note, each purchaser shall be deemed to represent
and warrant that its purchase and holding of the Offered Note will not result in
a non-exempt prohibited transaction under ERISA or the Code.
Employee benefit plans that are governmental plans (as defined in Section
3(32) of ERISA) and certain church plans (as defined in Section 3(33) of ERISA)
are not subject to ERISA requirements.
A PLAN FIDUCIARY CONSIDERING THE PURCHASE OF ANY OF THE OFFERED NOTES
SHOULD CONSULT ITS TAX AND/OR LEGAL ADVISORS REGARDING WHETHER THE ASSETS OF THE
ISSUER TRUSTEE WOULD BE CONSIDERED PLAN ASSETS, THE POSSIBILITY OF EXEMPTIVE
RELIEF FROM THE PROHIBITED TRANSACTION RULES AND OTHER ISSUES AND THEIR
POTENTIAL CONSEQUENCES.
RATINGS OF THE NOTES
It is a condition to the issuance of the Class A Notes that they be rated
"AAA" by Standard & Poor's, "Aaa" by Moody's and "AAA" by Fitch. It is a
condition to the issuance of the Class B Notes that they be rated "AA-" by
Standard & Poor's and "AA-" by Fitch. The security ratings of the Offered Notes
should be evaluated independently from similar ratings on other types of
securities. 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
Rating Agencies. The Offered Notes are pass-through debt securities. The rating
does not address the expected schedule of principal repayments other than to say
that principal will be returned no later than the final maturity date.
LEGAL INVESTMENT CONSIDERATIONS
The Offered Notes will not constitute "mortgage related securities" for
purposes of the Secondary Mortgage Market Enhancement Act of 1984 ("SMMEA"),
because the originator of the Mortgage Loans was not subject to United States
State of Federal regulatory authority. Accordingly, many institutions with legal
authority to invest in comparably rated securities based on such mortgage loans
may not be legally authorized to invest in the Offered Notes, which, for the
reasons stated herein, do not constitute "mortgage related securities" under
SMMEA. No representation is made as to whether the Offered Notes constitute
legal investments under any applicable statute, law, rule, regulation or order
for any entity whose investment activities are subject to investment laws and
regulations or to review by certain regulatory authorities. Prospective
purchasers are urged to consult with their counsel concerning the status of the
Offered Notes as legal investments for such purchasers.
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting
Agreement, by and among the underwriters named below (the "Underwriters"),
Westpac, the Issuer Trustee and Trust Manager, the Issuer Trustee has agreed to
sell to the Underwriters, and each of the Underwriters have severally agreed to
purchase, the principal amount of the Offered Notes set forth opposite its name
below.
<TABLE>
<CAPTION>
Principal Amount Principal Amount
Underwriter of Class A Notes (US$) of Class B Notes (US$)
- ----------- ---------------------- ----------------------
<S> <C> <C>
$ $
------------ ------------
Total . . . . . . . . . . $ $
------------ ------------
------------ ------------
</TABLE>
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In the Underwriting Agreement, the Underwriters named therein have agreed,
subject to the terms and conditions set forth therein, to purchase all of the
Offered Notes offered hereby if any Offered Notes are purchased. In the event of
default by an Underwriter, the Underwriting Agreement provides that, in certain
circumstances, the Underwriting Agreement may be terminated.
The Issuer Trustee has been advised by the Underwriters that they propose
initially to offer the Offered Notes to the public at the respective offering
prices set forth on the cover page hereof and to certain dealers at such prices
less concessions not to exceed ____% of the Initial Invested Amount of the
Class A Notes and ____% of the Initial Invested Amount of the Class B Notes.
With respect to the Class A Notes, the Underwriters may allow and such
dealers may reallow, a concession not to exceed ____% of the aggregate of the
Initial Invested Amount of the Class A Notes. With respect to the Class B Notes,
the Underwriters may allow and such dealers may reallow, a concession not to
exceed ____% of the Initial Invested Amount of the Class B Notes.
In connection with the offering, the Underwriters may engage in
transactions that stabilize, maintain or otherwise affect the price of the
Offered Notes. Specifically, the Underwriters may overallot the offering,
creating a syndicate short position. In addition, the Underwriters may bid for,
and purchase, the Offered Notes in the open market to cover syndicate shorts or
to stabilize the price of the Offered Notes. Any of these activities may
stabilize or maintain the market price of the Offered Notes above independent
market levels. The Underwriters are not required to engage in these activities,
and if commenced, such activities may be discontinued at any time.
After the initial public offering of the Offered Notes, the public offering
price and such concessions may be changed.
Pursuant to the Underwriting Agreement, Westpac Securities Administration
Limited (in its capacity as trustee of the Trust only), Westpac Securitisation
Management Pty Limited and Westpac have agreed to indemnify the Underwriters
against certain liabilities, including civil liabilities under the Securities
Act, or contribute to payments which the Underwriters may be required to make in
respect thereof.
In the ordinary course of its business, certain of the Underwriters and
certain of their affiliates have in the past and may in the future engage in
commercial and investment banking activities with Westpac and its affiliates.
Offering Restrictions
United Kingdom
Each Underwriter has severally represented and agreed with the Issuer
Trustee that:
(i) it has not offered or sold and will not offer or sell any Offered
Notes to persons in the United Kingdom prior to admission of the Offered
Notes to listing in accordance with Part IV of the Financial Services Act
1986 (the "Financial Services Act") 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 Public
Offers of Securities Regulations 1995 or the Financial Services Act;
(ii) it has complied and will comply with all applicable provisions of the
Financial Services Act with respect to anything done by it in relation to the
Offered Notes in, from or otherwise involving the United Kingdom; and
(iii) it has only issued or passed on and will only issue or pass on in the
United Kingdom any document received by it in connection with the issues of the
Offered Notes, other than any document which consists of or of any part of
listing particulars, supplementary listing particulars or any other document
required or permitted to be published by listing rules under Part IV of the
Financial Services Act, to a person who is of a kind described in Article 11(3)
of the
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Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order
1996 (as amended) or is a person to whom the document may otherwise lawfully
be issued or passed on.
Australia
The Offered Notes may not, in connection with their initial distribution,
be offered or sold, directly or indirectly, in the Commonwealth of Australia,
its territories or possessions ("Australia"), or to any resident of Australia.
Each Underwriter has severally represented and agreed that in connection with
the initial distribution of the Offered Notes it:
(i) has not (directly or indirectly) offered for subscription or
purchase or issue invitations to subscribe for or buy nor has it sold, the
Offered Notes;
(ii) will not (directly or indirectly) offer for subscription or purchase
or issued invitations to subscribe for or buy nor will it sell the Offered
Notes; and
(iii) has not distributed and will not distribute any offering circular, or
any advertisement or other offering material,
in Australia, its territories or possessions or to any person who is (a)
actually known by the Underwriter (without an obligation on the Underwriter to
make any inquiry) to be a resident of Australia for the purposes of section 128F
of the Tax Act or (b) an associate of Westpac within the meaning of that section
(other than in the capacity of a dealer or underwriter in relation to a
placement of the Offered Notes) as identified on a list provided by Westpac.
LISTING AND GENERAL INFORMATION
Listing
The listing of the Offered Notes on the London Stock Exchange will be
expressed as a percentage of their principal amount (exclusive of accrued
interest). It is expected that listing of the Offered Notes on the London Stock
Exchange will be granted on or about __________, subject to the issuance of
Global Notes. The Offered Notes will be issued in the form of one or more Global
Notes. There will be no temporary global notes.
Authorization
The Issuer Trustee has obtained all necessary consents, approvals and
authorizations in connection with the issue and performance of the Notes. The
issue of the Notes has been authorized by the resolutions of the Board of
Directors of the Issuer Trustee passed on ___________.
Litigation
The Issuer Trustee is not involved in any litigation or arbitration
proceedings which may have, or have had during the twelve months preceding the
date of this Prospectus, a significant effect on the Issuer Trustee's financial
position nor, so far as the Issuer Trustee is aware, are any such litigation or
arbitration proceedings pending or threatened.
Euroclear and Cedel
The Offered Notes have been accepted for clearance through Euroclear and
Cedel Bank with a common code of __________ for the Class A Notes and a common
code of __________ for the Class B Notes. The ISIN for the Class A Notes is
____________ and the ISIN for the Class B Notes is ______________.
Documents Available for Collection and Inspection
Copies of the following documents may be inspected during normal business
hours on any weekday (excluding Saturdays, Sundays and public holidays) at the
offices of the Principal Paying Agent at __________________, during
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the period of fourteen days from the date of this Prospectus (except for (a) and
(b) (xiii), together the "Transaction Documents"):
(a) the Memorandum and Articles of Association of the Issuer Trustee;
(b) the Master Trust Deed between the Issuer Trustee and the Trust Manager
dated 14th February 1997;
(c) the following (which, prior to the Closing Date, will be in draft
form):
(i) the Series Notice among the Issuer Trustee, the Trust Manager,
the Approved Seller, the Note Trustee and the Servicer dated on or about
___________;
(ii) the Servicing Agreement dated February 18, 1997 and the Servicing
Agreement Amendment Agreement dated on or about __________, each among
Westpac, the Servicer and the Issuer Trustee;
(iii) the Note Trust Deed among the Issuer Trustee, the Trust
Manager and the Note Trustee dated on or about __________;
(iv) the Agency Agreement among the Issuer Trustee, the Trust Manager,
the Note Trustee, the Principal Paying Agent and the Agent Bank dated on or
about __________;
(v) the Security Trust Deed among the Issuer Trustee, the Security
Trustee, the Note Trustee and the Trust Manager dated on or about
__________;
(vi) the Liquidity Facility Agreement among the Issuer Trustee, the
Liquidity Provider and the Trust Manager dated on or about __________;
(vii) the Redraw Facility Agreement among the Issuer Trustee, the
Redraw Facility Provider and the Trust Manager dated on or about
__________;
(viii) the Interest Rate Swaps between the Issuer Trustee and
Westpac dated on or about __________;
(ix) the Currency Swap between Westpac, as a Currency Swap Provider
and the Issuer Trustee dated on or about __________;
(x) the Currency Swap between Morgan Guaranty & Trust Company, London
Branch as a Currency Swap Provider, and the Issuer Trustee dated on or
about __________;
(xi) the Mortgage Pool Insurance Policy between HLIC, Westpac and the
Issuer Trustee;
(xii) the PMI Policies issued by Royal & Sun, MGICA, WLMI and
HLIC which cover individual housing loans for principal and interest
losses; and
(xiii) Underwriting Agreement among the Trust Manager, the Issuer
Trustee, Westpac and the Underwriters dated on or about __________;
Temporary Australian Foreign Exchange Controls
Under temporary Australian foreign exchange controls, payments to, or on
behalf of:
(1) the Government of Iraq or to its agencies or nationals:
(2) the authorities of the Federal Republic of Yugoslavia (Serbia and
Montenegro); or
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(3) the Government of Libya or any public authority or controlled entity
of the Government of Libya, may only be made with the approval of the Reserve
Bank of Australia.
Consents to Opinions
Mayer, Brown & Platt have given and not withdrawn their written consent to
the inclusion in this Prospectus of their opinion in the form and context in
which it is included on pages ____ and ____ and have authorized the content of
their opinion for the purposes of section 152(1)(e) of the Financial Services
Act 1986.
Allen Allen & Hemsley have given and not withdrawn their written consent to
the inclusion in the Prospectus of their opinion in the form and context in
which it is included on pages ___, ____, ___ and ____ and have authorized the
content of their opinion for the purposes of section 152(1)(e) of the Financial
Services Act 1986.
LEGAL MATTERS
Certain legal matters with respect to the Offered Notes will be passed upon
for the Trust Manager and the Issuer Trustee by Mayer, Brown & Platt, New York,
New York, and for the Trust Manager by Allen Allen & Hemsley, Sydney, Australia
and for the Underwriters by Brown & Wood llp, New York, New York. The material
U.S. federal income tax consequences of the Offered Notes will be passed upon
for the Trust Manager by Mayer, Brown & Platt, and certain Australian income tax
consequences will be passed upon for the Trust Manager by Allen Allen & Hemsley.
Certain legal matters with respect to the Note Trustee will be passed upon by
____________________, a multinational partnership, London, England.
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INDEX OF TERMS
<TABLE>
<CAPTION>
Page
----
<S> <C>
A$ ...............................................................................................................7
A$ Class A Interest Amount.......................................................................................93
A$ Class B Interest Amount.......................................................................................93
Accrued Interest Adjustment..................................................................................29, 45
ACN .............................................................................................................60
ACT .............................................................................................................50
Additional Termination Event....................................................................................134
Adverse Effect .............................................................................................39, 142
Agent Bank ......................................................................................................16
AMP .............................................................................................................83
Approved Bank ...................................................................................................90
Approved Sellers ...............................................................................................13
Australian Establishment........................................................................................146
Australian Tax Counsel..........................................................................................146
Authorized Investments..........................................................................................112
Automatic Early Termination.....................................................................................134
Availability Fee ..............................................................................................105
Available Income ...........................................................................................27, 90
Available Liquidity Amount......................................................................................130
Available Redraw Amount.........................................................................................104
Average Quarterly Percentage....................................................................................101
Bank Bill Rate ..............................................................................................105
Basic Terms Modification...................................................................................118, 119
beneficial owner ..............................................................................................114
Beneficiary .....................................................................................................96
Benefit Plan ...................................................................................................147
Bond Factor ...................................................................................................113
Book-Entry Notes ..........................................................................................89, 114
Borrower .......................................................................................................20
Business Day ................................................................................................15, 88
Carryover Charge Off.............................................................................................28
Carryover Class A Charge Offs...................................................................................102
Carryover Class B Charge Offs...................................................................................102
Carryover Redraw Charge Offs....................................................................................102
Carryover RFS Class A Charge Offs...............................................................................103
Cede .............................................................................................................3
Cedel ............................................................................................................1
Cedel Participants..............................................................................................115
Certificate of Insurance.........................................................................................79
charge ..........................................................................................................22
chargor .....................................................................................................22, 43
Class ..........................................................................................................15
Class A Charge Off..............................................................................................102
Class A Forex Percentage........................................................................................101
Class A Notes ............................................................................................1, 14, 88
Class A Percentage..............................................................................................101
Class B Charge Off..............................................................................................102
Class B Notes ............................................................................................1, 14, 88
Class B Percentage..............................................................................................101
Clean-up Offer ..................................................................................................24
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
Closing Date ....................................................................................................15
Code ...........................................................................................................143
Collateral Account..............................................................................................130
Collection Account..............................................................................................111
Collection Determination Date....................................................................................88
Collection Period ...............................................................................................88
Collections .................................................................................................27, 89
Collections Account..............................................................................................21
Commission .......................................................................................................3
Concessional Fixed Rate..........................................................................................34
Conference Report ..............................................................................................144
Consumer Credit Legislation.................................................................................39, 141
Cooperative ....................................................................................................115
CPR .............................................................................................................84
Currency Swap Providers.........................................................................................134
Currency Swaps ............................................................................................134, 135
Cut-Off Date ....................................................................................................15
Cut-Off Date Balance Outstanding.............................................................................20, 47
Cut-Off Date Pool Balance........................................................................................50
Definitive Note ................................................................................................114
Definitive Notes ..............................................................................................117
Delinquent .............................................................................................22, 66, 130
Depository ......................................................................................................89
Draw Fee .......................................................................................................105
DTC .........................................................................................................1, 114
Eligibility Criteria.............................................................................................49
Eligible Servicer ...............................................................................................37
ERISA ..........................................................................................................147
Euroclear ........................................................................................................1
Euroclear Operator..............................................................................................115
Euroclear Participants..........................................................................................115
European Depositaries...........................................................................................114
Event of Default ..............................................................................................120
Excess Available Income......................................................................................29, 95
Excess Collections Distribution..............................................................................29, 96
Exchange Act .....................................................................................................3
Fair Market Value ...............................................................................................24
Finance Charge Collections.......................................................................................91
Finance Charge Loss..............................................................................................91
Financial Intermediary..........................................................................................114
Financial Services Act..........................................................................................149
Fitch ...........................................................................................................25
Fixed Rate ......................................................................................................34
Fixed Rate Housing Loans.........................................................................................50
floating charge .................................................................................................22
GE ..............................................................................................................82
GECA ............................................................................................................82
Government ......................................................................................................82
Gross Principal Collections..................................................................................27, 96
HLIC ........................................................................................................19, 78
Holders .........................................................................................................88
Housing Loan Principal......................................................................................24, 101
Housing Loans ....................................................................................................2
</TABLE>
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<TABLE>
<S> <C>
Initial Invested Amount..........................................................................................15
Initial Principal Distributions..................................................................................98
Initial Subordinated Percentage.................................................................................101
Insolvency Event ...............................................................................................106
Interest .........................................................................................17, 95, 108, II-6
Interest Determination Date..............................................................................16, 88, 95
Interest Period .................................................................................................15
Interest Rate ...............................................................................................16, 95
Interest Rate Swap Provider.....................................................................................133
Invested Amount .............................................................................................15, 28
IRS ............................................................................................................143
ISDA ........................................................................................................16, 95
ISDA Definitions ............................................................................................16, 95
ISDA Master Agreement............................................................................................23
Issuer Trustee ...........................................................................................1, 13, 60
Issuer Trustee Fee...............................................................................................62
Issuer Trustee's Default.........................................................................................63
J.P. Morgan ....................................................................................................137
Liquidation Loss ...............................................................................................28
Liquidation Losses...............................................................................................91
Liquidation Proceeds.............................................................................................91
Liquidity Draw .................................................................................................130
Liquidity Facility Provider......................................................................................22
Liquidity Limit ............................................................................................22, 130
Liquidity Shortfall.............................................................................................130
LMI .............................................................................................................82
London Stock Exchange.............................................................................................1
Loss Date .......................................................................................................80
LVR .............................................................................................................19
Margin .........................................................................................................108
Master Trust Deed ...............................................................................................13
Maturity Date ...................................................................................................15
MGICA .......................................................................................................19, 78
MIP .............................................................................................................67
Moody's .........................................................................................................25
Morgan Guaranty ...........................................................................................134, 137
Mortgage Default ................................................................................................80
Mortgage Insurance Policies......................................................................................19
Mortgage Insurers ...............................................................................................19
Mortgage Pool ...................................................................................................20
Mortgage Pool Insurance Policy...............................................................................18, 78
Mortgage Rates ..................................................................................................21
Mortgage Servicing System........................................................................................21
Mortgage Shortfall..........................................................................................28, 101
Mortgaged Property...............................................................................................20
Mortgagee in Possession..........................................................................................67
Mortgagees ..................................................................................................22, 42
Mortgages .......................................................................................................47
MPC .............................................................................................................66
Net Principal Collections....................................................................................18, 98
Note Owners ....................................................................................................114
Note Trust Deed .............................................................................................13, 65
Note Trustee ................................................................................................13, 65
</TABLE>
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<TABLE>
<S> <C>
Noteholder .....................................................................................................114
Noteholder's Report.............................................................................................112
Notes .......................................................................................................15, 88
Notice of Creation of Trust......................................................................................41
NSW ............................................................................................................50
NT ..............................................................................................................50
Offered Noteholders..........................................................................................15, 88
Offered Notes ............................................................................................1, 14, 88
OID ............................................................................................................144
P & I ...........................................................................................................77
Paying Agents ...................................................................................................13
Payment Date .................................................................................................1, 15
Payment Shortfall ...........................................................................................21, 92
Performing Loan ............................................................................................22, 130
Plan Assets Regulation..........................................................................................147
PMI Policy ..................................................................................................19, 82
pool of mortgages ..............................................................................................112
Prepayment Benefit...............................................................................................92
Prepayment Benefit Shortfall.....................................................................................91
Prepayment Calculation Adjustment................................................................................97
Prepayment Cost .................................................................................................92
Prepayment Cost Surplus..........................................................................................91
Principal Charge Off........................................................................................28, 102
Principal Collections........................................................................................27, 97
Principal Draw ......................................................................................21, 27, 29, 92
Principal Loss ..............................................................................................28, 92
Principal Outstanding...........................................................................................104
Principal Paying Agent...........................................................................................13
Procedures Manual ..............................................................................................125
prohibited transaction..........................................................................................147
PTCE ...........................................................................................................147
QLD .............................................................................................................50
Quarter .........................................................................................................88
Quarterly Percentage............................................................................................101
Rating Agencies .................................................................................................25
Record Date .....................................................................................................15
Redraw .................................................................................................33, 76, 103
Redraw Advance .................................................................................................104
Redraw Facility Agreement...................................................................................23, 104
Redraw Facility Charge Off......................................................................................102
Redraw Facility Provider....................................................................................18, 104
Redraw Funding Securities........................................................................................14
Redraw Limit ...................................................................................................104
Redraw Shortfall ...............................................................................................104
redraws .........................................................................................................14
Registered ......................................................................................................20
Registration Statement............................................................................................5
Related Security ................................................................................................48
Relevant Date ..................................................................................................109
Relevant Depositary.............................................................................................114
Relevant Document ...............................................................................................48
Remaining Liquidity Shortfall....................................................................................92
Remittance Date .................................................................................................89
</TABLE>
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<TABLE>
<S> <C>
Replacement Currency Swap.......................................................................................136
Representative ..................................................................................................44
RFS ............................................................................................................107
RFS Charge Off .................................................................................................102
RFS Class A Charge Off..........................................................................................102
RFS Class A Forex Percentage....................................................................................101
RFS Class A Interest.............................................................................................93
RFS Class A Note .........................................................................................108, II-4
RFS Class A Notes ............................................................................................2, 14
RFS Interest ....................................................................................................93
RFS Series .....................................................................................................107
RFSs .........................................................................................................2, 14
Royal & Sun .................................................................................................19, 78
Rules ..........................................................................................................114
SA ..............................................................................................................50
Sale Notice .....................................................................................................13
Scheduled Payment ...............................................................................................20
Secured Moneys ..................................................................................................44
Securities Act ...................................................................................................5
Securitized Portfolios...........................................................................................67
Security Trust Deed..............................................................................................13
Security Trustee ............................................................................................13, 42
Security Trustee Fee.............................................................................................46
Seller Trustee ..............................................................................................13, 41
sequentially ....................................................................................................28
Serial Method 1 Distribution Test............................................................................28, 99
Serial Method 2 Distribution Test...........................................................................28, 100
Series Notice ...................................................................................................22
Service ........................................................................................................143
Servicer .................................................................................................6, 13, 48
Servicer Transfer Event.........................................................................................128
Servicer's Security Undertaking..................................................................................32
Servicing Agreement..............................................................................................13
Servicing Fee ..................................................................................................128
SMMEA ......................................................................................................25, 148
Standard & Poor's ...............................................................................................25
Stated Amount ...............................................................................................17, 28
Strata title ...................................................................................................138
Subordinated Percentage.........................................................................................101
Substitution Net Transfer Amount (Income)........................................................................90
Substitution Net Transfer Amount (Principal).....................................................................97
Support Facility ................................................................................................22
Swap Agreements .................................................................................................23
Swap Providers .................................................................................................134
TAS .............................................................................................................50
Tax Act ........................................................................................................146
Tax Counsel ....................................................................................................143
Term ...........................................................................................................129
Termination Date ...............................................................................................106
Terms and Conditions............................................................................................116
Threshold Rate .............................................................................................34, 134
TIN ............................................................................................................145
Title Perfection Event...........................................................................................31
</TABLE>
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<TABLE>
<S> <C>
TMC .........................................................................................................13, 65
top up ..........................................................................................................33
Torrens title ..................................................................................................138
Total Available Funds............................................................................................90
Total Carryover Charge Off......................................................................................102
Total Payments ..............................................................................................29, 94
Transaction Documents.......................................................................................23, 151
Transfer Agent and Registrar....................................................................................117
Trust ....................................................................................................1, 13, 22
Trust Accounts .................................................................................................111
Trust Assets .....................................................................................................2
Trust Expenses ..................................................................................................94
Trust Manager ............................................................................................2, 13, 71
Trust Manager Fee ...............................................................................................72
Trust Manager's Default..........................................................................................72
U.S. dollars .....................................................................................................7
Underwriters ...................................................................................................148
Unpaid Balance .........................................................................................22, 24, 110
US$ ..............................................................................................................7
US$ Account ....................................................................................................103
USD-LIBOR-BBA ..........................................................................................16, 95, 108
USD-LIBOR-Reference Banks....................................................................................16, 95
Variable Rate Housing Loans......................................................................................50
Vic .............................................................................................................50
Voting Mortgagee ...............................................................................................121
WA ..............................................................................................................50
warehouse .......................................................................................................41
weighted average life............................................................................................84
Westpac ..................................................................................................2, 13, 65
Westpac Group ...................................................................................................41
Withholding Tax Event............................................................................................24
WLMI ........................................................................................................19, 78
WSML ............................................................................................................71
</TABLE>
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APPENDIX I--GLOSSARY OF AUSTRALIAN LEGAL TERMS
"Charge" means the charge created by the Security Trust Deed. A Charge is a
proprietary interest created over property.
"Chargor" means the person or entity granting a Charge.
Mortgagee in Possession ("MIP") means a mortgagee in possession of the
related Mortgaged Property who, following an enforcement of the relevant
mortgage, is able to deal with the Mortgaged Property without becoming the
absolute owner of the Mortgaged Property.
"Registered" means the mortgage has been filed with the lands office in the
relevant Australian State or Territory, granting certain rights with respect to
the applicable Mortgaged Property.
"Secured Moneys" means all money which the Issuer Trustee (whether alone or
with another person) is or at any time may become actually or contingently
liable to pay to or for the account of any Mortgagee (whether alone or with
another person) for any reason whatever under or in connection with a
Transaction Document.
"Strata title" means a system of title in which the relevant land is
divided into the relevant number of units. Each proprietor has title to, and may
freely dispose of, their unit. All proprietors are members of a "body
corporate", which monitors compliance with rules governing the apartment block.
Certain parts of the property, such as stairwells, entrance lobbies and the like
are known as "common property" and are owned by the body corporate as a whole
rather than by individual proprietors.
"Torrens title" means a system of title in which the relevant land is
freehold title, interests in which are created by registration in a central land
registry of the relevant State or Territory. Each parcel of land is represented
by a specific certificate of title. The original certificate is retained by the
registry, and in most States a duplicate certificate is issued to the owner. Any
dealing with the relevant land is carried out by pro forma instruments which
become effective on registration.
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APPENDIX II--TERMS AND CONDITIONS OF THE CLASS A NOTES
TERMS AND CONDITIONS OF THE CLASS A NOTES
The following, subject to amendments, are the terms and conditions of the
Class A Notes, substantially as they will appear on the reverse of the Class A
Notes. Class A Notes in definitive form will only be issued in certain
circumstances. While the Class A Notes remain in book-entry form, the same terms
and conditions govern them, except to the extent that they are appropriate only
to the Class A Notes in definitive form. For a summary of the provisions
relating to the Class A Notes in book-entry form, see the summary at the end of
this section.
The issue of US$__________ Class A Mortgage Backed Floating Rate Notes due
____ (the "Class A Notes") of Westpac Securities Administration Limited in its
capacity as trustee of the Series 1998-2G WST Trust (the "Trust"), in such
capacity (the "Issuer Trustee") was authorised by resolutions of the Board of
Directors of the Issuer Trustee passed on __________. These Notes, together with
US$__________ Class B Mortgage Backed Floating Rate Notes due _______ (the
"Class B Notes" and, together with the Class A Notes, the "Notes") of the Issuer
Trustee are (a) issued subject to a Master Trust Deed (the "Master Trust Deed")
dated 14th February 1997 between the Issuer Trustee and The Mortgage Company Pty
Limited, acceded to by Westpac Securitisation Management Pty Limited (the "Trust
Manager"), by a Series Notice (the "Series Notice") dated __________ between
(among others) the Issuer Trustee, ___________________________ (the note trustee
for the time being referred to as the "Note Trustee") as trustee for the holders
for the time being of the Class A Notes (the "Class A Noteholders") and the
holders for the time being of the Class B Notes (the "Class B Noteholders" and
together with the Class A Noteholders, the "Noteholders") and the Trust Manager,
and by these terms and conditions (the "Class A Conditions"); (b) issued subject
to a note trust deed dated __________ (the "Note Trust Deed") between the Issuer
Trustee, the Trust Manager and the Note Trustee; and (c) secured by a Security
Trust Deed (the "Security Trust Deed") dated __________ between the Issuer
Trustee, the Trust Manager, the Note Trustee and Perpetual Trustee Company
Limited (ACN 000 001 007) (the security trustee for the time being referred to
as "Security Trustee").
The statements set out below include summaries of, and are subject to the
detailed provisions of the Master Trust Deed, the Series Notice, the Security
Trust Deed and the Note Trust Deed. Certain words and expressions used herein
have the meanings defined in those documents. In accordance with an agency
agreement (the "Agency Agreement") dated __________ between the Issuer Trustee,
the Trust Manager, the Note Trustee and _____________________________ as
principal paying agent (the "Principal Paying Agent", which expression includes
its successors as principal paying agent under the Agency Agreement) and as
agent bank (the "Agent Bank", which expression includes its successors as Agent
Bank under the Agency Agreement), and under which further paying agents may be
appointed (together with the Principal Paying Agent, the "Paying Agents", which
expression includes the successors of each paying agent as such under the Agency
Agreement and any additional paying agents appointed), payments in respect of
the Class A Notes will be made by the Paying Agents and the Agent Bank will make
the determinations specified in the Agency Agreement. The Class A Noteholders
will be entitled (directly or indirectly) to the benefit of, will be bound by,
and will be deemed to have notice of, all the provisions of the Master Trust
Deed, the Series Notice, the Security Trust Deed, the Note Trust Deed and the
Servicing Agreement as amended (the "Servicing Agreement Amendment Agreement")
dated __________ and made between the Issuer Trustee, Westpac Banking
Corporation ("Westpac") and The Mortgage Company Pty Limited as Servicer
(together with any substitute or successor, the "Servicer") (together with the
Currency Swap Agreements (as defined below), those documents the "Relevant
Documents" and, together with certain other transaction documents defined as
such in the Series Notice, the "Transaction Documents"). Copies of the
Transaction Documents are available for inspection at the principal office of
the Principal Paying Agent, being at the date hereof
___________________________.
In connection with the issue of the Class A Notes, the Issuer Trustee has
entered into an ISDA master interest rate and currency exchange agreement dated
__________ with Westpac Banking Corporation (in such capacity, the "Interest
Rate Swap Provider") together with three confirmations relating thereto dated
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__________ (the "Variable Rate Basis Swap" and the "Fixed Rate Basis Swap",
respectively and, together, the "Interest Rate Swaps"). The Issuer Trustee has
also entered into ISDA master interest rate and currency exchange agreements
dated __________ with each of Morgan Guaranty Trust Company of New York, London
Branch and Westpac Banking Corporation (each, in such capacity, a "Currency Swap
Provider", and together with the Interest Rate Swap Provider, the "Swap
Providers") together with two confirmations relating to each such agreement
dated __________ in respect of two distinct swap transactions relating to each
of the Class A Notes and the Class B Notes, respectively (each, a "Currency
Swap", and together the "Currency Swaps").
1. Form, Denomination and Title
The Class A Notes will be issued in registered form, without interest
coupons, in minimum denominations of US$100,000 and integral multiples thereof.
The Class A Notes will be represented by one or more typewritten fully
registered book-entry notes (each, a "Book-Entry Note" and collectively, the
"Book-Entry Notes") registered in the name of Cede & Co. ("Cede") as nominee of
The Depository Trust Company ("DTC"). Beneficial interests in the Book-Entry
Notes will be shown on, and transfers thereof will be effected only through,
records maintained by DTC and its participants. Morgan Guaranty Trust Company of
New York, Brussels office, as operator of the Euroclear System ("Euroclear") and
Cedel Bank, societe anonyme ("Cedel Bank"), may hold interests in the Book-Entry
Notes on behalf of persons who have accounts with Euroclear and Cedel Bank
through accounts maintained in the names of Euroclear or Cedel Bank, or in the
names of their respective depositories, with DTC.
If the Issuer Trustee is obliged to issue Definitive Notes under clause 3.3
of the Note Trust Deed, interests in the applicable Book-Entry Note will be
transferred to the beneficial owners thereof in the form of Definitive Notes,
without interest coupons, in the denominations set forth above. A Definitive
Note will be issued to each Noteholder in respect of its registered holding or
holdings of Class A Notes against delivery by such Noteholders of a written
order containing instructions and such other information as the Issuer Trustee
and Morgan Guaranty Trust Company of New York, London Branch acting as note
registrar (the "Note Registrar") may require to complete, execute and deliver
such Definitive Notes. In such circumstances, the Issuer Trustee will cause
sufficient Definitive Notes to be executed and delivered to the Note Registrar
for completion, authentication and dispatch to the relevant Noteholders.
2. Status, Security and Relationship between the Class A Notes, the Class
B Notes, the RFSs and the RFS Class A Notes
The Class A Notes are secured by a first ranking floating charge over all
of the assets of the Trust (which include, among other things, the Loans (as
defined below) and the Mortgages (as defined below) and related securities) (as
more particularly described in the Security Trust Deed) and rank pari passu and
rateably without any preference or priority among themselves.
The Class A Notes are constituted by the Master Trust Deed and the Series
Notice and are secured by the same security as secures the Class B Notes but the
Class A Notes will rank in priority to the Class B Notes in the event of the
security being enforced and in respect of principal and interest (as set out in
Class A Condition 4 and 5).
The proceeds of the issue of the Class A Notes and the Class B Notes are to
be used by the Issuer Trustee to purchase an equitable interest in certain
housing loans (the "Loans") and certain related mortgages (the "Mortgages") from
Westpac or Westpac Securities Administration Limited in its capacity as trustee
of certain other trusts (each a "WST Seller").
In the event that the security for the Class A Notes is enforced and the
proceeds of such enforcement are insufficient, after payment of all other claims
ranking in priority to or pari passu with the Class A Notes under the Security
Trust Deed, to pay in full all principal and interest and other amounts
whatsoever due in respect of the Class A Notes, then the Class A Noteholders
shall have no further claim against the Issuer Trustee in respect of any such
unpaid amounts.
The net proceeds of realisation of the assets of the Trust may be
insufficient to pay all amounts due to the Noteholders. Save in certain limited
circumstances the other assets of the Issuer Trustee will not be available for
payment of any shortfall arising and all claims in respect of such shortfall
shall be extinguished (see further Class A Condition
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<PAGE>
15). None of the Servicer, the Trust Manager, the Seller Trustee, Westpac, the
Note Trustee or the Security Trustee has any obligation to any Noteholder for
payment of any amount by the Issuer Trustee in respect of the Notes.
The Issuer Trustee may from time to time issue debt securities ("RFSs")
constituted under the Master Trust Deed and the Series Notice to fund amounts
redrawn by relevant borrowers under the Loans (up to the scheduled amortised
principal of the Loans) from time to time ("Redraws"). RFSs will, on issue, rank
pari passu and prior to enforcement of the security relating to the RFSs and the
Class A Notes rateably without any preference or priority with the Class A Notes
in relation to payment of interest, but ahead of the Class A Notes in relation
to principal. Upon enforcement of the security relating to the RFSs and the
Class A Notes, all moneys owing to the holders of the RFSs and the holders of
the Class A Notes will (subject to amounts being available for such payment) be
paid pari passu.
If, by the fifth Collection Determination Date (as defined in Class A
Condition 5) following the issue of an RFS, the RFS has not been redeemed, it
shall convert to an RFS Class A Note (each, an "RFS Class A Note" and, together
the "RFS Class A Notes"). RFS Class A Notes rank pari passu and rateably without
preference or priority with Class A Notes in relation to both interest and
principal. RFSs and RFS Class A Notes are registered, Australian-traded
instruments denominated in Australian dollars ("A$") and sold to Australian
investors only and for the avoidance of doubt are not fungible with the Class A
Notes.
The Note Trust Deed contains provisions requiring the Note Trustee to have
regard to the interests of the Class A Noteholders and the Class B Noteholders
as regards all the powers, trusts, authorities, duties and discretions of the
Note Trustee (except where expressly provided otherwise), but requiring the Note
Trustee in any such case to have regard only to the interests of the Class A
Noteholders if, in the Note Trustee's opinion, there is a conflict between the
interests of the Class A Noteholders and the interests of the Class B
Noteholders.
The Security Trust Deed contains provisions requiring the Security Trustee
to give priority to the interests of the Class A Noteholders and the holders of
RFSs (if any) and RFS Class A Notes (if any), if there is a conflict between the
interests of such noteholders and any other Voting Mortgagee (as defined below).
3. Covenants of the Issuer Trustee
So long as any of the Class A Notes or the Class B Notes remains
outstanding, the Issuer Trustee has made certain covenants for the benefit of
Class A Noteholders and the Class B Noteholders which are set out in the Master
Trust Deed.
These covenants are as follows:
(a) The Issuer Trustee shall act continuously as trustee of the Trust until
the Trust is terminated as provided by the Master Trust Deed or the Issuer
Trustee has retired or been removed from office in the manner provided under the
Master Trust Deed.
(b) The Issuer Trustee shall:
(i) act honestly and in good faith in the performance of its duties and in
the exercise of its discretions under the Master Trust Deed;
(ii) subject to the Master Trust Deed, exercise such diligence and prudence
as a prudent person of business would exercise in performing its express
functions and in exercising its discretions under the Master Trust Deed, having
regard to the interests of the Class A Noteholders and the Class B Noteholders
and other creditors and beneficiaries of the Trust;
(iii) use its best endeavours to carry on and conduct its business in
so far as it relates to the Master Trust Deed in a proper and efficient manner;
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<PAGE>
(iv) keep, or ensure that the Trust Manager keeps, accounting records which
correctly record and explain all amounts paid and received by the Issuer
Trustee;
(v) keep the Trust separate from each other trust which is constituted
under the Master Trust Deed and account for assets and liabilities of the Trust
separately from those of other trusts constituted under the Master Trust Deed;
and
(vi) do everything and take all such actions which are necessary (including
obtaining all appropriate authorisations) to ensure that it is able to exercise
all its powers and remedies and perform all its obligations under the Master
Trust Deed, the Transaction Documents and all other deeds, agreements and other
arrangements entered into by the Issuer Trustee under the Master Trust Deed.
(c) Except as provided in the Master Trust Deed, the Issuer Trustee shall
not, nor shall it permit any of its officers to, sell, mortgage, charge or
otherwise encumber or part with possession of any asset of the Trust (the "Trust
Assets").
(d) The Issuer Trustee's officers, employees, agents, attorneys, delegates
and sub-delegates shall duly observe and perform the covenants and obligations
of the Master Trust Deed in the same manner as is required of the Issuer
Trustee, and the Issuer Trustee agrees to indemnify the Trust Manager for its
own benefit or for the benefit of the Trust against any loss or damage that the
Trust, the Trust Manager, the Servicer, the Class A Noteholders, the Class B
Noteholders, the Beneficiaries (as defined in the Master Trust Deed) the holders
of RFSs (if any) and the holders of RFS Class A Notes (if any) or other
creditors incur or sustain in connection with, or arising out of, any breach or
default by such officers, employees, agents, delegates and persons in the
observance or performance of any such covenant or obligation, to the extent that
the Issuer Trustee would have been liable if that breach or default had been the
Issuer Trustee's own act or omission.
(e) The Issuer Trustee will open and operate certain bank accounts in
accordance with the Master Trust Deed and the Series Notice.
(f) Subject to the Master Trust Deed and any Transaction Document to which
it is a party, the Issuer Trustee shall act on all directions given to it by the
Trust Manager in accordance with the terms of the Master Trust Deed.
(g) The Issuer Trustee shall properly perform the functions which are
necessary for it to perform under all Transaction Documents in respect of the
Trust.
4. Interest
(a) Payment Dates
Each Class A Note bears interest on its Invested Amount (as defined below)
from and including ___________ or such later date as may be agreed between the
Issuer Trustee and the Managers for the issue of the Class A Notes (the "Closing
Date"). Interest in respect of the Class A Notes will be payable quarterly in
arrear on the 19th day falling in __________ in respect of the period from (and
including) the Closing Date to (but excluding) that date, and thereafter on each
19 February, 19 May, 19 August and 19 November (each such date a "Payment Date"
and each such three month period beginning on each of 1 February, 1 May, 1
August and 1 November a "Quarter"). If any Payment Date would otherwise fall on
a day which is not a Business Day (as defined below), it shall be postponed to
the next day which is a Business Day (as defined below) unless it would thereby
fall into the next calendar month in which event it shall be brought forward to
the immediately preceding Business Day.
"Business Day" in this Class A Condition 4 and in Class A Conditions 5 and
9 below means any day (London time) other than a Saturday, Sunday or public
holiday on which banks are open for business in London and New York City.
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The period beginning on (and including) the Closing Date and ending on (but
excluding) the first Payment Date and each successive period beginning on (and
including) a Payment Date and ending on (but excluding) the next Payment Date is
called an "Interest Period". Interest payable on a Class A Note in respect of
any Interest Period or any other period will be calculated on the basis of the
actual number of days elapsed and a 360 day year.
Interest shall cease to accrue on any Class A Note from (and including):
(i) the date on which the Stated Amount (as defined in Class A Condition
5(a)) of that Class A Note is reduced to zero; or
(ii) if the Stated Amount on the due date for redemption is not zero, the
due date for redemption of the Class A Note, unless, upon due presentation,
payment of principal due is improperly withheld or refused, following which
interest shall continue to accrue on the Invested Amount of the Class A Note at
the rate from time to time applicable to the Class A Notes until the moneys in
respect of that Class A Note have been received by the Note Trustee or the
Principal Paying Agent and notice to that effect is given in accordance with
Class A Condition 12, or the Stated Amount of that Class A Note has been reduced
to zero.
(b) Interest Rate
The rate of interest applicable from time to time to the Class A Notes (the
"Interest Rate") will be determined by the Agent Bank on the basis of the
following paragraphs.
On the second London banking day before the beginning of each Interest
Period (each an "Interest Determination Date"), the Agent Bank will determine
the rate "USD-LIBOR-BBA" as an applicable Floating Rate Option under the
Definitions of the International Swaps and Derivatives Association, Inc.
("ISDA") (the "ISDA Definitions") being the rate applicable to any Interest
Period for three-month deposits in US Dollars which appears on the Telerate Page
3750 as of 11am London time, on the Interest Determination Date. If such rate
does not appear on the Telerate Page 3750, the rate for the Interest Period will
be determined as if the Issuer Trustee and Agent Bank had specified
"USD-LIBOR-Reference Banks" as the applicable Floating Rate Option under the
ISDA Definitions. "USD-LIBOR-Reference Banks" means that the rate for an
Interest Period will be determined on the basis of the rates at which deposits
in US Dollars are offered by the Reference Banks (being four major banks in the
London interbank market) at approximately 11.00 am, London time, on the Interest
Determination Date to prime banks in the London interbank market for a period of
three months commencing on the first day of the Interest Period and in a
Representative Amount (as defined in the ISDA Definitions). The Agent Bank will
request the principal London office of each of the Reference Banks to provide a
quotation of its rate. If at least two such quotations are provided, the rate
for that Interest Period will be the arithmetic mean of the quotations. If fewer
than two quotations are provided as requested, the rate for that Interest Period
will be the arithmetic mean of the rates quoted by major banks in New York City,
selected by the Agent Bank, at approximately 11.00 am, New York City time, on
that Interest Determination Date for loans in US Dollars to leading European
banks for a period of three months commencing on the first day of the Interest
Period and in a Representative Amount, provided that on the first day of the
first Interest Period USD-LIBOR-BBA shall be an interpolated rate calculated
with reference to the period from (and including) the Closing Date to (but
excluding) the first Interest Payment Date.
The Interest Rate applicable to the Class A Notes for such Interest Period
shall be the aggregate of (i) such Interest Rate or arithmetic mean as
determined by the Agent Bank and (ii) the margin of ____% applicable to the
Class A Notes.
There is no maximum or minimum Interest Rate.
(c) Determination of Interest Rate and Calculation of Interest
The Agent Bank will, as soon as practicable after 11.00 am (London time) on
each Interest Determination Date, determine the Interest Rate applicable to, and
calculate the amount of interest payable (the "Interest") for the immediately
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succeeding Interest Period. The Interest is calculated by applying the Interest
Rate for the Class A Notes to the Invested Amount (as defined in Class A
Condition 5(a)) of the Class A Note on the first day of the next Interest
Period, multiplying such product by the actual number of days in the relevant
Interest Period and dividing by 360 and rounding the resultant figure down to
the nearest cent (half a cent being rounded upwards). The determination of the
Interest Rate and the Interest by the Agent Bank shall (in the absence of
manifest error) be final and binding upon all parties.
(d) Notification and Publication of Interest Rate and Interest
The Agent Bank will cause the Interest Rate and the Interest applicable to
each Class A Note for each Interest Period and the relevant Payment Date to be
notified to the Issuer Trustee, the Trust Manager, the Note Trustee, the Paying
Agents, and, for so long as the Class A Notes are listed on the Official List of
the London Stock Exchange Limited (the "London Stock Exchange"), the London
Stock Exchange, and will cause the same to be published in accordance with Class
A Condition 12 on or as soon as possible after the date of commencement of the
relevant Interest Period. The Interest and the relevant Payment Date so
published may subsequently be amended (or appropriate alternative arrangements
made by way of adjustment) without notice in the event of a shortening of the
Interest Period.
(e) Determination or Calculation by the Note Trustee
If the Agent Bank at any time for any reason does not determine the
Interest Rate or calculate the Interest for a Class A Note, the Note Trustee
shall do so and each such determination or calculation shall be deemed to have
been made by the Agent Bank. In doing so, the Note Trustee shall apply the
foregoing provisions of this Condition, with any necessary consequential
amendments, to the extent that, in its opinion, it can do so, and, in all other
respects it shall do so in such a manner as it shall deem fair and reasonable in
all the circumstances.
(f) Agent Bank
The Issuer Trustee will procure that, so long as any of the Class A Notes
remains outstanding, there will at all times be an Agent Bank. The Issuer
Trustee reserves the right at any time to terminate the appointment of the Agent
Bank. Notice of that termination will be given to the Class A Noteholders. If
any person is unable or unwilling to continue to act as the Agent Bank, or if
the appointment of the Agent Bank is terminated, the Issuer Trustee will, with
the approval of the Note Trustee, appoint a successor Agent Bank to act as such
in its place, provided that neither the resignation nor removal of the Agent
Bank shall take effect until a successor approved by the Note Trustee has been
appointed.
5. Redemption and Purchase
(a) Mandatory Redemption in Part from Principal Collections and
Apportionment of Principal Collections between the Class A Notes, the Class B
Notes, the RFS Class A Notes and the RFSs
The Class A Notes shall be subject to mandatory redemption in part on any
Payment Date if on that date there are any Principal Collections (as defined
below) available to be distributed in relation to such Class A Notes. The
principal amount so redeemable in respect of each Class A Note prior to
enforcement of the Security Trust Deed (each a "Principal Payment") on any
Payment Date shall be the amount available for payment as set out in Class A
Condition 5(b) on the day which is four Business Days prior to the Payment Date
(the "Collection Determination Date") preceding that Payment Date multiplied by
the Invested Amount of the applicable Class A Note over the total Invested
Amount of all Class A Notes then outstanding (rounded down to the nearest cent
with half a cent being rounded upwards); provided always that no Principal
Payment on a Class A Note on any date may exceed the amount equal to the
Invested Amount of that Class A Note at that date less amounts charged off as at
that date, or to be charged off on the following Payment Date, as described in
Class A Condition 5(c) (that reduced amount being the "Stated Amount" of that
Class A Note).
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The "Invested Amount" of a Class A Note is equal to the Initial Invested
Amount (as defined herein) of such Class A Note less all payments previously
made in respect of principal in respect of such Class A Note. The "Initial
Invested Amount" of a Class A Note is its principal balance at the date of its
issuance.
"Principal Collections" means, in respect of a Collection Period (as
defined below) and as applicable on any Collection Determination Date, the
aggregate of:
(i) all amounts received by or on behalf of the Issuer Trustee from or on
behalf of borrowers under the Loans during the Collection Period in respect of
principal, in accordance with the terms of the Loans, including principal
prepayments;
(ii) all other amounts received by or on behalf of the Issuer Trustee under
or in respect of principal under the Loans and the Mortgages during that
Collection Period including:
(A) any amounts recovered in respect of enforcement of Loans and Mortgages
(other than under lender's mortgage insurance), on account of principal;
(B) any payments by Westpac to the Issuer Trustee on the repurchase of a
Loan under the Master Trust Deed during that Collection Period which are
attributable to principal;
(C) any payments by Westpac Securities Administration Limited (in its
capacity as trustee of any other trust established under the Master Trust Deed)
(the "WST Purchaser") on the purchase by the WST Purchaser of any assets of the
Trust which are attributable to principal;
(D) any Prepayment Costs (as defined in the Series Notice) applied towards
Prepayment Benefits (as defined in the Series Notice) under the Series Notice;
and
(E) any Prepayment Benefit Shortfall (as defined in the Series Notice) paid
by Westpac to the Trust under the Series Notice;
(iii) all amounts received by or on behalf of the Issuer Trustee during
that Collection Period from any provider of a Support Facility (as defined in
the Series Notice) (other than the Currency Swap) under that Support Facility
and which the Trust Manager determines should be accounted for to reduce any
principal loss on a Loan, being the total amount outstanding under a Loan after
applying all proceeds from the enforcement of the Loan and related Mortgages (a
"Liquidation Loss") to the extent that Liquidation Loss is attributable to
principal;
(iv) all amounts received by or on behalf of the Issuer Trustee during that
Collection Period:
(A) from Westpac or the WST Seller Trustee (each an "Approved Seller") in
respect of any breach of a representation, warranty or undertaking contained in
the Master Trust Deed or the Series Notice;
(B) from an Approved Seller under any obligation under the Master Trust
Deed or the Series Notice to indemnify or reimburse the Issuer Trustee for any
amount;
(C) from the Servicer, in respect of any breach of any representation,
warranty or undertaking contained in the Servicing Agreement; and
(D) from the Servicer under any obligation under the Servicing Agreement to
indemnify or reimburse the Issuer Trustee for any amount,
in each case, which are determined by the Trust Manager to be in respect of
principal payable under the Loans and the Mortgages;
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(v) any amounts in the nature of principal received by or on behalf of the
Issuer Trustee during that Collection Period pursuant to the sale of any asset
comprised in the Trust (including any amount received by the Issuer Trustee on
the issue of Notes and which was not used to purchase Loans or Mortgages, and
which the Trust Manager determines is surplus to the requirements of the Trust);
(vi) (for the purposes of clause 6.11 of the Series Notice only) any amount
of Excess Available Income (as defined in the Series Notice) to be applied to
pay a Principal Charge Off or a Carryover Charge Off (as defined in the Series
Notice);
(vii) any amount received by or on behalf of the Issuer Trustee during that
Collection Period as proceeds from the issue of any RFS to the extent not
applied to reimburse amounts drawn under the Redraw Facility dated __________
between the Issuer Trustee, the Trust Manager and Westpac (the "Redraw
Facility");
(viii) any Excess Available Income to be applied to Principal Draws (as
defined in the Series Notice) made on a previous Payment Date;
(ix) any Prepayment Calculation Adjustment (as defined in the Series
Notice) for that Collection Period;
(x) any Substitution Net Transfer Amount (Principal) (as defined in the
Series Notice) received by the Trust from a WST Purchaser with respect to that
Collection Period;
(xi) any amounts remaining on deposit in the Collection Account on the
previous Payment Date (after all distributions from the Collection Account for
such Payment Date have been made);
less any amounts deducted by or paid to Westpac to reimburse Redraws funded by
Westpac for which Westpac has not previously been reimbursed. A premium
receivable by the Issuer Trustee on the entry into a replacement Currency Swap
under clause 6.26 of the Series Notice is not treated as a Principal Collection.
"Collection Period" means, in relation to a Payment Date, the period from
(and including) the tenth day of the Quarter preceding the Quarter in which the
Payment Date occurs to (and including) the ninth day of the Quarter in which the
Payment Date occurs. The first Collection Period is the period from (but
excluding) __________ (the "Cut-Off Date") to (and including) __________. The
last Collection Period is the period from (but excluding) the last day of the
previous Collection Period to (and including) the termination date of the Trust.
(b) Initial Principal Distributions
Principal Collections will be distributed as follows on each Payment Date
before any payments in respect of the Notes:
(i) first, to repay any Redraws provided by Westpac in relation to Loans to
the extent that Westpac has not previously been reimbursed in relation to those
Redraws;
(ii) second, to repay all principal outstanding under the Redraw Facility
on that Payment Date;
(iii) third, to allocate to Total Available Funds any Principal Draw (as
defined in the Series Notice); and
(iv) fourth, to repay pari passu and rateably all amounts outstanding under
the RFSs (if any).
(c) Principal Allocation Method
On each Collection Determination Date, the Trust Manager will determine the
A$ Equivalent of the aggregate of the Class B Stated Amounts divided by the sum
of (i) the A$ Equivalent of the Total Stated Amount at that time, plus (ii) the
Redraw Limit at that time, plus (iii) the aggregate of the RFS Stated Amount at
that time, plus (iv) the aggregate
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of the RFS Class A Stated Amounts at that time (the "Subordinated Percentage").
The Trust Manager will calculate the Subordinated Percentage so as to determine
the appropriate principal distribution methodology to apply for that Collection
Period, as described below.
(d) Applicability of Serial Method 1
If, on any Collection Determination Date:
(i) the Subordinated Percentage at the previous Collection Determination
Date was greater than or equal to twice the Initial Subordinated Percentage;
(ii) that Collection Determination Date occurs on or before the third
anniversary of the Closing Date;
(iii) the Total Invested Amount as at that Collection Determination Date as
a percentage of the Total Initial Invested Amount, is greater than or equal to
10%:
(iv) the Average Quarterly Percentage as at that Collection Determination
Date:
(A) does not exceed 2% and the Total Carryover Charge Off on that
Collection Determination Date does not exceed 30% of the Class B Initial
Invested Amount; or
(B) does not exceed 4% and the Total Carryover Charge Off on such
Collection Determination Date does not exceed 10% of the Class B Initial
Invested Amount; and
(v) the Stated Amounts of all Class B Notes as at that Collection
Determination Date exceeds 0.25% of the aggregate of all Initial Invested
Amounts of all Class A Notes and all Class B Notes as at the Collection
Determination Date;
then Principal Collections will be allocated serially in accordance with Serial
Method I set out in paragraph (e) below.
(e) Serial Method 1
On any Collection Determination Date, if the Trust Manager determines that
Serial Method 1 should apply, the Issuer Trustee (based on instructions from the
Trust Manager) will pay out of Principal Collections for the relevant Collection
Period which remain after the Initial Principal Distributions, on the Payment
Date following that Collection Determination Date the following amounts in the
following priority:
(i) first pari passu and rateably between themselves:
(A) as a payment, denominated in A$, to the Currency Swap Providers under
the relevant swap confirmations relating to the Class A Notes of an amount equal
to the lesser of:
(1) the Class A Forex Percentage of the sum of:
(aa) the Class A Percentage of Principal Collections remaining after all
Initial Principal Distributions; and
(bb) 50% of the Class B Percentage of those Principal Collections; and
(2) the A$ Equivalent of the Class A Stated Amounts for all Class A Notes;
and
(B) as a payment denominated in A$ to the holders of the RFS Class A Notes
(if any) of an amount equal to the lesser of:
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(1) the RFS Class A Forex percentage of the sum of:
(aa) the Class A Percentage of Principal Collections remaining after all
Initial Principal Distributions; and
(bb) 50% of the Class B Percentage of those Principal Collections; and
(2) the RFS Class A Stated Amounts for all RFS Class A Notes (if any); and
(ii) second, as a payment, denominated in A$, to the Currency Swap
Providers under the relevant swap confirmations relating to the Class B Notes of
an amount equal to 50% of the Class B Percentage of those Principal Collections
remaining after all Initial Principal Distributions.
(f) Applicability of Serial Method 2
If, on any Collection Determination Date:
(i) the Subordinated Percentage at the previous Collection Determination
Date was greater than or equal to twice the Initial Subordinated Percentage;
(ii) that Collection Determination Date occurs after the third anniversary
of the Closing Date;
(iii) the Total Invested Amount as at that Collection Determination Date,
as a percentage of the Total Initial Invested Amount, is greater than or equal
to 10%;
(iv) the Average Quarterly Percentage as at the Collection Determination
Date:
(A) does not exceed 2% and the Total Carryover Charge Off on that
Collection Determination Date does not exceed 30% of the Class B Initial
Invested Amount; or
(B) does not exceed 4% and the Total Carryover Charge Off on that
Collection Determination Date does not exceed 10% of the Class B Initial
Invested Amount; and
(v) the Stated Amount of the Class B Notes as at that Collection
Determination Date exceeds 0.25% of the aggregate of all Initial Invested
Amounts of all Class A Notes and all Class B Notes and the US$ Equivalent of the
Invested Amounts of all RFS Class A Notes (if any);
then Principal Collections will be allocated serially in accordance with Serial
Method 2 set out in paragraph (g) below.
(g) Serial Method 2
On any Collection Determination Date, if the Trust Manager determines that
Serial Method 2 shall apply, the Issuer Trustee (based on instructions from the
Trust Manager) will pay out of Principal Collections for the relevant Collection
Period which remain after the Initial Principal Distributions on the Payment
Date following that Collection Determination Date in the following amounts in
the following priority:
(i) first, pari passu and rateably between themselves:
(A) as a payment, denominated in A$, to the Currency Swap Providers under
the relevant swap confirmations relating to the Class A Notes of an amount equal
to the lesser of:
(1) the Class A Forex Percentage of the Class A Percentage of Principal
Collections remaining after all Initial Principal Distributions; and
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(2) the A$ Equivalent of the Class A Stated Amounts for all Class A Notes;
and
(B) as a payment denominated in A$ to the holders of the RFS Class A Notes
(if any) of an amount equal to the lesser of:
(1) the RFS Class A Forex Percentage of the Class A Percentage of those
Principal Collections remaining after all Initial Principal Distributions: and
(2) the RFS Class A Stated Amounts for all RFS Class A Notes (if any); and
(ii) second as a payment, denominated in A$, to the Currency Swap Providers
under the relevant swap confirmations relating to the Class B Notes of an amount
equal to the Class B Percentage of those Principal Collections.
(h) Sequential Method
On any Collection Determination Date, if the Trust Manager determines that
neither Serial Method I nor Serial Method 2 (set out in Conditions 5(d) to (g)
above) applies, the Issuer Trustee (based on instructions from the Trust
Manager) will pay out of Principal Collections for the relevant Collection
Period which remain after the Initial Principal Distributions the following
amounts in the following priority:
(i) first pari passu and rateably between themselves:
(A) as a payment, denominated in A$, to the Currency Swap Providers under
the relevant swap confirmations relating to the Class A Notes of an amount equal
to the lesser of:
(1) the Class A Forex Percentage of the amount available for distribution
under this paragraph (i) after all Initial Principal Distributions; and
(2) the A$ Equivalent of the Class A Stated Amounts for all Class A Notes;
and
(B) as a payment, denominated in A$, to the holders of the RFS Class A
Notes (if any) of an amount equal to the lesser of:
(1) the RFS Class A Forex Percentage of the amount available for
distribution under this paragraph (i) after all Initial Principal Distributions;
and
(2) the RFS Class A Stated Amounts for all RFS Class A Notes (if any); and
(ii) second, as a payment, denominated in A$, to the Currency Swap
Providers under the relevant swap confirmations relating to the Class B Notes of
an amount equal to the lesser of:
(A) the amount available for distribution under this paragraph (ii) after
the application of paragraph (i); and
(B) the A$ Equivalent of the Class B Stated Amounts for all Class B Notes.
(i) General
No amount of principal will be paid to a Noteholder in excess of the Stated
Amount applicable to the Notes held by that Noteholder.
(j) Distribution of Excess Available Income
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On each Collection Determination Date Excess Available Income for the
Collection Period relating to that Collection Determination Date will be applied
in the following order of priority:
(i) to reimburse Principal Charge Offs for that Collection Period;
(ii) pari passu and rateably between themselves (based on the Stated Amount
of the RFSs (if any), the Stated Amount of the RFS Class A Notes (if any), the
Principal Outstanding under the Redraw Facility and the A$ Equivalent of the
Stated Amount of the Class A Notes):
(A) as a payment to the RFSs (if any) in or towards reinstating the Stated
Amount of the RFSs, to the extent of any Carryover RFS Charge Offs;
(B) as a payment to the RFS Class A Notes (if any) in or towards
reinstating the Stated Amount of the RFS Class A Notes, to the extent of any
Carryover RFS Class A Charge Offs;
(C) as a payment to the Currency Swap Providers under the relevant swap
confirmations relating to the Class A Notes, of the A$ Equivalent of any
Carryover Class A Charge Offs; and
(D) as a repayment under the Redraw Facility Agreement, as a reduction of,
and to the extent of, any Carryover Redraw Charge Offs;
(iii) as a payment, denominated in A$, to the Currency Swap Providers under
the relevant swap confirmations relating to the Class B Notes of the A$
Equivalent of any Carryover Class B Charge Offs; and
(iv) to all Principal Draws which have not been repaid as at that Payment
Date.
Any amount to be paid pursuant to paragraphs (ii) and (iii) will be paid on
the Payment Date immediately following the Collection Determination Date.
(k) US$ Account
The Issuer Trustee shall direct the Currency Swap Providers to pay all
amounts denominated in US$ payable to the Issuer Trustee by the Currency Swap
Providers under the Currency Swaps into the US$ Account or to the Principal
Paying Agent under the Agency Agreement on behalf of the Issuer Trustee. The
Issuer Trustee shall pay all such amounts as follows, and in accordance with the
Note Trust Deed and the Agency Agreement:
(i) under Class A Condition 4, pari passu in relation to the Class A Notes
as payments of Interest on those Class A Notes;
(ii) under Class A Condition 4, pari passu in relation to the Class B Notes
as payments of Interest on those Class B Notes;
(iii) under Class A Condition 5(j)(ii)(C), pari passu in relation to the
Class A Notes in or towards reinstating the Stated Amount of those Class A
Notes, to the extent of the Carryover Class A Charge Offs;
(iv) under Class A Condition 5(j)(iii), pari passu in relation to Class B
Notes in or towards reinstating the Stated Amount of those Class B Notes, to the
extent of the Carryover Class B Charge Offs;
(v) under Class A Condition 5(e)(i)(A), 5(g)(i)(A) and 5(h)(i)(A) pari
passu in relation to the Class A Notes as Class A Principal Payments until the
Class A Stated Amounts have been reduced to zero; and
(vi) under Class A Condition 5(e)(ii), 5(g)(ii) and 5(h)(ii) pari passu in
relation to the Class B Notes as Class B Principal Payments until the Class B
Stated Amounts have been reduced to zero.
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(l) Charge Offs
If the Principal Charge Offs (as defined in the Series Notice) for any
Collection Period exceed the Excess Available Income (as defined in the Series
Notice) calculated on the Collection Determination Date for that Collection
Period, the Trust Manager must, on and with effect from the Payment Date
immediately following the end of the Collection Period:
(i) reduce pari passu the Class B Stated Amount of each of the Class B
Notes by the US$ Equivalent of the amount of that excess which is attributable
to each Class B Note until the Class B Stated Amount is zero; and
(ii) if the Class B Stated Amount is zero and any amount of that excess has
not been applied under paragraph (i), reduce pari passu and rateably as between
themselves (based on the Stated Amount of the RFSs (if any), the Principal
Outstanding under the Redraw Facility, the Stated Amount of the RFS Class A
Notes (if any) and the A$ Equivalent of the Stated Amount of the Class A Notes):
(A) the Class A Stated Amount on each of the Class A Notes by the US$
Equivalent of the balance of that excess which is attributable to each Class A
Note until the Class A Stated Amount of that Class A Note is zero;
(B) the RFS Class A Stated Amount on each of the RFS Class A Notes (if any)
by the balance of that excess which is attributable to each RFS Class A Note
until the RFS Class A Stated Amount of that RFS Class A Note is zero;
(C) the RFS Stated Amount on each of the RFSs (if any) by the balance of
that excess which is attributable to each RFS until the RFS Stated Amount is
zero: and
(D) the principal outstanding under the Redraw Facility by the balance of
that excess until the Principal Outstanding is zero.
(m) Calculation of Principal Payments, Stated Amount and Bond Factor
(i) On each Collection Determination Date, the Trust Manager shall
determine:
(A) the amount of any Principal Payment in respect of each Class A Note on
the Payment Date following that Collection Determination Date;
(B) the Stated Amount and Invested Amount of each Class A Note as of the
first day of the next following Interest Period (after deducting any Principal
Payment due to be made in respect of each Class A Note on the next Payment
Date); and
(C) the fraction in respect of each Class A Note expressed as a decimal to
the seventh point (the "Bond Factor" of which the numerator is the aggregate of
the Invested Amount of all Class A Notes at that date less all Principal
Payments to be made on the following Payment Date, and the denominator is the
Initial Invested Amount of the Class A Notes.
(ii) The Trust Manager will notify the Note Trustee, the Principal Paying
Agent, the Agent Bank and (for so long as the Class A Notes are listed on the
London Stock Exchange) the London Stock Exchange by not later than the
Collection Determination Date immediately preceding the relevant Payment Date of
each determination of a Principal Payment, Invested Amount, Stated Amount and
Bond Factor and will immediately cause details of each of those determinations
to be published in accordance with Condition 12. If no Principal Payment is due
to be made on the Class A Notes on any Payment Date a notice to this effect will
be given to the Class A Noteholders in accordance with Class A Condition 12.
(iii) If the Trust Manager does not at any time for any reason determine a
Principal Payment, the Invested Amount, the Stated Amount or the Bond Factor
applicable to Class A Notes in accordance with this paragraph, the
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Principal Payment, Invested Amount, the Stated Amount and the Bond Factor shall
be determined by the Note Trustee in accordance with this paragraph and
paragraph (i) above (but based on the information in its possession) and each
such determination or calculation shall be deemed to have been made by the Trust
Manager.
(iv) The Trust Manager will deliver to the Principal Paying Agent a
quarterly servicing report as set forth in clause 11 of the Note Trust Deed.
(n) Redemption for Taxation or Other Reasons
If the Trust Manager satisfies the Issuer Trustee and the Note Trustee
immediately prior to giving the notice referred to below that either (i) on the
next Payment Date the Issuer Trustee would be required to deduct or withhold
from any payment of principal or interest in respect of the Class A Notes any
amount for or on account of any present or future taxes, duties, assessments or
governmental charges of whatever nature imposed, levied, collected, withheld or
assessed by the Commonwealth of Australia or any of its political sub-divisions
or any of its authorities or (ii) the total amount payable in respect of
interest in relation to the Loans for a Collection Period ceases to be
receivable (whether or not actually received) by the Issuer Trustee during such
Collection Period by reason of any present or future taxes, duties, assessments
or governmental charges of whatever nature imposed, levied, collected, withheld
or assessed by the Commonwealth of Australia or any of its political
sub-divisions or any of its authorities, the Issuer Trustee must, when so
directed by the Trust Manager (at any time at the Trust Manager's option)
(provided that the Issuer Trustee will be in a position on such Payment Date to
discharge (and will so certify to the Issuer Trustee and Note Trustee) all its
liabilities in respect of the Class A Notes and any amounts required under the
Security Trust Deed to be paid in priority to or pari passu with the Class A
Notes), upon having given not more than 60 nor less than 30 days' notice to the
Class A Noteholders in accordance with Class A Condition 12 redeem all, but not
some only, of the Class A Notes at their Invested Amount (or at the option of
the holders of 75% of the aggregate Invested Amount of Class A Notes at the
time, at their Stated Amount), together with accrued interest to the date of
redemption on any subsequent Payment Date, provided that the holders of 75% of
the aggregate Invested Amount of Class A Notes at the time may elect, and shall
notify the Issuer Trustee and the Trust Manager, that they do not require the
Issuer Trustee to redeem the Class A Notes in the circumstances described above.
(o) Optional Redemption in whole
On any Payment Date, and upon giving no more than 60 nor less than 30 days'
notice to the Note Trustee and the Security Trustee, on which the aggregate
principal outstanding of the Loans is less than 10% of the aggregate principal
outstanding of the Loans at the Cut-Off Date, the Issuer Trustee may redeem all
(but not some only) of the Class A Notes at their Stated Amount.
(p) Redemption on Maturity
If not otherwise redeemed, the Class A Notes will be redeemed at their
Stated Amount on the Payment Date falling in July, 2029.
(q) Cancellation
All Class A Notes redeemed in full pursuant to the foregoing provisions
will be cancelled forthwith, and may not be resold or reissued.
(r) Certification
For the purposes of any redemption made pursuant to this Condition 5 the
Note Trustee may rely upon an officer's certificate under the Note Trust Deed
from the Trust Manager on behalf of the Issuer Trustee certifying or stating the
opinion of each person signing such certificate as:
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(i) to the fair value (within 90 days of such release) of the property or
securities proposed to be released from the Security Trust Deed;
(ii) that in the opinion of such person the proposed release will not
impair the security under the Security Trust Deed in contravention of the
provisions of the Security Trust Deed or the Note Trust Deed;
(iii) that the Issuer Trustee will be in a position to discharge all its
liabilities in respect of the relevant Class A Notes; and
(iv) any amounts required under the Security Trust Deed to be paid in
priority to or pari passu with those Class A Notes,
and such officer's certificate shall be conclusive and binding on the
Issuer Trustee, the Note Trustee and the holders of those Class A Notes.
(s) Purchases
The Issuer Trustee may not purchase any Class A Notes at any time.
6. Payments
(a) Method of Payment
Any instalment of interest or principal, payable on any Class A Note which
is punctually paid or duly provided for by the Issuer Trustee to the Principal
Paying Agent on the applicable Payment Date or Maturity Date shall be paid to
the person in whose name such Class A Note is registered on the Record Date, by
cheque mailed first-class, postage prepaid, to such person's address as it
appears on the Note Register on such Record Date, except that, unless Definitive
Notes have been issued pursuant to clause 3.3 of the Note Trust Deed, with
respect to Class A Notes registered on the Record Date in the name of the
nominee of DTC (initially, such nominee to be Cede & Co.), payment will be made
by wire transfer in immediately available funds to the account designated by
such nominee and except for the final instalment of principal payable with
respect to such Class A Note on a Payment Date or Maturity Date.
(b) Initial Principal Paying Agent
The initial Principal Paying Agent is ______________________________ at its
office at __________________________________.
(c) Paying Agents
The Issuer Trustee (or the Trust Manager on its behalf after advising the
Issuer Trustee thereof) may at any time (with the previous written approval of
the Note Trustee) vary or terminate the appointment of any Paying Agent and
appoint additional or other Paying Agents, provided that it will at all times
maintain a Paying Agent having a specified office in London and in New York
City. Notice of any such termination or appointment and of any change in the
office through which any Paying Agent will act will be given in accordance with
Class A Condition 12.
(d) Due date for redemption
If the due date for redemption in full of a Class A Note is not a Payment
Date, the interest accrued in respect of the period from the preceding Payment
Date (or from the Closing Date as the case may be) shall be payable only against
presentation or surrender of the relevant Class A Note.
(e) Payments on Business Days
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If the due date for payment of any amount of principal or Interest in
respect of any Class A Note is not a Business Day then payment will not be made
until the next succeeding Business Day and the holder thereof shall not be
entitled to any further interest or other payment in respect of that delay. In
this Condition 6 the expression "Business Day" means any day (other than a
Saturday, Sunday or a public holiday) on which banks are open for business in
the place where the specified office of the Paying Agent is situated and, in the
case of payment by transfer to a US dollar account, in New York City and prior
to any exchange of the Book-Entry Note (in respect of the Class A Notes) for any
definitive Class A Notes, on which DTC is open for business.
(f) Interest
If Interest is not paid in respect of a Class A Note on the date when due
and payable (other than because the due date is not a Business Day), that unpaid
Interest shall itself bear interest at the Interest Rate applicable from time to
time to the Class A Notes until the unpaid interest, and interest on it, is
available for payment and notice of that availability has been duly given in
accordance with Class A Condition 12.
7. Taxation
All payments in respect of the Class A 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 Trustee or any Paying
Agent is required by applicable law to make any such payment in respect of the
Class A 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 Trustee or that 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 Trustee nor any Paying Agent will be obliged to make any
additional payments to Class A Noteholders in respect of that withholding or
deduction.
8. Prescription
A Class A Note shall become void in its entirety unless surrendered for
payment within ten years of the Relevant Date in respect of any payment thereon
the effect of which would be to reduce the Stated Amount of that Class A Note to
zero. After the date on which a Class A Note becomes void in its entirety, no
claim may be made in respect of it.
As used in these Conditions, the "Relevant Date" means the date on which a
payment first becomes due but, if the full amount of the money payable has not
been received by the Principal Paying Agent or the Note Trustee on or prior to
that date, it means the date on which, the full amount of such money having been
so received, notice to that effect is duly given in accordance with Class A
Condition 12.
9. Events of Default
Each of the following is an "Event of Default":
(a) the Issuer Trustee fails to pay:
(i) any interest within 10 Business Days of the Payment Date on which the
interest was due to be paid to Class A Noteholders, Class B Noteholders or
holders of RFSs or holders of RFS Class A Notes, or
(ii) any other amount owing to Class A Noteholders, Class B Noteholders or
holders of RFSs or holders of RFS Class A Notes or any other Mortgagee (as
defined in the Security Trust Deed) within 10 Business Days of the due date for
payment (or within any applicable grace period agreed with the Mortgagee or
where the Mortgagee is a Noteholder, with the Note Trustee).
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(b) the Issuer Trustee fails to perform or observe any other provisions
(other than an obligation referred to in paragraph (a)) of a Transaction
Document (other than the Underwriting Agreement) where such failure will have a
material and adverse affect on the amount of any payment to be made to any
Noteholder, or will materially and adversely affect the timing of such payment,
and that default (if in the opinion of the Security Trustee capable of remedy
(that opinion, being subject to the approval of the Note Trustee in accordance
with the provisions of the Security Trust Deed) is not remedied within 30 days
(or such longer period as may be specified in the notice, that longer period
having been approved by the Note Trustee, for so long as amounts outstanding
under the Offered Notes are 75% of the Secured Money) after written notice from
the Security Trustee requiring the failure to be remedied.
(c) any of the following occurs in relation to the Issuer Trustee (in its
personal capacity or as Trustee of the Trust):
(i) an administrator of the Issuer Trustee is appointed; or
(ii) except for the purpose of a solvent reconstruction or amalgamation:
(A) an application or an order is made, proceedings are commenced, a
resolution is passed or proposed in a notice of meeting or an application to a
court or other steps (other than frivolous or vexatious applications,
proceedings, notices and steps) are taken for:
(1) the winding up, dissolution or administration of the Issuer Trustee; or
(2) the Issuer Trustee entering into an arrangement, compromise or
composition with or assignment for the benefit of its creditors or a class of
them; or
(B) the Issuer Trustee ceases, suspends or threatens to cease or suspend
the conduct of all or substantially all of its business or disposes of or
threatens to dispose of substantially all of its assets; or
(iii) the Issuer Trustee is, or under applicable legislation is taken to
be, unable to pay its debts (other than as the result of a failure to pay a debt
or claim the subject of a good faith dispute) or stops or suspends or threatens
to stop or suspend payment of all or a class of its debts (except, where this
occurs in relation to another trust of which it is the trustee):
(iv) a receiver, receiver and manager or administrator is appointed (by the
Issuer Trustee or by any other person) to all or substantially all of the assets
and undertaking of the Issuer Trustee or any part thereof (except, in the case
of the Issuer Trustee where this occurs in relation to another trust of which it
is the trustee); or
(v) anything analogous to an event referred to in paragraphs (i) to (iv)
(inclusive) or having substantially similar effect, occurs with respect to the
Issuer Trustee;
(d) the charge created by the Security Trust Deed is not or ceases to be a
first ranking charge over the Trust Assets, or any other obligation of the
Issuer Trustee (other than as mandatorily preferred by law) ranks ahead of or
pari passu with any of the moneys secured by the Security Trust Deed;
(e) any security interest over the Trust Assets is enforced;
(f) all or any part of any Transaction Document, other than the Redraw
Facility or the Basis Swap (each as defined in the Series Notice), is terminated
or is or becomes void, illegal, invalid, unenforceable or of limited force and
effect, or a party becomes entitled to terminate, rescind or avoid all or part
of any Transaction Document (other than the Redraw Facility or the Basis Swap);
or
(g) without the prior consent of the Security Trustee (that consent, in
accordance with the provisions of the Security Trust Deed, being subject to the
prior written consent of the Note Trustee in accordance with the provisions of
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the Security Trust Deed), (i) the Trust is wound up, or the Issuer Trustee is
required to wind up the Trust under the Master Trust Deed or applicable law, or
the winding up of the Trust commences; (ii) the Trust is held or is conceded by
the Issuer Trustee not to have been constituted or to have been imperfectly
constituted; or (iii) unless another trustee is appointed to the Trust under the
Relevant Documents, the Issuer Trustee ceases to be authorised under the Trust
to hold the property of the Trust in its name and to perform its obligations
under the Relevant Documents.
In the event that the security constituted by the Security Trust Deed
becomes enforceable following an event of default under the Notes any funds
resulting from the realization of such security shall be applied in accordance
with the order of priority of payments as stated in the Security Trust Deed.
10. Enforcement
(a) At any time after an Event of Default occurs, the Security Trustee may,
with the prior written consent of the Note Trustee in accordance with the
provisions of the Security Trust Deed and shall, if so directed by (a) the Note
Trustee alone, where the Note Trustee is the only Voting Mortgagee, or otherwise
(b) an Extraordinary Resolution (being 75% of votes capable of being cast by
Voting Mortgagees present or in person or by proxy of the relevant meeting or a
written resolution signed by all Voting Mortgagees) of the Voting Mortgagees
(which includes the Note Trustee on behalf of Noteholders, but not the
Noteholders themselves), declare the Class A Notes immediately due and payable
and enforce the Security Trust Deed. If an Extraordinary Resolution of Voting
Mortgagees referred to in sub-paragraph (b) above elects not to direct the
Security Trustee to enforce the Security Trust Deed, in circumstances where the
Security Trustee could enforce, the Note Trustee may nonetheless, and shall at
the direction of the Class A Noteholders, direct the Security Trustee to enforce
the Security Trust Deed on behalf of the Noteholders.
"Voting Mortgagee" means:
(a) for so long as the amounts outstanding under the Class A Notes and the
Class B Notes are 75% or more of all amounts secured by the Security Trust Deed,
the Note Trustee alone; and
(b) at any other time:
(i) the Note Trustee, acting on behalf of the Noteholders under the Note
Trust Deed and the Security Trust Deed: and
(ii) each other Mortgagee under the Security Trust Deed (other than the
Noteholders).
Subject to being indemnified in accordance with the Security Trust Deed,
the Security Trustee shall take all action necessary to give effect to any
direction by the Note Trustee where it is the only Voting Mortgagee or to any
Extraordinary Resolution of the Voting Mortgagees and shall comply with all
directions given by the Note Trustee where it is the only Voting Mortgagee or
contained in or given pursuant to any Extraordinary Resolution of the Voting
Mortgagees in accordance with the Security Trust Deed.
No Noteholder is entitled to enforce the Security Trust Deed or to appoint
or cause to be appointed a receiver to any of the assets secured by the Security
Trust Deed or otherwise to exercise any power conferred by the terms of any
applicable law on chargees except as provided in the Security Trust Deed.
(b) If any of the Class A Notes remains outstanding and are due and payable
otherwise than by reason of a default in payment of any amount due on the Class
A Notes, the Note Trustee must not vote under the Security Trust Deed to, or
otherwise direct the Security Trustee to, dispose of the Mortgaged Property
unless either:
(i) a sufficient amount would be realised to discharge in full all amounts
owing to the Class A Noteholders and any other amounts payable by the Issuer
Trustee ranking in priority to or pari passu with the Class A Notes; or
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(ii) the Note Trustee is of the opinion, reached after considering at any
time and from time to time the advice of a merchant bank or other financial
adviser selected by the Note Trustee, that the cash flow receivable by the
Issuer Trustee (or the Security Trustee under the Security Trust Deed) will not
(or that there is a significant risk that it will not) be sufficient, having
regard to any other relevant actual, contingent or prospective liabilities of
the Issuer Trustee, to discharge in full in due course all the amounts referred
to in paragraph (i).
(c) Neither the Note Trustee nor the Security Trustee will be liable for
any decline in the value, nor any loss realised upon any sale or other
dispositions made under the Security Trust Deed, of any Mortgaged Property or
any other property which is charged to the Security Trustee by any other person
in respect of or relating to the obligations of the Issuer Trustee or any third
party in respect of the Issuer Trustee or the Class A Notes or relating in any
way to the Mortgaged Property. Without limitation, neither the Note Trustee nor
the Security Trustee shall be liable for any such decline or loss directly or
indirectly arising from its acting, or failing to act, as a consequence of an
opinion reached by it.
(d) The Note Trustee shall not be bound to vote under the Security Trust
Deed, or otherwise direct the Security Trustee under the Security Trust Deed or
to take any proceedings, actions or steps under, or any other proceedings
pursuant to or in connection with the Security Trust Deed, the Note Trust Deed,
any Class A Notes, unless directed or requested to do so by Noteholders holding
at least 75% of the aggregate Invested Amount of Class A Notes or Class B Notes
(as the case may be) at the time; and then only if the Note Trustee is
indemnified to its satisfaction against all action, proceedings, claims and
demands to which it may render itself liable and all costs, charges, damages and
expenses which it may incur by so doing.
(e) Only the Security Trustee may enforce the provisions of the Security
Trust Deed and neither the Note Trustee nor any holder of a Class A Note is
entitled to proceed directly against the Issuer Trustee to enforce the
performance of any of the provisions of the Security Trust Deed, the Class A
Notes (including these Class A Conditions).
(f) The rights, remedies and discretions of the Class A Noteholders under
the Security Trust Deed including all rights to vote or give instructions or
consent can only be exercised by the Note Trustee on behalf of the Class A
Noteholders in accordance with the Security Trust Deed. The Security Trustee may
rely on any instructions or directions given to it by the Note Trustee as being
given on behalf of the Class A Noteholders from time to time and need not
enquire whether the Note Trustee or the Noteholders from time to time have
complied with any requirements under the Note Trust Deed or as to the
reasonableness or otherwise of the Note Trustee. The Security Trustee is not
obliged to take any action, give any consent or waiver or make any determination
under the Security Trust Deed without being directed to do so by the Note
Trustee or the Voting Mortgagees in accordance with the Security Trust Deed.
Upon enforcement of the security created by the Security Trust Deed, the
net proceeds thereof may be insufficient to pay all amounts due on redemption to
the Noteholders. The proceeds from enforcement (which will not include amounts
required by law to be paid to the holder of any prior ranking security interest,
the proceeds of or amounts credited to the collateral account under the
Liquidity Facility Agreement (as defined in the Master Trust Deed) and payable
to the Liquidity Facility Provider (as defined in the Master Trust Deed) and the
proceeds of cash collateral lodged with and payable to a Swap Provider or other
provider of a Support Facility (as defined in the Master Trust Deed)) will be
applied in the order of priority as set out in the Security Trust Deed. Any
claims of Noteholders remaining after realization of the security and
application of the proceeds as aforesaid shall, except in certain limited
circumstances, be extinguished.
11. Replacements of Class A Notes
If any Class A Note is lost, stolen, mutilated, defaced or destroyed, it
may be replaced at the specified office of the Principal Paying Agent upon
payment by the claimant of the expenses incurred in connection with that
replacement and on such terms as to evidence and indemnity as the Issuer Trustee
may reasonably require. Mutilated or defaced Class A Notes must be surrendered
before replacements will be issued.
12. Notices
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All notices, other than notices given in accordance with the following
paragraph, to Class A Noteholders shall be deemed given if in writing and
mailed, first-class, postage prepaid to each Class A Noteholder, at his or her
address as it appears on the Note Register, not later than the latest date, and
not earlier than the earliest date, prescribed for the giving of such notice. In
any case where notice to Class A Noteholders is given by mail, neither the
failure to mail such notice nor any defect in any notice so mailed to any
particular Class A Noteholder shall affect the sufficiency of such notice with
respect to other Class A Noteholders, and any notice that is mailed in the
manner herein provided shall conclusively be presumed to have been duly given.
A notice may be waived in writing by the relevant Class A Noteholder,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Class A Noteholders shall be filed with the
Note Trustee but such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such a waiver.
Any such notice shall be deemed to have been given on the date such notice
is deposited in the mail.
In case, by reason of the suspension of regular mail services as a result
of a strike, work stoppage or similar activity, it shall be impractical to mail
notice of any event to Class A Noteholders when such notice is required to be
given, then any manner of giving such notice as the Trustee shall direct the
Note Trustee shall be deemed to be a sufficient giving of such notice.
Any notice specifying a Payment Date, an Interest Rate, Interest payable, a
Principal Payment (or the absence of a Principal Payment), an Invested Amount, a
Stated Amount or a Bond Factor shall be deemed to have been duly given if the
information contained in such notice appears on the relevant page of the Reuters
Screen or such other similar electronic reporting service as may be approved by
the Note Trustee and notified to Class A Noteholders (the "Relevant Screen").
Any such notice shall be deemed to have been given on the first date on which
such information appeared on the Relevant Screen. If it is impossible or
impracticable to give notice in accordance with this paragraph then notice of
the matters referred to in this Condition shall be given in accordance with the
preceding paragraph.
The Principal Paying Agent shall deliver a quarterly servicing report for
each Collection Period to each Class A Noteholder on the Notice date relating to
such Collection Period in the method provided in the first paragraph of this
Condition 12.
13. Meetings of Voting Mortgagees and Votes of Class A Noteholders;
Modifications; Consents; Waiver
The Security Trust Deed contains provisions for convening meetings of the
Voting Mortgagees to, inter alia, enable the Voting Mortgagees to direct or
consent to the Security Trustee taking or not taking certain actions under the
Security Trust Deed, for example to enable the Voting Mortgagees to direct the
Security Trustee to enforce the Security Trust Deed.
For so long as the amounts outstanding under the Notes are 75% or more of
all amounts secured by the Security Trust Deed, the Note Trustee may direct the
Security Trustee to do any act or thing which the Security Trustee is required
to do, or may only do, at the direction of an Extraordinary Resolution of the
Voting Mortgagees.
Neither the Security Trustee nor the Trust Manager may call a meeting of
Voting Mortgagees without the Note Trustee's consent, if the amounts outstanding
under the Notes are 75% or more of all amounts secured by the Security Trust
Deed.
The Note Trust Deed contains provisions for the Class A Noteholders to
consider any matter affecting their interests. In general, the holders of a
majority of the aggregate Invested Amount of the Class A Notes may take or
consent to any action permitted to be taken by Class A Noteholders under the
Note Trust Deed. Notwithstanding the foregoing, the consent of holders of 75% of
the aggregate Invested Amount of the Class A Notes shall be required to (i)
direct the Note Trustee to direct the Security Trustee to enforce the security
under the Note Trust Deed, (ii) override any waiver by the Note Trustee of a
breach of any provisions of the Transaction Documents or an Event of Default,
(iii)
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alter, add, or modify the terms and conditions of the Class A Notes or the
provisions of any of the Transaction Documents if such alteration, addition or
modification is, in the opinion of the Note Trustee, materially prejudicial or
likely to be materially prejudicial to the Offered Noteholders as a whole or the
Class A Noteholders, which shall include any modification to the date of
maturity of the Class A Notes or a modification which would have the effect of
postponing any day for payment of interest in respect of any Class A Notes,
reducing or cancelling the amount of principal payable in respect of any Class A
Notes or the rate of interest applicable to any Class A Notes or altering the
percentage of the aggregate Invested Amount required to consent to any action or
altering the currency of payment of any Class A Notes or an alteration of the
date or priority of redemption of the Class A Notes (any such modification being
referred to below as a "Basic Terms Modification"). The Note Trust Deed contains
provisions limiting the powers of the Class B Noteholders, inter alia, to
request or direct the Note Trustee to take any action that would be materially
prejudicial to the interests of the Class A Noteholders. Except in certain
circumstances, the Note Trust Deed imposes no such limitations on the powers of
the Class A Noteholders, the exercise of which will be binding on the Class B
Noteholders, irrespective of the effect on the Class B Noteholders' interests.
Any action taken by the requisite percentage of the Invested Amount of the Class
A Noteholders shall be binding on all Class A Noteholders (both present and
future).
Pursuant to the terms of the Note Trust Deed, the Note Trustee may agree,
without the consent of the Class A Noteholders, among other things, (i) to any
modification (except a Basic Terms Modification) of, or to the waiver or
authorisation of any breach or proposed breach of the Class A Notes (including
these Conditions), or any of the Transaction Documents which is not, in the
opinion of the Note Trustee materially prejudicial to the interests of the Class
A Noteholders or (ii) to any modification of the Class A Notes (including these
Conditions, or any of the Transaction Documents which, in the Note Trustee's
opinion, is to correct a manifest error or is of a formal, minor or technical
nature. The Note Trustee may also, without the consent of the Class A
Noteholders, determine that any Event of Default or any condition, event or act
which with the giving of notice and/or lapse of time and/or the issue of a
certificate would constitute an Event of Default shall not, or shall not subject
to specified conditions, be treated as such. Any such modification, waiver,
authorisation or determination shall be binding on the Class B Noteholders and,
unless the Note Trustee agrees otherwise, any such modification shall be
notified to the Class A Noteholders in accordance with Class A Condition 12 as
soon as practicable thereafter.
14. Indemnification and Exoneration of the Note Trustee and the Security
Trustee
The Note Trust Deed contains provisions for the indemnification of the Note
Trustee and for its relief from responsibility, including provisions relieving
it from taking proceedings to realise the security and to obtain repayment of
the Class A Notes unless indemnified to its satisfaction. Each of the Note
Trustee and the Security Trustee is entitled to enter into business transactions
with the Issuer Trustee and/or any other party to the Relevant Documents without
accounting for any profit resulting from such transactions. Neither the Security
Trustee nor the Note Trustee will be responsible for any loss, expense or
liability which may be suffered as a result of any assets secured by the
Security Trust Deed, Mortgaged Property or any deeds or documents of title
thereto, being uninsured or inadequately insured or being held by or to the
order of the Servicer or any of its affiliates or by clearing organisations or
their operators or by any person on behalf of the Note Trustee.
15. Limitation of liability of the Issuer Trustee
(a) General
Clause 33 of the Master Trust Deed applies to the obligations and
liabilities of the Issuer Trustee in relation to this Class A Note.
(b) Liability of Trustee limited to its right of indemnity
(i) This Class A Note applies to the Issuer Trustee only in its capacity as
trustee of the Trust and in no other capacity. A liability arising under or in
connection with this Class A Note or the Trust can be enforced against the
Issuer Trustee only to the extent to which it can be satisfied out of property
of the Trust out of which the Issuer Trustee is actually indemnified for the
liability. This limitation of the Issuer Trustee's liability applies despite any
other provision
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of this Class A Note or any other Transaction Document and extends to all
liabilities and obligations of the Issuer Trustee in any way connected with any
representation, warranty, conduct, omission, agreement or transaction related to
this Class A Note or the Trust.
(ii) None of the Note Trustee or the Class A Noteholders may take action
against the Issuer Trustee in any capacity other than as trustee of the Trust or
seek the appointment of a receiver (except under the Security Trust Deed), or a
liquidator, an administrator or any similar person to the Issuer Trustee or
prove in any liquidation, administration or arrangements of or affecting the
Issuer Trustee.
(iii) The provisions of this Condition 15 shall not apply to any obligation
or liability of the Issuer Trustee to the extent that it is not satisfied
because under a Transaction Document or by operation of law there is a reduction
in the extent of the Issuer Trustee's indemnification out of the Trust Assets as
a result of the Issuer Trustee's fraud, negligence or breach of trust.
(iv) It is acknowledged that the Trust Manager, the Servicer, each Paying
Agent, the Agent Bank and the Note Trustee (each a "Relevant Party") are
responsible under the Transaction Documents for performing a variety of
obligations relating to the Trust. No act or omission of the Issuer Trustee
(including any related failure to satisfy its obligations under this Class A
Note or a Transaction Document) will be considered fraud, negligence or breach
of trust of the Issuer Trustee for the purpose of sub-paragraph (iii) of this
Condition 15 to the extent to which the act or omission was caused or
contributed to by any failure by any Relevant Party or any other person who
provides services in respect of the Trust (other than a person who has been
delegated or appointed by the Issuer Trustee and for whom the Issuer Trustee is
responsible under the Transaction Documents, other than a Relevant Party) to
fulfil its obligations relating to the Trust or by any other act or omission of
a Relevant Party or any other person who provides services in respect of the
Trust (other than a person who has been delegated or appointed by the Issuer
Trustee and for whom the Issuer Trustee is responsible under the Transaction
Documents, other than a Relevant Party).
(v) No attorney, agent, receiver or receiver and manager appointed in
accordance with a Transaction Document (including without limitation a Relevant
Party) has authority to act on behalf of the Issuer Trustee in a way which
exposes the Issuer Trustee to any personal liability and no act or omission of
any such person will be considered fraud, negligence or breach of trust of the
Issuer Trustee for the purpose of sub-paragraph (iii), if the Issuer Trustee has
exercised reasonable care in the selection and supervision of such a person.
16. Governing Law
The Class A Notes and the Relevant Documents (other than the Security Trust
Deed which is governed by the laws of the Australian Capital territory and the
Currency Swap with Morgan Guaranty Trust Company of New York, London Office,
which is governed by the laws of England) are governed by, and shall be
construed in accordance with, the laws of New South Wales, Australia.
Summary of Provisions Relating to the Class A Notes While in Book Entry Form
The Class A Notes will initially be represented by typewritten book-entry
notes (the Book-Entry Class A Notes"), without coupons, in the principal amount
of US$__________. The Book-Entry Class A Notes will be deposited with the Common
Depositary for DTC on or about the Closing Date. Upon deposit of the Book-Entry
Class A Notes with the Common Depositary, DTC will credit each investor in the
Class A Notes with a principal amount of Class A Notes for which it has
subscribed and paid.
The Book-Entry Class A Note will be exchangeable for definitive Class A
Notes in certain circumstances described below.
Each person who is shown in the Note Register as the holder of a particular
principal amount of Class A Notes will be entitled to be treated by the Issuer
Trustee and the Note Trustee as a holder of such principal amount of Class A
Notes and the expression "Class A Noteholder" shall be construed accordingly,
but without prejudice to the entitlement
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of the holder of the Book-Entry Class A Note to be paid principal and interest
thereon in accordance with its terms. Such persons shall have no claim directly
against the Issuer Trustee in respect of payment due on the Class A Notes for so
long as the Class A Notes are represented by a Book-Entry Class A Note and the
relevant obligations of the Issuer Trustee will be discharged by payment to the
registered holder of the Book-Entry Class A Note in respect of each amount so
paid.
(a) Payments
Interest and principal on each Book-Entry Class A Note will be payable by
the Principal Paying Agent to the Common Depositary provided that no payment of
interest may be made by the Issuer Trustee or any Paying Agent in the
Commonwealth of Australia or its possessions or into a bank account or to an
address in the Commonwealth of Australia or its possessions.
Each of the persons appearing from time to time as the beneficial owner of
a Class A Note will be entitled to receive any payment so made in respect of
that Class A Note in accordance with the respective rules and procedures of DTC.
Such persons will have no claim directly against the Issuer Trustee in respect
of payments due on the Class A Notes which must be made by the holder of the
relevant Book-Entry Class A Note, for so long as such Book-Entry Class A Note is
outstanding.
A record of each payment made on a Book-Entry Class B Note, distinguishing
between any payment of principal and any payment of interest, will be recorded
in the Note Register by the Principal Paying Agent and such record shall be
prima facie evidence that the payment in question has been made.
(b) Exchange
The Book-Entry Class A Note will be exchangeable for definitive Class A
Notes only if:
(a) the Trust Manager advises the Principal Paying Agent in writing that the
Clearing Agency is no longer willing or able properly to discharge its
responsibilities with respect to the Class A Notes or the Clearing Agency ceases
to carry on business, and the Trust Manager is unable to located a qualified
successor;
(b) the Issuer Trustee, at the direction of the Trust Manager (at the Trust
Manager's option) advises the Principal Paying Agent in writing that the book
entry system through the Clearing Agency is or is to be terminated; or
(c) after the occurrence of an Event, of Default the Class A Note Owner's
representing beneficial interests aggregating to at least a majority of the
aggregate Invested Amount of the Class A Notes advise the Principal Paying Agent
and Issuer Trustee through the Clearing Agency in writing that the continuation
of a book entry system through the Clearing Agency is no longer in the best
interest of the Note Owners,
then the Principal Paying Agent shall notify all Class A Note Owners and the
Issuer Trustee of the occurrence of any such event and of the availability of
Definitive Notes to Class A Note Owners requesting the same. Upon the surrender
of the Book-Entry Notes to the Issuer Trustee by the Clearing Agency, and the
delivery by the Clearing Agency of the relevant registration instructions to the
Issuer Trustee, the Issuer Trustee shall execute and procure the Principal
Paying Agent to authenticate the Definitive Notes in accordance with the
instructions of the Clearing Agency.
(c) Notices
So long as the Notes are represented by the Book-Entry Class A Note and the
same is/are held on behalf of the Clearing Agency, notices to Class A
Noteholders may be given by delivery of the relevant notice to the Clearing
Agency for communication by them to entitled account holders in substitution for
delivery to each Class A Noteholder as required by the Class A Conditions.
(d) Cancellation
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Cancellation of any Class A Note required by the Class A Conditions will be
effected by reduction in the principal amount of the relevant Book-Entry Class A
Note.
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APPENDIX III--TERMS AND CONDITIONS OF THE CLASS B NOTES
TERMS AND CONDITIONS OF THE CLASS B NOTES
The following, subject to amendments, are the terms and conditions of
the Class B Notes, substantially as they will appear on the reverse of the Class
B Notes. Class B Notes in definitive form will only be issued in certain
circumstances. While the Class B Notes remain in book-entry form, the same terms
and conditions govern them, except to the extent that they are appropriate only
to the Class B Notes in definitive form. For a summary of the provisions
relating to the Class B Notes in book-entry form, see the summary at the end of
this section.
The issue of US$__________ Class B Mortgage Backed Floating Rate Notes
due ____ (the "Class B Notes") of Westpac Securities Administration Limited in
its capacity as trustee of the Series 1998-2G WST Trust (the "Trust"), in such
capacity (the "Issuer Trustee") was authorised by resolution of the Board of
Directors of the Issuer Trustee passed on__________. These Notes, together with
US$__________ Class A Mortgage Backed Floating Rate Notes due ____ (the "Class A
Notes" and, together with the Class B Notes, the "Notes") of the Issuer Trustee
are (a) issued subject to a Master Trust Deed (the "Master Trust Deed") dated
14th February 1997 between the Issuer Trustee and The Mortgage Company Pty
Limited, acceded to by Westpac Securitisation Management Pty Limited (the "Trust
Manager"), by a Series Notice (the "Series Notice") dated __________ between
(among others) the Issuer Trustee, __________________________ (the note trustee
for the time being referred to as the "Note Trustee") as trustee for the holders
for the time being of the Class B Notes (the "Class B Noteholders") and the
holders for the time being of the Class A Notes (the "Class A Noteholders" and
together with the Class B Noteholders, the "Noteholders") and the Trust Manager,
and by these terms and conditions (the "Class B Conditions"); (b) issued subject
to a note trust deed dated __________ (the "Note Trust Deed") between the Issuer
Trustee, the Trust Manager and the Note Trustee; and (c) secured by a Security
Trust Deed (the "Security Trust Deed") dated __________ between the Issuer
Trustee, the Trust Manager, the Note Trustee and Perpetual Trustee Company
Limited (ACN 000 001 007) (the security trustee for the time being referred to
as "Security Trustee").
The statements set out below include summaries of, and are subject to
the detailed provisions of the Master Trust Deed, the Series Notice, the
Security Trust Deed and the Note Trust Deed. Certain words and expressions used
herein have the meanings defined in those documents. In accordance with an
agency agreement (the "Agency Agreement") dated __________ between the Issuer
Trustee, the Trust Manager, the Note Trustee and __________________________ as
principal paying agent (the "Principal Paying Agent", which expression includes
its successors as principal paying agent under the Agency Agreement) and as
agent bank (the "Agent Bank", which expression includes its successors as Agent
Bank under the Agency Agreement), and under which further paying agents may be
appointed (together with the Principal Paying Agent, the "Paying Agents", which
expression includes the successors of each paying agent as such under the Agency
Agreement and any additional paying agents appointed), payments in respect of
the Class B Notes will be made by the Paying Agents and the Agent Bank will make
the determinations specified in the Agency Agreement. The Class B Noteholders
will be entitled (directly or indirectly) to the benefit of, will be bound by,
and will be deemed to have notice of, all the provisions of the Master Trust
Deed, the Series Notice, the Security Trust Deed, the Note Trust Deed and the
Servicing Agreement as amended (the "Servicing Agreement Amendment Agreement")
dated __________ and made between the Issuer Trustee, Westpac Banking
Corporation ("Westpac") and The Mortgage Company Pty Limited as Servicer
(together with any substitute or successor, the "Servicer") (together with the
Currency Swap Agreements (as defined below), those documents the "Relevant
Documents" and, together with certain other transaction documents defined as
such in the Series Notice, the "Transaction Documents"). Copies of the
Transaction Documents are available for inspection at the principal office of
the Principal Paying Agent, being at the date hereof
______________________________.
In connection with the issue of the Class B Notes, the Issuer Trustee
has entered into an ISDA master interest rate and currency exchange agreement
dated __________ with Westpac Banking Corporation in such capacity (the
"Interest Rate Swap Provider") together with three confirmations relating
thereto dated __________ (the "Variable Rate Basis Swap" and the "Fixed Rate
Basis Swap", respectively and, together, the "Interest Rate Swaps"). The Issuer
Trustee has also entered into ISDA master interest rate and currency exchange
agreements dated __________ with each of
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Morgan Guaranty Trust Company of New York, London Branch and Westpac Banking
Corporation (each, in such capacity a "Currency Swap Provider", and together
with the Interest Rate Swap Provider, the "Swap Providers") together with two
confirmations relating to each such agreement dated __________ in respect of two
distinct swap transactions relating to each of the Class B Notes and the Class A
Notes, respectively (each, a "Currency Swap", and together the "Currency
Swaps").
1. Form, Denomination and Title
The Class B Notes will be issued in registered form, without interest
coupons, in minimum denominations of US$100,000 and integral multiples thereof.
The Class B Notes will be represented by one or more typewritten fully
registered book-entry notes (each, a "Book-Entry Note" and collectively, the
"Book-Entry Notes") registered in the name of Cede & Co. ("Cede") as nominee of
The Depository Trust Company ("DTC"). Beneficial interests in the Book-Entry
Notes will be shown on, and transfers thereof will be effected only through,
records maintained by DTC and its participants. Morgan Guaranty Trust Company of
New York, Brussels office, as operator of the Euroclear System ("Euroclear") and
Cedel Bank, societe anonyme ("Cedel Bank"), may hold interests in the Book-Entry
Notes on behalf of persons who have accounts with Euroclear and Cedel Bank
through accounts maintained in the names of Euroclear or Cedel Bank, or in the
names of their respective depositories, with DTC.
If the Issuer Trustee is obliged to issue Definitive Notes under clause
3.3 of the Note Trust Deed, interests in the applicable Book-Entry Note will be
transferred to the beneficial owners thereof in the form of Definitive Notes,
without interest coupons, in the denominations set forth above. A Definitive
Note will be issued to each Noteholder in respect of its registered holding or
holdings of Class B Notes against delivery by such Noteholders of a written
order containing instructions and such other information as the Issuer Trustee
and Morgan Guaranty Trust Company of New York, London Branch, acting as note
registrar (the "Note Registrar") may require to complete, execute and deliver
such Definitive Notes. In such circumstances, the Issuer Trustee will cause
sufficient Definitive Notes to be executed and delivered to the Note Registrar
for completion, authentication and dispatch to the relevant Noteholders.
2. Status, Security and Relationship between the Class B Notes, the Class
A Notes, the RFSs and the RFS Class A Notes
The Class B Notes are secured by a first ranking floating charge over
all of the assets of the Trust (which include, among other things, the Loans (as
defined below) and the Mortgages (as defined below) and related securities) (as
more particularly described in the Security Trust Deed) and rank pari passu and
rateably without any preference or priority among themselves.
The Class B Notes are constituted by the Master Trust Deed and the
Series Notice and are secured by the same security as secures the Class A Notes
but the Class A Notes will rank in priority to the Class B Notes in the event of
the security being enforced and in respect of principal and interest (as set out
in Class B Condition 4 and 5).
The proceeds of the issue of the Class B Notes and the Class A Notes
are to be used by the Issuer Trustee to purchase an equitable interest in
certain housing loans (the "Loans") and certain related mortgages (the
"Mortgages") from Westpac or Westpac Securities Administration Limited in its
capacity as trustee of certain other trusts (each a "WST Seller").
In the event that the security for the Class B Notes is enforced and
the proceeds of such enforcement are insufficient, after payment of all other
claims ranking in priority to or pari passu with the Class B Notes under the
Security Trust Deed, to pay in full all principal and interest and other amounts
whatsoever due in respect of the Class B Notes, then the Class B Noteholders
shall have no further claim against the Issuer Trustee in respect of any such
unpaid amounts.
The net proceeds of realisation of the assets of the Trust may be
insufficient to pay all amounts due to the Noteholders. Save in certain limited
circumstances the other assets of the Issuer Trustee will not be available for
payment of any shortfall arising and all claims in respect of such shortfall
shall be extinguished (see further Class B Condition
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15). None of the Servicer, the Trust Manager, the Seller Trustee, Westpac, the
Note Trustee or the Security Trustee has any obligation to any Noteholder for
payment of any amount by the Issuer Trustee in respect of the Notes.
The Issuer Trustee may from time to time issue debt securities ("RFSs")
constituted under the Master Trust Deed and the Series Notice to fund amounts
redrawn by relevant borrowers under the Loans (up to the scheduled amortised
principal of the Loans) from time to time ("Redraws"). RFSs and Class A Notes
will, on issue, rank ahead of the Class B Notes as to both principal and
interest except in the limited circumstances set out in these Conditions.
If, by the fifth Collection Determination Date (as defined in Class A
Condition 5) following the issue of an RFS, the RFS has not been redeemed, it
shall convert to an RFS Class A Note (each, an "RFS Class A Note" and, together
the "RFS Class A Notes"). RFS Class A Notes will rank ahead of Class B Notes as
to both principal and interest except in the limited circumstances set out in
these Conditions. RFSs and RFS Class A Notes are registered, Australian-traded
instruments denominated in Australian dollars ("A$") and sold to Australian
investors only and for the avoidance of doubt are not fungible with the Class B
Notes.
The Note Trust Deed contains provisions requiring the Note Trustee to
have regard to the interests of the Class A Noteholders and the Class B
Noteholders as regards all the powers, trusts, authorities, duties and
discretions of the Note Trustee (except where expressly provided otherwise), but
requiring the Note Trustee in any such case to have regard only to the interests
of the Class A Noteholders if, in the Note Trustee's opinion, there is a
conflict between the interests of the Class A Noteholders and the interests of
the Class B Noteholders.
The Security Trust Deed contains provisions requiring the Security
Trustee to give priority to the interests of the Class A Noteholders and the
holders of RFSs (if any) and RFS Class A Notes (if any), if there is a conflict
between the interests of such noteholders and any other Voting Mortgagee (as
defined below), including the Class B Noteholders.
3. Covenants of the Issuer Trustee
So long as any of the Class A Notes or the Class B Notes remains
outstanding, the Issuer Trustee has made certain covenants for the benefit of
Class A Noteholders and the Class B Noteholders which are set out in the Master
Trust Deed.
These covenants are as follows:
(a) The Issuer Trustee shall act continuously as trustee of the Trust
until the Trust is terminated as provided by the Master Trust Deed or the Issuer
Trustee has retired or been removed from office in the manner provided under the
Master Trust Deed.
(b) The Issuer Trustee shall:
(i) act honestly and in good faith in the performance of its
duties and in the exercise of its discretions under the Master Trust
Deed;
(ii) subject to the Master Trust Deed, exercise such diligence
and prudence as a prudent person of business would exercise in
performing its express functions and in exercising its discretions
under the Master Trust Deed, having regard to the interests of the
Class A Noteholders and the Class B Noteholders and other creditors and
beneficiaries of the Trust;
(iii) use its best endeavours to carry on and conduct its
business in so far as it relates to the Master Trust Deed in a proper
and efficient manner;
(iv) keep, or ensure that the Trust Manager keeps, accounting
records which correctly record and explain all amounts paid and
received by the Issuer Trustee;
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(v) keep the Trust separate from each other trust which is
constituted under the Master Trust Deed and account for assets and
liabilities of the Trust separately from those of other trusts
constituted under the Master Trust Deed; and
(vi) do everything and take all such actions which are
necessary (including obtaining all appropriate authorisations) to
ensure that it is able to exercise all its powers and remedies and
perform all its obligations under the Master Trust Deed, the
Transaction Documents and all other deeds, agreements and other
arrangements entered into by the Issuer Trustee under the Master Trust
Deed.
(c) Except as provided in the Master Trust Deed, the Issuer Trustee
shall not, nor shall it permit any of its officers to, sell, mortgage, charge or
otherwise encumber or part with possession of any asset of the Trust (the "Trust
Assets").
(d) The Issuer Trustee's officers, employees, agents, attorneys,
delegates and sub-delegates shall duly observe and perform the covenants and
obligations of the Master Trust Deed in the same manner as is required of the
Issuer Trustee, and the Issuer Trustee agrees to indemnify the Trust Manager for
its own benefit or for the benefit of the Trust against any loss or damage that
the Trust, the Trust Manager, the Servicer, the Class A Noteholders, the Class B
Noteholders, the Beneficiaries (as defined in the Master Trust Deed) the holders
of RFSs (if any) and the holders of RFS Class A Notes (if any) or other
creditors incur or sustain in connection with, or arising out of, any breach or
default by such officers, employees, agents, delegates and persons in the
observance or performance of any such covenant or obligation, to the extent that
the Issuer Trustee would have been liable if that breach or default had been the
Issuer Trustee's own act or omission.
(e) The Issuer Trustee will open and operate certain bank accounts in
accordance with the Master Trust Deed and the Series Notice.
(f) Subject to the Master Trust Deed and any Transaction Document to
which it is a party, the Issuer Trustee shall act on all directions given to it
by the Trust Manager in accordance with the terms of the Master Trust Deed.
(g) The Issuer Trustee shall properly perform the functions which are
necessary for it to perform under all Transaction Documents in respect of the
Trust.
4. Interest
(a) Payment Dates
Each Class B Note bears interest on its Invested Amount (as defined
below) from and including __________ or such later date as may be agreed between
the Issuer Trustee and the Managers for the issue of the Class B Notes (the
"Closing Date"). Interest in respect of the Class B Notes will be payable
quarterly in arrear on the 19th day falling in ___________ in respect of the
period from (and including) the Closing Date to (but excluding) that date, and
thereafter on each 19 February, 19 May, 19 August and 19 November (each such
date a "Payment Date" and each such three month period beginning on each of 1
February, 1 May, 1 August and 1 November a "Quarter"). If any Payment Date would
otherwise fall on a day which is not a Business Day (as defined below), it shall
be postponed to the next day which is a Business Day (as defined below) unless
it would thereby fall into the next calendar month in which event it shall be
brought forward to the immediately preceding Business Day.
"Business Day" in this Class B Condition 4 and in Class B Conditions 5
and 9 below means any day (London time) other than a Saturday, Sunday or public
holiday on which banks are open for business in London and New York City.
The period beginning on (and including) the Closing Date and ending on
(but excluding) the first Payment Date and each successive period beginning on
(and including) a Payment Date and ending on (but excluding) the next
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Payment Date is called an "Interest Period". Interest payable on a Class B Note
in respect of any Interest Period or any other period will be calculated on the
basis of the actual number of days elapsed and a 360 day year.
Interest shall cease to accrue on any Class B Note from (and
including):
(i) the date on which the Stated Amount (as defined in Class B
Condition 5(a)) of that Class B Note is reduced to zero; or
(ii) if the Stated Amount on the due date for redemption is not zero,
the due date for redemption of the Class B Note, unless, upon due presentation,
payment of principal due is improperly withheld or refused, following which
interest shall continue to accrue on the Invested Amount of the Class B Note at
the rate from time to time applicable to the Class B Notes until the moneys in
respect of that Class B Note have been received by the Note Trustee or the
Principal Paying Agent and notice to that effect is given in accordance with
Class B Condition 12, or the Stated Amount of that Class B Note has been reduced
to zero.
(b) Interest Rate
The rate of interest applicable from time to time to the Class B Notes
(the "Interest Rate") will be determined by the Agent Bank on the basis of the
following paragraphs.
On the second London banking day before the beginning of each Interest
Period (each an "Interest Determination Date"), the Agent Bank will determine
the rate "USD-LIBOR-BBA" as an applicable Floating Rate Option under the
Definitions of the International Swaps and Derivatives Association, Inc.
("ISDA") (the "ISDA Definitions") being the rate applicable to any Interest
Period for three-month deposits in US Dollars which appears on the Telerate Page
3750 as of 11am London time, on the Interest Determination Date. If such rate
does not appear on the Telerate Page 3750, the rate for the Interest Period will
be determined as if the Issuer Trustee and Agent Bank had specified
"USD-LIBOR-Reference Banks" as the applicable Floating Rate Option under the
ISDA Definitions. "USD-LIBOR-Reference Banks" means that the rate for an
Interest Period will be determined on the basis of the rates at which deposits
in US Dollars are offered by the Reference Banks (being four major banks in the
London interbank market) at approximately 11.00 am, London time, on the Interest
Determination Date to prime banks in the London interbank market for a period of
three months commencing on the first day of the Interest Period and in a
Representative Amount (as defined in the ISDA Definitions). The Agent Bank will
request the principal London office of each of the Reference Banks to provide a
quotation of its rate. If at least two such quotations are provided, the rate
for that Interest Period will be the arithmetic mean of the quotations. If fewer
than two quotations are provided as requested, the rate for that Interest Period
will be the arithmetic mean of the rates quoted by major banks in New York City,
selected by the Agent Bank, at approximately 11.00 am, New York City time, on
that Interest Determination Date for loans in US Dollars to leading European
banks for a period of three months commencing on the first day of the Interest
Period and in a Representative Amount, provided that on the first day of the
first Interest Period USD-LIBOR-BBA shall be an interpolated rate calculated
with reference to the period from (and including) the Closing Date to (but
excluding) the first Interest Payment Date.
The Interest Rate applicable to the Class B Notes for such Interest
Period shall be the aggregate of (i) such Interest Rate or arithmetic mean as
determined by the Agent Bank and (ii) the margin of _____% applicable to the
Class B Notes.
There is no maximum or minimum Interest Rate.
(c) Determination of Interest Rate and Calculation of Interest
The Agent Bank will, as soon as practicable after 11.00 am (London
time) on each Interest Determination Date, determine the Interest Rate
applicable to, and calculate the amount of interest payable (the "Interest") for
the immediately succeeding Interest Period. The Interest is calculated by
applying the Interest Rate for the Class B Notes to the Invested Amount (as
defined in Class B Condition 5(a)) of the Class B Note on the first day of the
next Interest Period,
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multiplying such product by the actual number of days in the relevant Interest
Period and dividing by 360 and rounding the resultant figure down to the nearest
cent (half a cent being rounded upwards). The determination of the Interest Rate
and the Interest by the Agent Bank shall (in the absence of manifest error) be
final and binding upon all parties.
(d) Notification and Publication of Interest Rate and Interest
The Agent Bank will cause the Interest Rate and the Interest applicable
to each Class B Note for each Interest Period and the relevant Payment Date to
be notified to the Issuer Trustee, the Trust Manager, the Note Trustee, the
Paying Agents, and, for so long as the Class B Notes are listed on the Official
List of the London Stock Exchange Limited (the "London Stock Exchange"), the
London Stock Exchange, and will cause the same to be published in accordance
with Class B Condition 12 on or as soon as possible after the date of
commencement of the relevant Interest Period. The Interest and the relevant
Payment Date so published may subsequently be amended (or appropriate
alternative arrangements made by way of adjustment) without notice in the event
of a shortening of the Interest Period.
(e) Determination or Calculation by the Note Trustee
If the Agent Bank at any time for any reason does not determine the
Interest Rate or calculate the Interest for a Class B Note, the Note Trustee
shall do so and each such determination or calculation shall be deemed to have
been made by the Agent Bank. In doing so, the Note Trustee shall apply the
foregoing provisions of this Condition, with any necessary consequential
amendments, to the extent that, in its opinion, it can do so, and, in all other
respects it shall do so in such a manner as it shall deem fair and reasonable in
all the circumstances.
(f) Agent Bank
The Issuer Trustee will procure that, so long as any of the Class B
Notes remains outstanding, there will at all times be an Agent Bank. The Issuer
Trustee reserves the right at any time to terminate the appointment of the Agent
Bank. Notice of that termination will be given to the Class B Noteholders. If
any person is unable or unwilling to continue to act as the Agent Bank, or if
the appointment of the Agent Bank is terminated, the Issuer Trustee will, with
the approval of the Note Trustee, appoint a successor Agent Bank to act as such
in its place, provided that neither the resignation nor removal of the Agent
Bank shall take effect until a successor approved by the Note Trustee has been
appointed.
5. Redemption and Purchase
(a) Mandatory Redemption in Part from Principal Collections and
Apportionment of Principal Collections between the Class A Notes, the
Class B Notes, the RFS Class A Notes and the RFSs
The Class B Notes shall be subject to mandatory redemption in part on
any Payment Date if on that date there are any Principal Collections (as defined
below) available to be distributed in relation to such Class B Notes. The
principal amount so redeemable in respect of each Class B Note prior to
enforcement of the Security Trust Deed (each a "Principal Payment") on any
Payment Date shall be the amount available for payment as set out in Class B
Condition 5(b) on the day which is four Business Days prior to the Payment Date
(the "Collection Determination Date") preceding that Payment Date multiplied by
the Invested Amount of the applicable Class B Note over the total Invested
Amount of all Class B Notes then outstanding (rounded down to the nearest cent
with half a cent being rounded upwards); provided always that no Principal
Payment on a Class B Note on any date may exceed the amount equal to the
Invested Amount of that Class B Note at that date less amounts charged off as at
that date, or to be charged off on the following Payment Date, as described in
Class B Condition 5(c) (that reduced amount being the "Stated Amount" of that
Class B Note).
The "Invested Amount" of a Class B Note is equal to the Initial
Invested Amount (as defined herein) of such Class B Note less all payments
previously made in respect of principal in respect of such Class B Note. The
"Initial Invested Amount" of a Class B Note is its principal balance at the date
of its issuance.
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"Principal Collections" means, in respect of a Collection Period (as
defined below) and as applicable on any Collection Determination Date, the
aggregate of:
(i) all amounts received by or on behalf of the Issuer Trustee from or
on behalf of borrowers under the Loans during the Collection Period in respect
of principal, in accordance with the terms of the Loans, including principal
prepayments;
(ii) all other amounts received by or on behalf of the Issuer Trustee
under or in respect of principal under the Loans and the Mortgages during that
Collection Period including:
(A) any amounts recovered in respect of enforcement of Loans and
Mortgages (other than under lender's mortgage insurance), on account of
principal;
(B) any payments by Westpac to the Issuer Trustee on the repurchase of
a Loan under the Master Trust Deed during that Collection Period which are
attributable to principal;
(C) any payments by Westpac Securities Administration Limited (in its
capacity as trustee of any other trust established under the Master Trust Deed)
(the "WST Purchaser") on the purchase by the WST Purchaser of any assets of the
Trust which are attributable to principal;
(D) any Prepayment Costs (as defined in the Series Notice) applied
towards Prepayment Benefits (as defined in the Series Notice) under the Series
Notice; and
(E) any Prepayment Benefit Shortfall (as defined in the Series Notice)
paid by Westpac to the Trust under the Series Notice;
(iii) all amounts received by or on behalf of the Issuer Trustee during
that Collection Period from any provider of a Support Facility (as defined in
the Series Notice) (other than the Currency Swap) under that Support Facility
and which the Trust Manager determines should be accounted for to reduce any
principal loss on a Loan, being the total amount outstanding under a Loan after
applying all proceeds from the enforcement of the Loan and related Mortgages (a
"Liquidation Loss") to the extent that Liquidation Loss is attributable to
principal;
(iv) all amounts received by or on behalf of the Issuer Trustee during
that Collection Period:
(A) from Westpac or the WST Seller Trustee (each an "Approved Seller")
in respect of any breach of a representation, warranty or undertaking contained
in the Master Trust Deed or the Series Notice;
(B) from an Approved Seller under any obligation under the Master Trust
Deed or the Series Notice to indemnify or reimburse the Issuer Trustee for any
amount;
(C) from the Servicer, in respect of any breach of any representation,
warranty or undertaking contained in the Servicing Agreement; and
(D) from the Servicer under any obligation under the Servicing
Agreement to indemnify or reimburse the Issuer Trustee for any amount,
in each case, which are determined by the Trust Manager to be in
respect of principal payable under the Loans and the Mortgages;
(v) any amounts in the nature of principal received by or on behalf of
the Issuer Trustee during that Collection Period pursuant to the sale of any
asset comprised in the Trust (including any amount received by the Issuer
Trustee on the issue of Notes and which was not used to purchase Loans or
Mortgages, and which the Trust Manager determines is surplus to the requirements
of the Trust);
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(vi) (for the purposes of clause 6.11 of the Series Notice only) any
amount of Excess Available Income (as defined in the Series Notice) to be
applied to pay a Principal Charge Off or a Carryover Charge Off (as defined in
the Series Notice);
(vii) any amount received by or on behalf of the Issuer Trustee during
that Collection Period as proceeds from the issue of any RFS to the extent not
applied to reimburse amounts drawn under the Redraw Facility dated __________
between the Issuer Trustee, the Trust Manager and Westpac (the "Redraw
Facility");
(viii) any Excess Available Income to be applied to Principal Draws (as
defined in the Series Notice) made on a previous Payment Date;
(ix) any Prepayment Calculation Adjustment (as defined in the Series
Notice) for that Collection Period;
(x) any Substitution Net Transfer Amount (Principal) (as defined in the
Series Notice) received by the Trust from a WST Purchaser with respect to that
Collection Period;
(xi) any amounts remaining on deposit in the Collection Account on the
previous Payment Date (after all distributions from the Collection Account for
such Payment Date have been made);
less any amounts deducted by or paid to Westpac to reimburse Redraws funded by
Westpac for which Westpac has not previously been reimbursed. A premium
receivable by the Issuer Trustee on the entry into a replacement Currency Swap
under clause 6.26 of the Series Notice is not treated as a Principal Collection.
"Collection Period" means, in relation to a Payment Date, the period
from (and including) the tenth day of the Quarter preceding the Quarter in which
the Payment Date occurs to (and including) the ninth day of the Quarter in which
the Payment Date occurs. The first Collection Period is the period from (but
excluding) __________ (the "Cut-Off Date") to (and including) __________. The
last Collection Period is the period from (but excluding) the last day of the
previous Collection Period to (and including) the termination date of the Trust.
(b) Initial Principal Distributions Principal Collections will be
distributed as follows on each Payment Date before any payments in
respect of the Notes:
(i) first, to repay any Redraws provided by Westpac in relation to
Loans to the extent that Westpac has not previously been reimbursed in relation
to those Redraws;
(ii) second, to repay all principal outstanding under the Redraw
Facility on that Payment Date;
(iii) third, to allocate to Total Available Funds any Principal Draw
(as defined in the Series Notice); and
(iv) fourth, to repay pari passu and rateably all amounts outstanding
under the RFSs (if any).
(c) Principal Allocation Method
On each Collection Determination Date, the Trust Manager will determine
the A$ Equivalent of the aggregate of the Class B Stated Amounts divided by the
sum of (i) the A$ Equivalent of the Total Stated Amount at that time, plus (ii)
the Redraw Limit at that time, plus (iii) the aggregate of the RFS Stated Amount
at that time, plus (iv) the aggregate of the RFS Class A Stated Amounts at that
time (the "Subordinated Percentage"). The Trust Manager will calculate the
Subordinated Percentage so as to determine the appropriate principal
distribution methodology to apply for that Collection Period, as described
below.
(d) Applicability of Serial Method 1
If, on any Collection Determination Date:
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(i) the Subordinated Percentage at the previous Collection
Determination Date was greater than or equal to twice the Initial Subordinated
Percentage;
(ii) that Collection Determination Date occurs on or before the third
anniversary of the Closing Date;
(iii) the Total Invested Amount as at that Collection Determination
Date as a percentage of the Total Initial Invested Amount, is greater than or
equal to 10%;
(iv) the Average Quarterly Percentage as at that Collection
Determination Date:
(A) does not exceed 2% and the Total Carryover Charge Off on that
Collection Determination Date does not exceed 30% of the Class B Initial
Invested Amount; or
(B) does not exceed 4% and the Total Carryover Charge Off on such
Collection Determination Date does not exceed 10% of the Class B Initial
Invested Amount; and
(v) the Stated Amounts of all Class B Notes as at that Collection
Determination Date exceeds 0.25% of the aggregate of all Initial Invested
Amounts of all Class A Notes and all Class B Notes as at the Collection
Determination Date;
then Principal Collections will be allocated serially in accordance with Serial
Method I set out in paragraph (e) below.
(e) Serial Method 1
On any Collection Determination Date, if the Trust Manager determines
that Serial Method 1 should apply, the Issuer Trustee (based on instructions
from the Trust Manager) will pay out of Principal Collections for the relevant
Collection Period which remain after the Initial Principal Distributions, on the
Payment Date following that Collection Determination Date the following amounts
in the following priority:
(i) first pari passu and rateably between themselves:
(A) as a payment, denominated in A$, to the Currency Swap Providers
under the relevant swap confirmations relating to the Class A Notes of an amount
equal to the lesser of:
(1) the Class A Forex Percentage of the sum of:
(aa) the Class A Percentage of Principal Collections remaining after
all Initial Principal
Distributions; and
(bb) 50% of the Class B Percentage of those Principal Collections; and
(2) the A$ Equivalent of the Class A Stated Amounts for all Class A
Notes; and
(B) as a payment denominated in A$ to the holders of the RFS Class A
Notes (if any) of an amount equal to the lesser of:
(1) the RFS Class A Forex percentage of the sum of:
(aa) the Class A Percentage of Principal Collections remaining after
all Initial Principal Distributions; and
(bb) 50% of the Class B Percentage of those Principal Collections; and
(2) the RFS Class A Stated Amounts for all RFS Class A Notes (if any);
and
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(ii) second, as a payment, denominated in A$, to the Currency Swap
Providers under the relevant swap confirmations relating to the Class B Notes of
an amount equal to 50% of the Class B Percentage of those Principal Collections
remaining after all Initial Principal Distributions.
(f) Applicability of Serial Method 2
If, on any Collection Determination Date:
(i) the Subordinated Percentage at the previous Collection
Determination Date was greater than or equal to twice the Initial Subordinated
Percentage;
(ii) that Collection Determination Date occurs after the third
anniversary of the Closing Date;
(iii) the Total Invested Amount as at that Collection Determination
Date, as a percentage of the Total Initial Invested Amount, is greater than or
equal to 10%;
(iv) the Average Quarterly Percentage as at the Collection
Determination Date:
(A) does not exceed 2% and the Total Carryover Charge Off on that
Collection Determination Date does not exceed 30% of the Class B Initial
Invested Amount; or
(B) does not exceed 4% and the Total Carryover Charge Off on that
Collection Determination Date does not exceed 10% of the Class B Initial
Invested Amount; and
(v) the Stated Amount of the Class B Notes as at that Collection
Determination Date exceeds 0.25% of the aggregate of all Initial Invested
Amounts of all Class A Notes and all Class B Notes and the US$ Equivalent of the
Invested Amounts of all RFS Class A Notes (if any);
then Principal Collections will be allocated serially in accordance with Serial
Method 2 set out in paragraph (g) below.
(g) Serial Method 2
On any Collection Determination Date, if the Trust Manager determines
that Serial Method 2 shall apply, the Issuer Trustee (based on instructions from
the Trust Manager) will pay out of Principal Collections for the relevant
Collection Period which remain after the Initial Principal Distributions on the
Payment Date following that Collection Determination Date in the following
amounts in the following priority:
(i) first, pari passu and rateably between themselves:
(A) as a payment, denominated in A$, to the Currency Swap Providers
under the relevant swap confirmations relating to the Class A Notes of an amount
equal to the lesser of:
(1) the Class A Forex Percentage of the Class A Percentage of Principal
Collections remaining after all Initial Principal Distributions; and
(2) the A$ Equivalent of the Class A Stated Amounts for all Class A
Notes; and
(B) as a payment denominated in A$ to the holders of the RFS Class A
Notes (if any) of an amount equal to the lesser of:
(1) the RFS Class A Forex Percentage of the Class A Percentage of those
Principal Collections remaining after all Initial Principal Distributions; and
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(2) the RFS Class A Stated Amounts for all RFS Class A Notes (if any);
and
(ii) second as a payment, denominated in A$, to the Currency Swap
Providers under the relevant swap confirmations relating to the Class B Notes of
an amount equal to the Class B Percentage of those Principal Collections.
(h) Sequential Method
On any Collection Determination Date, if the Trust Manager determines
that neither Serial Method I nor Serial Method 2 (set out in Conditions 5(d) to
(g) above) applies, the Issuer Trustee (based on instructions from the Trust
Manager) will pay out of Principal Collections for the relevant Collection
Period which remain after the Initial Principal Distributions the following
amounts in the following priority:
(i) first pari passu and rateably between themselves:
(A) as a payment, denominated in A$, to the Currency Swap Providers
under the relevant swap confirmations relating to the Class A Notes of an amount
equal to the lesser of:
(1) the Class A Forex Percentage of the amount available for
distribution under this paragraph (i) after all Initial Principal Distributions;
and
(2) the A$ Equivalent of the Class A Stated Amounts for all Class A
Notes; and
(B) as a payment, denominated in A$, to the holders of the RFS Class A
Notes (if any) of an amount equal to the lesser of:
(1) the RFS Class A Forex Percentage of the amount available for
distribution under this paragraph (i) after all Initial Principal Distributions;
and
(2) the RFS Class A Stated Amounts for all RFS Class A Notes (if any);
and
(ii) second, as a payment, denominated in A$, to the Currency Swap
Providers under the relevant swap confirmations relating to the Class B Notes of
an amount equal to the lesser of:
(A) the amount available for distribution under this paragraph (ii)
after the application of paragraph (i); and
(B) the A$ Equivalent of the Class B Stated Amounts for all Class B
Notes.
(i) General
No amount of principal will be paid to a Noteholder in excess of the
Stated Amount applicable to the Notes held by that Noteholder.
(j) Distribution of Excess Available Income
On each Collection Determination Date Excess Available Income for the
Collection Period relating to that Collection Determination Date will be applied
in the following order of priority:
(i) to reimburse Principal Charge Offs for that Collection Period;
(ii) pari passu and rateably between themselves (based on the Stated
Amount of the RFSs (if any), the Stated Amount of the RFS Class A Notes (if
any), the Principal Outstanding under the Redraw Facility and the A$ Equivalent
of the Stated Amount of the Class A Notes):
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(A) as a payment to the RFSs (if any) in or towards reinstating the
Stated Amount of the RFSs, to the extent of any Carryover RFS Charge Offs;
(B) as a payment to the RFS Class A Notes (if any) in or towards
reinstating the Stated Amount of the RFS Class A Notes, to the extent of any
Carryover RFS Class A Charge Offs;
(C) as a payment to the Currency Swap Providers under the relevant swap
confirmations relating to the Class A Notes, of the A$ Equivalent of any
Carryover Class A Charge Offs; and
(D) as a repayment under the Redraw Facility Agreement, as a reduction
of, and to the extent of, any Carryover Redraw Charge Offs;
(iii) as a payment, denominated in A$, to the Currency Swap Providers
under the relevant swap confirmations relating to the Class B Notes of the A$
Equivalent of any Carryover Class B Charge Offs; and
(iv) to all Principal Draws which have not been repaid as at that
Payment Date.
Any amount to be paid pursuant to paragraphs (ii) and (iii) will be
paid on the Payment Date immediately following the Collection Determination
Date.
(k) US$ Account
The Issuer Trustee shall direct the Currency Swap Providers to pay all
amounts denominated in US$ payable to the Issuer Trustee by the Currency Swap
Providers under the Currency Swaps into the US$ Account or to the Principal
Paying Agent under the Agency Agreement on behalf of the Issuer Trustee. The
Issuer Trustee shall pay all such amounts as follows, and in accordance with the
Note Trust Deed and the Agency Agreement:
(i) under Class A Condition 4, pari passu in relation to the Class A
Notes as payments of Interest on those Class A Notes;
(ii) under Class A Condition 4, pari passu in relation to the Class B
Notes as payments of Interest on those Class B Notes;
(iii) under Class B Condition 5(j)(ii)(C), pari passu in relation to
the Class A Notes in or towards reinstating the Stated Amount of those Class A
Notes, to the extent of the Carryover Class A Charge Offs;
(iv) under Class B Condition 5(j)(iii), pari passu in relation to Class
B Notes in or towards reinstating the Stated Amount of those Class B Notes, to
the extent of the Carryover Class B Charge Offs;
(v) under Class B Condition 5(e)(i)(A), 5(g)(i)(A) and 5(h)(i)(A) pari
passu in relation to the Class A Notes as Class A Principal Payments until the
Class A Stated Amounts have been reduced to zero; and
(vi) under Class B Condition 5(e)(ii), 5(g)(ii) and 5(h)(ii) pari passu
in relation to the Class B Notes as Class B Principal Payments until the Class B
Stated Amounts have been reduced to zero.
(l) Charge Offs
If the Principal Charge Offs (as defined in the Series Notice) for any
Collection Period exceed the Excess Available Income (as defined in the Series
Notice) calculated on the Collection Determination Date for that Collection
Period, the Trust Manager must, on and with effect from the Payment Date
immediately following the end of the Collection Period:
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<PAGE>
(i) reduce pari passu the Class B Stated Amount of each of the Class B
Notes by the US$ Equivalent of the amount of that excess which is attributable
to each Class B Note until the Class B Stated Amount is zero; and
(ii) if the Class B Stated Amount is zero and any amount of that excess
has not been applied under paragraph (i), reduce pari passu and rateably as
between themselves (based on the Stated Amount of the RFSs (if any), the
Principal Outstanding under the Redraw Facility, the Stated Amount of the RFS
Class A Notes (if any) and the A$ Equivalent of the Stated Amount of the Class A
Notes):
(A) the Class A Stated Amount on each of the Class A Notes by the US$
Equivalent of the balance of that excess which is attributable to each Class A
Note until the Class A Stated Amount of that Class A Note is zero;
(B) the RFS Class A Stated Amount on each of the RFS Class A Notes (if
any) by the balance of that excess which is attributable to each RFS Class A
Note until the RFS Class A Stated Amount of that RFS Class A Note is zero;
(C) the RFS Stated Amount on each of the RFSs (if any) by the balance
of that excess which is attributable to each RFS until the RFS Stated Amount is
zero; and
(D) the principal outstanding under the Redraw Facility by the balance
of that excess until the Principal Outstanding is zero.
(m) Calculation of Principal Payments, Stated Amount and Bond Factor
(i) On each Collection Determination Date, the Trust Manager shall
determine:
(A) the amount of any Principal Payment in respect of each Class B Note
on the Payment Date following that Collection Determination Date;
(B) the Stated Amount and Invested Amount of each Class B Note as of
the first day of the next following Interest Period (after deducting any
Principal Payment due to be made in respect of each Class B Note on the next
Payment Date); and
(C) the fraction in respect of each Class B Note expressed as a decimal
to the seventh point (the "Bond Factor" of which the numerator is the aggregate
of the Invested Amount of all Class B Notes at that date less all Principal
Payments to be made on the following Payment Date, and the denominator is the
Initial Invested Amount of the Class B Notes.
(ii) The Trust Manager will notify the Note Trustee, the Principal
Paying Agent, the Agent Bank and (for so long as the Class B Notes are listed on
the London Stock Exchange) the London Stock Exchange by not later than the
Collection Determination Date immediately preceding the relevant Payment Date of
each determination of a Principal Payment, Invested Amount, Stated Amount and
Bond Factor and will immediately cause details of each of those determinations
to be published in accordance with Condition 12. If no Principal Payment is due
to be made on the Class B Notes on any Payment Date a notice to this effect will
be given to the Class B Noteholders in accordance with Class B Condition 12.
(iii) If the Trust Manager does not at any time for any reason
determine a Principal Payment, the Invested Amount, the Stated Amount or the
Bond Factor applicable to Class B Notes in accordance with this paragraph, the
Principal Payment, Invested Amount, the Stated Amount and the Bond Factor shall
be determined by the Note Trustee in accordance with this paragraph and
paragraph (i) above (but based on the information in its possession) and each
such determination or calculation shall be deemed to have been made by the Trust
Manager.
(iv) The Trust Manager will deliver to the Principal Paying Agent a
quarterly servicing report as set forth in clause 11 of the Note Trust Deed.
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(n) Redemption for Taxation or Other Reasons
If the Trust Manager satisfies the Issuer Trustee and the Note Trustee
immediately prior to giving the notice referred to below that either (i) on the
next Payment Date the Issuer Trustee would be required to deduct or withhold
from any payment of principal or interest in respect of the Class B Notes any
amount for or on account of any present or future taxes, duties, assessments or
governmental charges of whatever nature imposed, levied, collected, withheld or
assessed by the Commonwealth of Australia or any of its political sub-divisions
or any of its authorities or (ii) the total amount payable in respect of
interest in relation to the Loans for a Collection Period ceases to be
receivable (whether or not actually received) by the Issuer Trustee during such
Collection Period by reason of any present or future taxes, duties, assessments
or governmental charges of whatever nature imposed, levied, collected, withheld
or assessed by the Commonwealth of Australia or any of its political
sub-divisions or any of its authorities, the Issuer Trustee must, when so
directed by the Trust Manager (at any time at the Trust Manager's option)
(provided that the Issuer Trustee will be in a position on such Payment Date to
discharge (and will so certify to the Issuer Trustee and the Note Trustee) all
its liabilities in respect of the Class B Notes and any amounts required under
the Security Trust Deed to be paid in priority to or pari passu with the Class B
Notes), upon having given not more than 60 nor less than 30 days' notice to the
Class B Noteholders in accordance with Class B Condition 12 redeem all, but not
some only, of the Class B Notes at their Invested Amount (or at the option of
the holders of 75% of the aggregate Invested Amount of Class B Notes at the
time, at their Stated Amount), together with accrued interest to the date of
redemption on any subsequent Payment Date, provided that the holders of 75% of
the aggregate Invested Amount of Class B Notes at the time may elect, and shall
notify the Issuer Trustee and the Trust Manager, that they do not require the
Issuer Trustee to redeem the Class B Notes in the circumstances described above.
(o) Optional Redemption in whole
On any Payment Date, and upon giving no more than 60 nor less than 30
days' notice to the Note Trustee and the Security Trustee, on which the
aggregate principal outstanding of the Loans is less than 10% of the aggregate
principal outstanding of the Loans at the Cut-Off Date, the Issuer Trustee may
redeem all (but not some only) of the Class B Notes at their Stated Amount.
(p) Redemption on Maturity
If not otherwise redeemed, the Class B Notes will be redeemed at their
Stated Amount on the Payment Date falling in __________.
(q) Cancellation
All Class B Notes redeemed in full pursuant to the foregoing provisions
will be cancelled forthwith, and may not be resold or reissued.
(r) Certification
For the purposes of any redemption made pursuant to this Condition 5
the Note Trustee may rely upon an officer's certificate under the Note Trust
Deed from the Trust Manager on behalf of the Issuer Trustee certifying or
stating the opinion of each person signing such certificate as:
(i) to the fair value (within 90 days of such release) of the property
or securities proposed to be released from the Security Trust Deed;
(ii) that in the opinion of such person the proposed release will not
impair the security under the Security Trust Deed in contravention of the
provisions of the Security Trust Deed or the Note Trust Deed;
(iii) that the Issuer Trustee will be in a position to discharge all
its liabilities in respect of the relevant Class B Notes; and
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<PAGE>
(iv) any amounts required under the Security Trust Deed to be paid in
priority to or pari passu with those Class B Notes,
and such officer's certificate shall be conclusive and binding on the
Trustee and the holders of those Class B Notes.
(s) Purchases
The Issuer Trustee may not purchase any Class B Notes at any time.
6. Payments
(a) Method of Payment
Any instalment of interest or principal, payable on any Class B Note
which is punctually paid or duly provided for by the Issuer Trustee to the
Principal Paying Agent on the applicable Payment Date or Maturity Date shall be
paid to the person in whose name such Class B Note is registered on the Record
Date, by cheque mailed first-class, postage prepaid, to such person's address as
it appears on the Note Register on such Record Date, except that, unless
Definitive Notes have been issued pursuant to clause 3.3 of the Note Trust Deed,
with respect to Class B Notes registered on the Record Date in the name of the
nominee of DTC (initially, such nominee to be Cede & Co.), payment will be made
by wire transfer in immediately available funds to the account designated by
such nominee and except for the final instalment of principal payable with
respect to such Class B Note on a Payment Date or Maturity Date.
(b) Initial Principal Paying Agent
The initial Principal Paying Agent is ____________________________, at
its office at________________.
(c) Paying Agents
The Issuer Trustee (or the Trust Manager on its behalf after advising
the Issuer Trustee thereof) may at any time (with the previous written approval
of the Note Trustee) vary or terminate the appointment of any Paying Agent and
appoint additional or other Paying Agents, provided that it will at all times
maintain a Paying Agent having a specified office in London and in New York
City. Notice of any such termination or appointment and of any change in the
office through which any Paying Agent will act will be given in accordance with
Class B Condition 12.
(d) Due date for redemption
If the due date for redemption in full of a Class B Note is not a
Payment Date, the interest accrued in respect of the period from the preceding
Payment Date (or from the Closing Date as the case may be) shall be payable only
against presentation or surrender of the relevant Class B Note.
(e) Payments on Business Days
If the due date for payment of any amount of principal or Interest in
respect of any Class B Note is not a Business Day then payment will not be made
until the next succeeding Business Day and the holder thereof shall not be
entitled to any further interest or other payment in respect of that delay. In
this Condition 6 the expression "Business Day" means any day (other than a
Saturday, Sunday or a public holiday) on which banks are open for business in
the place where the specified office of the Paying Agent is situated and, in the
case of payment by transfer to a US dollar account, in New York City and prior
to any exchange of the Book-Entry Note (in respect of the Class B Notes) for any
definitive Class B Notes, on which DTC is open for business.
(f) Interest
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If Interest is not paid in respect of a Class B Note on the date when
due and payable (other than because the due date is not a Business Day), that
unpaid Interest shall itself bear interest at the Interest Rate applicable from
time to time to the Class B Notes until the unpaid interest, and interest on it,
is available for payment and notice of that availability has been duly given in
accordance with Class B Condition 12.
7. Taxation
All payments in respect of the Class B 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 Trustee or any Paying
Agent is required by applicable law to make any such payment in respect of the
Class B 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 Trustee or that 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 Trustee nor any Paying Agent will be obliged to make any
additional payments to Class B Noteholders in respect of that withholding or
deduction.
8. Prescription
A Class B Note shall become void in its entirety unless surrendered for
payment within ten years of the Relevant Date in respect of any payment thereon
the effect of which would be to reduce the Stated Amount of that Class B Note to
zero. After the date on which a Class B Note becomes void in its entirety, no
claim may be made in respect of it.
As used in these Conditions, the "Relevant Date" means the date on
which a payment first becomes due but, if the full amount of the money payable
has not been received by the Principal Paying Agent or the Note Trustee on or
prior to that date, it means the date on which, the full amount of such money
having been so received, notice to that effect is duly given in accordance with
Class B Condition 12.
9. Events of Default
Each of the following is an "Event of Default":
(a) the Issuer Trustee fails to pay:
(i) any interest within 10 Business Days of the Payment Date on which
the interest was due to be paid to Class A Noteholders, Class B Noteholders or
holders of RFSs or holders of RFS Class A Notes, or
(ii) any other amount owing to Class A Noteholders, Class B Noteholders
or holders of RFSs or holders of RFS Class A Notes or any other Mortgagee (as
defined in the Security Trust Deed) within 10 Business Days of the due date for
payment (or within any applicable grace period agreed with the Mortgagee or
where the Mortgagee is a Noteholder, with the Note Trustee).
(b) the Issuer Trustee fails to perform or observe any other provisions
(other than an obligation referred to in paragraph (a)) of a Transaction
Document (other than the Underwriting Agreement) where such failure will have a
material and adverse affect on the amount of any payment to be made to any
Noteholder, or will materially and adversely affect the timing of such payment,
and that default (if in the opinion of the Security Trustee capable of remedy
(that opinion, being subject to the approval of the Note Trustee in accordance
with the provisions of the Security Trust Deed) is not remedied within 30 days
(or such longer period as may be specified in the notice, that longer period
having been approved by the Note Trustee, for so long as amounts outstanding
under the Offered Notes are 75% of the Secured Moneys) after written notice from
the Security Trustee requiring the failure to be remedied.
(c) any of the following occurs in relation to the Issuer Trustee (in
its personal capacity or as Trustee of the Trust):
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(i) an administrator of the Issuer Trustee is appointed; or
(ii) except for the purpose of a solvent reconstruction or
amalgamation:
(A) an application or an order is made, proceedings are commenced, a
resolution is passed or proposed in a notice of meeting or an application to a
court or other steps (other than frivolous or vexatious applications,
proceedings, notices and steps) are taken for:
(1) the winding up, dissolution or administration of the Issuer
Trustee; or
(2) the Issuer Trustee entering into an arrangement, compromise or
composition with or assignment for the benefit of its creditors or a class of
them; or
(B) the Issuer Trustee ceases, suspends or threatens to cease or
suspend the conduct of all or substantially all of its business or disposes of
or threatens to dispose of substantially all of its assets; or
(iii) the Issuer Trustee is, or under applicable legislation is taken
to be, unable to pay its debts (other than as the result of a failure to pay a
debt or claim the subject of a good faith dispute) or stops or suspends or
threatens to stop or suspend payment of all or a class of its debts (except,
where this occurs in relation to another trust of which it is the trustee);
(iv) a receiver, receiver and manager or administrator is appointed (by
the Issuer Trustee or by any other person) to all or substantially all of the
assets and undertaking of the Issuer Trustee or any part thereof (except, in the
case of the Issuer Trustee where this occurs in relation to another trust of
which it is the trustee); or
(v) anything analogous to an event referred to in paragraphs (i) to
(iv) (inclusive) or having substantially similar effect, occurs with respect to
the Issuer Trustee;
(d) the charge created by the Security Trust Deed is not or ceases to
be a first ranking charge over the Trust Assets, or any other obligation of the
Issuer Trustee (other than as mandatorily preferred by law) ranks ahead of or
pari passu with any of the moneys secured by the Security Trust Deed;
(e) any security interest over the Trust Assets is enforced;
(f) all or any part of any Transaction Document, other than the Redraw
Facility or the Basis Swap (each as defined in the Series Notice), is terminated
or is or becomes void, illegal, invalid, unenforceable or of limited force and
effect, or a party becomes entitled to terminate, rescind or avoid all or part
of any Transaction Document (other than the Redraw Facility or the Basis Swap);
or
(g) without the prior consent of the Security Trustee (that consent, in
accordance with the provisions of the Security Trust Deed, being subject to the
prior written consent of the Note Trustee in accordance with the provisions of
the Security Trust Deed), (i) the Trust is wound up, or the Issuer Trustee is
required to wind up the Trust under the Master Trust Deed or applicable law, or
the winding up of the Trust commences; (ii) the Trust is held or is conceded by
the Issuer Trustee not to have been constituted or to have been imperfectly
constituted; or (iii) unless another trustee is appointed to the Trust under the
Relevant Documents, the Issuer Trustee ceases to be authorised under the Trust
to hold the property of the Trust in its name and to perform its obligations
under the Relevant Documents.
In the event that the security constituted by the Security Trust Deed
becomes enforceable following an event of default under the Notes any funds
resulting from the realisation of such security shall be applied in accordance
with the order of priority of payments as stated in the Security Trust Deed.
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10. Enforcement
(a) At any time after an Event of Default occurs, the Security Trustee
may, with the prior written consent of the Note Trustee in accordance with the
provisions of the Security Trust Deed and shall, if so directed by (a) the Note
Trustee alone, where the Note Trustee is the only Voting Mortgagee, or otherwise
(b) an Extraordinary Resolution (being 75% of votes capable of being cast by
Voting Mortgagees present or in person or by proxy of the relevant meeting or a
written resolution signed by all Voting Mortgagees) of the Voting Mortgagees
(which includes the Note Trustee on behalf of Noteholders, but not the
Noteholders themselves), declare the Class B Notes immediately due and payable
and enforce the Security Trust Deed. If an Extraordinary Resolution of Voting
Mortgagees referred to in sub-paragraph (b) above elects not to direct the
Security Trustee to enforce the Security Trust Deed, in circumstances where the
Security Trustee could enforce, the Note Trustee may nonetheless, and shall at
the direction of the Class B Noteholders, direct the Security Trustee to enforce
the Security Trust Deed on behalf of the Noteholders.
"Voting Mortgagee" means:
(a) for so long as the amounts outstanding under the Class A Notes and
the Class B Notes are 75% or more of all amounts secured by the Security Trust
Deed, the Note Trustee alone; and
(b) at any other time:
(i) the Note Trustee, acting on behalf of the Noteholders under the
Note Trust Deed and the Security Trust Deed; and
(ii) each other Mortgagee under the Security Trust Deed (other than the
Noteholders).
Subject to being indemnified in accordance with the Security Trust
Deed, the Security Trustee shall take all action necessary to give effect to any
direction by the Note Trustee where it is the only Voting Mortgagee or to any
Extraordinary Resolution of the Voting Mortgagees and shall comply with all
directions given by the Note Trustee where it is the only Voting Mortgagee or
contained in or given pursuant to any Extraordinary Resolution of the Voting
Mortgagees in accordance with the Security Trust Deed.
No Noteholder is entitled to enforce the Security Trust Deed or to
appoint or cause to be appointed a receiver to any of the assets secured by the
Security Trust Deed or otherwise to exercise any power conferred by the terms of
any applicable law on chargees except as provided in the Security Trust Deed.
(b) If any of the Class B Notes remains outstanding and are due and
payable otherwise than by reason of a default in payment of any amount due on
the Class B Notes, the Note Trustee must not vote under the Security Trust Deed
to, or otherwise direct the Security Trustee to, dispose of the Mortgaged
Property unless either:
(i) a sufficient amount would be realised to discharge in full all
amounts owing to the Class B Noteholders and any other amounts payable by the
Issuer Trustee ranking in priority to or pari passu with the Class B Notes; or
(ii) the Note Trustee is of the opinion, reached after considering at
any time and from time to time the advice of a merchant bank or other financial
adviser selected by the Note Trustee, that the cash flow receivable by the
Issuer Trustee (or the Security Trustee under the Security Trust Deed) will not
(or that there is a significant risk that it will not) be sufficient, having
regard to any other relevant actual, contingent or prospective liabilities of
the Issuer Trustee, to discharge in full in due course all the amounts referred
to in paragraph (i).
(c) Neither the Note Trustee nor the Security Trustee will be liable
for any decline in the value, nor any loss realised upon any sale or other
dispositions made under the Security Trust Deed, of any Mortgaged Property or
any other property which is charged to the Security Trustee by any other person
in respect of or relating to the obligations of the Issuer Trustee or any third
party in respect of the Issuer Trustee or the Class B Notes or relating in any
way to the Mortgaged Property. Without limitation, neither the Note Trustee nor
the Security Trustee shall be liable for any such
III-18
<PAGE>
decline or loss directly or indirectly arising from its acting, or failing to
act, as a consequence of an opinion reached by it.
(d) The Note Trustee shall not be bound to vote under the Security
Trust Deed, or otherwise direct the Security Trustee under the Security Trust
Deed or to take any proceedings, actions or steps under, or any other
proceedings pursuant to or in connection with the Security Trust Deed, the Note
Trust Deed, any Class B Notes, unless directed or requested to do so by
Noteholders holding at least 75% of the aggregate Invested Amount of Class A
Notes or Class B Notes (as the case may be) at the time and then only if the
Note Trustee is indemnified to its satisfaction against all action, proceedings,
claims and demands to which it may render itself liable and all costs, charges,
damages and expenses which it may incur by so doing.
(e) So long as any of the Class A Notes remains outstanding, the Note
Trustee shall not, and shall not be bound to, act at the request or direction of
the Class B Noteholders under paragraph (d) unless (i) so to do would not in its
opinion be materially prejudicial to the interests of the Class A Noteholders;
(ii) the relevant action is sanctioned by way of written approval of Class A
Noteholders holding at least 75% of the aggregate Invested Amount of Class A
Notes at the time; or (iii) in the case of giving notice pursuant to Condition
10 of the Class B Conditions, the Class A Notes are all then repayable in full.
(f) Only the Security Trustee may enforce the provisions of the
Security Trust Deed and neither the Note Trustee nor any holder of a Class B
Note is entitled to proceed directly against the Issuer Trustee to enforce the
performance of any of the provisions of the Security Trust Deed, the Class B
Notes (including these Class B Conditions).
(g) The rights, remedies and discretions of the Class B Noteholders
under the Security Trust Deed including all rights to vote or give instructions
or consent can only be exercised by the Note Trustee on behalf of the Class B
Noteholders in accordance with the Security Trust Deed. The Security Trustee may
rely on any instructions or directions given to it by the Note Trustee as being
given on behalf of the Class B Noteholders from time to time and need not
enquire whether the Note Trustee or the Noteholders from time to time have
complied with any requirements under the Note Trust Deed or as to the
reasonableness or otherwise of the Note Trustee. The Security Trustee is not
obliged to take any action, give any consent or waiver or make any determination
under the Security Trust Deed without being directed to do so by the Note
Trustee or the Voting Mortgagees in accordance with the Security Trust Deed.
Upon enforcement of the security created by the Security Trust Deed,
the net proceeds thereof may be insufficient to pay all amounts due on
redemption to the Noteholders. The proceeds from enforcement (which will not
include amounts required by law to be paid to the holder of any prior ranking
security interest, the proceeds of or amounts credited to the collateral account
under the Liquidity Facility Agreement (as defined in the Master Trust Deed) and
payable to the Liquidity Facility Provider (as defined in the Master Trust Deed)
and the proceeds of cash collateral lodged with and payable to a Swap Provider
or other provider of a Support Facility (as defined in the Master Trust Deed))
will be applied in the order of priority as set out in the Security Trust Deed.
Any claims of Noteholders remaining after realisation of the security and
application of the proceeds as aforesaid shall, except in certain limited
circumstances, be extinguished.
11. Replacements of Class B Notes
If any Class B Note is lost, stolen, mutilated, defaced or destroyed,
it may be replaced at the specified office of the Principal Paying Agent upon
payment by the claimant of the expenses incurred in connection with that
replacement and on such terms as to evidence and indemnity as the Issuer Trustee
may reasonably require. Mutilated or defaced Class B Notes must be surrendered
before replacements will be issued.
12. Notices
All notices, other than notices given in accordance with the following
paragraph, to Class B Noteholders shall be deemed given if in writing and
mailed, first-class, postage prepaid to each Class B Noteholder, at his or her
address as it appears on the Note Register, not later than the latest date, and
not earlier than the earliest date, prescribed for the
III-19
<PAGE>
giving of such notice. In any case where notice to Class B Noteholders is given
by mail, neither the failure to mail such notice nor any defect in any notice so
mailed to any particular Class B Noteholder shall affect the sufficiency of such
notice with respect to other Class B Noteholders, and any notice that is mailed
in the manner herein provided shall conclusively be presumed to have been duly
given.
A notice may be waived in writing by the relevant Class B Noteholder,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Class B Noteholders shall be filed with the
Note Trustee but such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such a waiver.
Any such notice shall be deemed to have been given on the date such
notice is deposited in the mail.
In case, by reason of the suspension of regular mail services as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event to Class B Noteholders when such notice is required
to be given, then any manner of giving such notice as the Trustee shall direct
the Note Trustee shall be deemed to be a sufficient giving of such notice.
Any notice specifying a Payment Date, an Interest Rate, Interest
payable, a Principal Payment (or the absence of a Principal Payment), an
Invested Amount, a Stated Amount or a Bond Factor shall be deemed to have been
duly given if the information contained in such notice appears on the relevant
page of the Reuters Screen or such other similar electronic reporting service as
may be approved by the Note Trustee and notified to Class B Noteholders (the
"Relevant Screen"). Any such notice shall be deemed to have been given on the
first date on which such information appeared on the Relevant Screen. If it is
impossible or impracticable to give notice in accordance with this paragraph
then notice of the matters referred to in this Condition shall be given in
accordance with the preceding paragraph.
The Principal Paying Agent shall deliver a quarterly servicing report
for each Collection Period to each Class B Noteholder on the Notice Date
relating to such Collection Period in the method provided in the first paragraph
of this Condition 12.
13. Meetings of Voting Mortgagees and Votes of Class B Noteholders;
Modifications; Consents; Waiver
The Security Trust Deed contains provisions for convening meetings of
the Voting Mortgagees to, inter alia, enable the Voting Mortgagees to direct or
consent to the Security Trustee taking or not taking certain actions under the
Security Trust Deed, for example to enable the Voting Mortgagees to direct the
Security Trustee to enforce the Security Trust Deed.
For so long as the amounts outstanding under the Notes are 75% or more
of all amounts secured by the Security Trust Deed, the Note Trustee may direct
the Security Trustee to do any act or thing which the Security Trustee is
required to do, or may only do, at the direction of an Extraordinary Resolution
of the Voting Mortgagees.
Neither the Security Trustee nor the Trust Manager may call a meeting
of Voting Mortgagees without the Note Trustee's consent, if the amounts
outstanding under the Notes are 75% or more of all amounts secured by the
Security Trust Deed.
The Note Trust Deed contains provisions for the Class A Noteholders to
consider any matter affecting their interests. In general, the holders of a
majority of the aggregate Invested Amount of the Class A Notes may take or
consent to any action permitted to be taken by Class A Noteholders under the
Note Trust Deed. Notwithstanding the foregoing, the consent of holders of 75% of
the aggregate Invested Amount of the Class A Notes shall be required to (i)
direct the Note Trustee to direct the Security Trustee to enforce the security
under the Note Trust Deed, (ii) override any waiver by the Note Trustee of a
breach of any provisions of the Transaction Documents or an Event of Default,
and (iii) alter, add, or modify the terms and conditions of the Class A Notes
or the provisions of any of the Transaction Documents if such alteration,
addition or modification is, in the opinion of the Note Trustee, materially
prejudicial or likely to be materially prejudicial to the Offered Noteholders
as a whole or the Class A Noteholders, which shall include
III-20
<PAGE>
any modification to the date of maturity of the Class A Notes or a modification
which would have the effect of postponing any day for payment of interest in
respect of any Class A Notes, reducing or cancelling the amount of principal
payable in respect of any Class A Notes or the rate of interest applicable to
any Class A Notes or altering the percentage of the aggregate Invested Amount
required to consent to any action or altering the currency of payment of any
Class A Notes or an alteration of the date or priority of redemption of the
Class A Notes (any such modification being referred to below as a "Basic Terms
Modification"). The Note Trust Deed contains provisions limiting the powers of
the Class B Noteholders, inter alia, to request or direct the Note Trustee to
take any action that would be materially prejudicial to the interests of the
Class A Noteholders. Except in certain circumstances, the Note Trust Deed
imposes no such limitations on the powers of the Class A Noteholders, the
exercise of which will be binding on the Class B Noteholders, irrespective of
the effect on the Class B Noteholders' interests. Any action taken by the
requisite percentage of the Invested Amount of the Class A Noteholders shall be
binding on all Class A Noteholders (both present and future).
Pursuant to the terms of the Note Trust Deed, the Note Trustee may
agree, without the consent of the Class B Noteholders, among other things, (i)
to any modification (except a Basic Terms Modification) of, or to the waiver or
authorisation of any breach or proposed breach of the Class B Notes (including
these Conditions), or any of the Transaction Documents which is not, in the
opinion of the Note Trustee materially prejudicial to the interests of the Class
B Noteholders or (ii) to any modification of the Class B Notes (including these
Conditions, or any of the Transaction Documents which, in the Note Trustee's
opinion, is to correct a manifest error or is of a formal, minor or technical
nature. The Note Trustee may also, without the consent of the Class B
Noteholders, determine that any Event of Default or any condition, event or act
which with the giving of notice and/or lapse of time and/or the issue of a
certificate would constitute an Event of Default shall not, or shall not subject
to specified conditions, be treated as such. Any such modification, waiver,
authorisation or determination shall be binding on the Class B Noteholders and,
unless the Note Trustee agrees otherwise, any such modification shall be
notified to the Class B Noteholders in accordance with Class B Condition 12 as
soon as practicable thereafter.
14. Indemnification and Exoneration of the Note Trustee and the Security
Trustee
The Note Trust Deed contains provisions for the indemnification of the
Note Trustee and for its relief from responsibility, including provisions
relieving it from taking proceedings to realise the security and to obtain
repayment of the Class B Notes unless indemnified to its satisfaction. Each of
the Note Trustee and the Security Trustee is entitled to enter into business
transactions with the Issuer Trustee and/or any other party to the Relevant
Documents without accounting for any profit resulting from such transactions.
Neither the Security Trustee nor the Note Trustee will be responsible for any
loss, expense or liability which may be suffered as a result of any assets
secured by the Security Trust Deed, Mortgaged Property or any deeds or documents
of title thereto, being uninsured or inadequately insured or being held by or to
the order of the Servicer or any of its affiliates or by clearing organisations
or their operators or by any person on behalf of the Note Trustee.
15. Limitation of liability of the Issuer Trustee
(a) General
Clause 33 of the Master Trust Deed applies to the obligations and
liabilities of the Issuer Trustee in relation to this Class B Note.
(b) Liability of Trustee limited to its right of indemnity
(i) This Class B Note applies to the Issuer Trustee only in its
capacity as trustee of the Trust and in no other capacity. A liability arising
under or in connection with this Class B Note or the Trust can be enforced
against the Issuer Trustee only to the extent to which it can be satisfied out
of property of the Trust out of which the Issuer Trustee is actually indemnified
for the liability. This limitation of the Issuer Trustee's liability applies
despite any other provision of this Class B Note or any other Transaction
Document and extends to all liabilities and obligations of the Issuer Trustee in
any way connected with any representation, warranty, conduct, omission,
agreement or transaction related to this Class B Note or the Trust.
III-21
<PAGE>
(ii) None of the Note Trustee or the Class B Noteholders may take
action against the Issuer Trustee in any capacity other than as trustee of the
Trust or seek the appointment of a receiver (except under the Security Trust
Deed), or a liquidator, an administrator or any similar person to the Issuer
Trustee or prove in any liquidation, administration or arrangements of or
affecting the Issuer Trustee.
(iii) The provisions of this Condition 15 shall not apply to any
obligation or liability of the Issuer Trustee to the extent that it is not
satisfied because under a Transaction Document or by operation of law there is a
reduction in the extent of the Issuer Trustee's indemnification out of the Trust
Assets as a result of the Issuer Trustee's fraud, negligence or breach of trust.
(iv) It is acknowledged that the Trust Manager, the Servicer, each
Paying Agent, the Agent Bank and the Note Trustee (each a "Relevant Party") are
responsible under the Transaction Documents for performing a variety of
obligations relating to the Trust. No act or omission of the Issuer Trustee
(including any related failure to satisfy its obligations under this Class B
Note or a Transaction Document) will be considered fraud, negligence or breach
of trust of the Issuer Trustee for the purpose of sub-paragraph (iii) of this
Condition 15 to the extent to which the act or omission was caused or
contributed to by any failure by any Relevant Party or any other person who
provides services in respect of the Trust (other than a person who has been
delegated or appointed by the Issuer Trustee and for whom the Issuer Trustee is
responsible under the Transaction Documents, other than a Relevant Party) to
fulfil its obligations relating to the Trust or by any other act or omission of
a Relevant Party or any other person who provides services in respect of the
Trust (other than a person who has been delegated or appointed by the Issuer
Trustee and for whom the Issuer Trustee is responsible under the Transaction
Documents, other than a Relevant Party).
(v) No attorney, agent, receiver or receiver and manager appointed in
accordance with a Transaction Document (including without limitation a Relevant
Party) has authority to act on behalf of the Issuer Trustee in a way which
exposes the Issuer Trustee to any personal liability and no act or omission of
any such person will be considered fraud, negligence or breach of trust of the
Issuer Trustee for the purpose of sub-paragraph (iii), if the Issuer Trustee has
exercised reasonable care in the selection and supervision of such a person.
16. Governing Law
The Class B Notes and the Relevant Documents (other than the Security
Trust Deed which is governed by the laws of the Australian Capital territory and
the Currency Swap with Morgan Guaranty Trust Company of New York, London Office,
which is governed by the laws of England) are governed by, and shall be
construed in accordance with, the laws of New South Wales, Australia.
Summary of Provisions Relating to the Class B Notes While in Book-Entry Form
The Class B Notes will initially be represented by typewritten
book-entry notes (the "Book-Entry Class B Notes"), without coupons, in the
principal amount of US$________________. The Book-Entry Class B Notes will be
deposited with the Common Depositary for DTC on or about the Closing Date. Upon
deposit of the Book-Entry Class B Notes with the Common Depositary, DTC will
credit each investor in the Class B Notes with a principal amount of Class B
Notes for which it has subscribed and paid.
The Book-Entry Class B Notes will be exchangeable for definitive Class
B Notes in certain circumstances described below.
Each person who is shown in the Note Register as the holder of a
particular principal amount of Class B Notes will be entitled to be treated by
the Issuer Trustee and the Note Trustee as a holder of such principal amount of
Class B Notes and the expression "Class B Noteholder" shall be construed
accordingly, but without prejudice to the entitlement of the holder of the
Book-Entry Class B Note to be paid principal and interest thereon in accordance
with its terms. Such persons shall have no claim directly against the Issuer
Trustee in respect of payment due on the Class B Notes for so long as the Class
B Notes are represented by a Book-Entry Class B Note and the relevant
obligations of the Issuer Trustee will be discharged by payment to the
registered holder of the Book-Entry Class B Note in respect of each amount so
paid.
III-22
<PAGE>
(a) Payments
Interest and principal on each Book-Entry Class B Note will be payable
by the Principal Paying Agent to the Common Depositary provided that:
(i) no payment of interest may be made by the Issuer Trustee or any
Paying Agent in the United States of America or the Commonwealth of Australia or
their possessions or into a bank account or to an address in the United States
or the Commonwealth of Australia or their possessions, and
Each of the persons appearing from time to time as the holder of a
Class B Note will be entitled to receive any payment so made in respect of that
Class B Note in accordance with the respective rules and procedures of DTC. Such
persons will have no claim directly against the Issuer Trustee in respect of
payments due on the Class B Notes which must be made by the holder of the
relevant Book-Entry Class B Note, for so long as such Book-Entry Class B Note is
outstanding.
A record of each payment made on a Book-Entry Class B Note,
distinguishing between any payment of principal and any payment of interest,
will be recorded in the Note Register by the Principal Paying Agent, and such
record shall be prima facie evidence that the payment in question has been made.
(b) Exchange
The Book-Entry Class B Note will be exchangeable for definitive Class B
Notes only if:
(a) the Trust Manager advises the Principal Paying Agent in writing
that the Clearing Agency is no longer willing or able properly to
discharge its responsibilities with respect to the Class A Notes or the
Clearing Agency ceases to carry on business, and the Trust Manager is
unable to locate a qualified successor;
(b) the Issuer Trustee, at the direction of the Trust Manager (at the
Trust Manager's option) advises the Principal Paying Agent in writing
that the book entry system through the Clearing Agency is or is to be
terminated; or
(c) after the occurrence of an Event of Default, the Class B Note
Owner's representing beneficial interests aggregating to at least a
majority of the aggregate Invested Amount of the Class B Notes advise
the Principal Paying Agent and Issuer Trustee through the Clearing
Agency in writing that the continuation of a book entry system through
the Clearing Agency is no longer in the best interests of the Note
Owners,
then the Principal Paying Agent shall notify all Class B Note Owners and the
Issuer Trustee of the occurrence of any such event and of the availability of
Definitive Notes to Class B Note Owners requesting the same. Upon the surrender
of the Book-Entry Notes to the Issuer Trustee by the Clearing Agency, and the
delivery by the Clearing Agency of the relevant registration instructions to the
Issuer Trustee, the Issuer Trustee shall execute and procure the Principal
Paying Agent to authenticate the Definitive Notes in accordance with the
instructions of the Clearing Agency.
(c) Notices
So long as the Notes are represented by the Book-Entry Class B Note and
the same is/are held on behalf of DTC, notices to Class B Noteholders may be
given by delivery of the relevant notice to DTC for communication by them to
entitled account holders in substitution for delivery to each Class B Noteholder
as required by the Class B Conditions.
(d) Cancellation
Cancellation of any Class B Note required by the Class B Conditions
will be effected by reduction in the principal amount of the relevant Book-Entry
Class B Note.
III-23
<PAGE>
No person has been authorized to give any information or
to make any representations other than those contained in
this Prospectus and, if given or made, such information
or representations must not be relied upon. This
Prospectus does not constitute an offer to sell or
solicitation of an offer to buy any securities other than
the Offered Notes offered hereby, nor an offer of the
Offered Notes in any state or jurisdiction in which, or
to any person to whom, such offer would be unlawful. The
delivery of this Prospectus at any time does not imply
that information herein or therein is correct as of any
time subsequent to its date; however, if any material
change occurs while the Prospectus is required by law to
be delivered, the Prospectus will be amended or
supplemented accordingly.
-------------
TABLE OF CONTENTS
Prospectus
<TABLE>
<CAPTION>
Page
<S> <C>
Summary of Terms ............................... 13
Structural Chart ............................... 28
Cash Flow Summary .............................. 29
Cash Flow Chart ................................ 32
Risk Factors ................................... 34
Formation of the Trust ......................... 44
Security for the Notes ......................... 45
The Trust Fund ................................. 51
The Issuer Trustee ............................. 61
The Note Trustee ............................... 66
Originator of the Housing Loans ................ 66
The Servicer ................................... 66
The Trust Manager .............................. 70
Westpac Residential Loan Program ............... 73
The Mortgage Insurance Policies ................ 77
Prepayment and Yield Considerations ............ 84
Description of the Offered Notes ............... 88
Description of the Servicing Agreements ........ 124
The Liquidity Facility ......................... 130
Description of the Swap Agreements ............. 133
Currency Swap Providers ........................ 137
Certain Legal Aspects of
the Housing Loans .............................. 138
Use of Proceeds ................................ 144
United States Federal Income Tax
Consequences ................................... 144
Australian Tax Matters ......................... 146
ERISA Considerations ........................... 148
Ratings of the Notes ........................... 149
Legal Investment Considerations ................ 149
Underwriting ................................... 149
Listing and General Information ................ 151
Legal Matters .................................. 153
Index of Defined Terms ......................... 154
Appendix I--Glossary of Australian
Legal Terms .................................... I-1
Appendix II--Terms and Conditions of
the Class A Notes .............................. II-1
Appendix III--Terms and Conditions of
the Class B Notes .............................. III-1
</TABLE>
US$
------------------
Westpac Securities
Administration Limited
in its capacity as Issuer Trustee of
the Series 1998-2G WST Trust
US$__________ Class A Mortgage
Backed Floating Rate Notes due _____
US$__________ Class B Mortgage
Backed Floating Rate Notes due _____
---------------------
PROSPECTUS
---------------------
---------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution*
The following table sets forth the estimated expenses in connection with
the issuance and distribution of the Notes being registered under this
Registration Statement, other than underwriting discounts and commissions:
<TABLE>
<S> <C>
SEC Registration Fee .................................................
Printing and Engraving ...............................................
Legal Fees and Expenses ..............................................
Trustee Fees and Expenses ............................................
Rating Agency Fees ...................................................
Accounting Fees & Expenses ...........................................
Miscellaneous ........................................................
--------
Total ...........................................................
--------
--------
</TABLE>
- --------------
* All amounts except the SEC Registration Fee are estimates of expenses
incurred in connection with the issuance and distribution of the Notes.
Item 14. Indemnification of Directors and Officers.
Pursuant to Section 109 of the Articles of Association of the Registrant:
(1) To the extent permitted by law and without limiting the powers of the
Registrant, the Registrant must indemnify each person who is, or has been, a
director or secretary of the Registrant against any liability which results
directly or indirectly from facts or circumstances relating to the person
serving or having served in that capacity in relation to the Registrant or any
of its subsidiaries or in the capacity of an employee of the Registrant or any
of its subsidiaries:
(a) to any person (other than the Registrant or a related body corporate),
which does not arise out of conduct involving a lack of good faith or
conduct known to the person to be wrongful;
(b) for costs and expenses incurred by the person in defending
proceedings, whether civil or criminal, in which judgment is given in favor
of the person or in which the person is acquitted, or in connection with
any application in relation to such proceedings in which the court grants
relief to the person under the Corporations Law and the Corporations
Regulations of Australia.
(2) The Registrant need not indemnify a person as provided for in paragraph (1)
in respect of a liability to the extent that the person is entitled to an
indemnity in respect of that liability under a contract of insurance.
(3) To the extent permitted by law and without limiting the powers of the
Registrant, the board of directors may authorize the Registrant to, and the
Registrant may enter into any:
(a) documentary indemnity in favor of; or
(b) insurance policy for the benefit of,
a person who is, or has been, a director, secretary, auditor, employee or
other officer of the Registrant or of a subsidiary of the Registrant, which
indemnity or insurance policy may be in such terms as the board of
directors approves and, in particular, may apply to acts or omissions prior
to or after the time of entering into the indemnity or policy; and
<PAGE>
(4) The benefit of each indemnity given in paragraph (1) of Section 109
continues, even after its terms or the terms of this paragraph are modified or
deleted, in respect of a liability arising out of acts or omissions occurring
prior to the modification or deletion.
Item 15. Recent Sales of Unregistered Securities.
The Registrant has not previously sold unregistered securities.
Item 16. Exhibits and Financial Statement Schedules.
<TABLE>
<CAPTION>
<S> <C>
1.1 Form of Underwriting Agreement.*
3.1 Memorandum of Association of the Registrant.*
3.2 Articles of Association of the Registrant.*
4.1 Master Trust Deed.*
4.2 Form of the Series Notice.*
4.3 Form of the Note Trust Deed.*
4.4 Form of the Security Trust Deed.*
5.1 Opinion of Mayer, Brown & Platt as to legality of the
Offered Notes.*
8.1 Opinion of Mayer, Brown & Platt as to certain tax matters
(included in Exhibit 5.1 hereof).*
8.2 Opinion of Allen Allen & Hemsley as to certain tax
matters.*
10.1 The Servicing Agreement.*
10.2 Form of Servicing Agreement Amendment Agreement.*
10.3 Form of the Liquidity Facility Agreement.*
10.4 Form of the Redraw Facility Agreement.*
10.5 Form of the Currency Swap (Westpac and Issuer Trustee).*
10.6 Form of the Currency Swap (Morgan Guaranty and Issuer
Trustee).*
10.7 Form of Interest Rate Swaps.*
23.1 Consent of Mayer, Brown & Platt (included in Exhibit 5.1
hereof).*
23.2 Consent of Allen Allen & Hemsley (included in Exhibit 8.2
hereof).*
24.1 Power of Attorney (included on signature pages).*
25.1 Statement of Eligibility of Trustee.*
99.1 Opinion of Allen Allen & Hemsley as to Enforceability of
U.S. Judgments under Australian Law.*
</TABLE>
- ---------------
* To be filed by Amendment.
Item 17. Undertakings.
The undersigned Registrant on behalf of the Westpac Securitization Trust,
Series 1998-1G (the "Trust") hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement;
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933, as amended (the "Act");
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement.
<PAGE>
(2) That, for the purpose of determining any liability under the Act,
each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) To file a post-effective amendment to the registration statement
to include any financial statements required by Rule 3-19 at the start of
any delayed offering or throughout a continuous offering.
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
For purposes of determining any liability under the Securities Act of 1933,
the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
For the purposes of determining any liability under the Securities Act of
1933, each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-11 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Sydney, Australia, on the 24th day of September 1998.
Westpac Securitisation Management Pty Limited
By /s/ Lewis E. Love, Jr.
---------------------------------------
Lewis E. Love, Jr.
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints each of Lewis E. Love, Jr. or Kimberly Gire, or
any of them, his true and lawful attorneys-in-fact and agents, with full power
of substitution and resubstitution, for him and his name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or any of them, or their or his substitutes, may lawfully do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this to the
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ R. Patrick Handley Principal Executive September 24, 1998
- ------------------------------ Officer and Director
R. Patrick Handley
/s/ Marten Touw Principal Financial September 24, 1998
- ------------------------------ Officer and Director
Marten Touw
/s/ Lucy Beretin Principal Accounting September 24, 1998
- ------------------------------ Officer
Lucy Beretin
/s/ Kimberley Gire Director September 24, 1998
- ------------------------------
Kimberley Gire
/s/ Lewis E. Love, Jr. Director September 24, 1998
- ------------------------------
Lewis E. Love, Jr.
/s/ Phil Chronican Director September 24, 1998
- ------------------------------
Phil Chronican
</TABLE>
<PAGE>
SIGNATURE OF AUTHORIZED REPRESENTATIVE
Pursuant to the requirements of Section 6(a) of the Securities Act of 1933,
the undersigned hereby certifies that it is the duly authorized representative
in the United States of the Registrant with respect to the Registration
Statement and signs this Registration Statement solely in such capacity and for
the limited purpose of said Section 6(a).
/s/ Lewis E. Love, Jr.
--------------------------------------------
Name: Lewis E. Love, Jr.
Director & Secretary
Address: Westpac Securitisation Management
Pty Limited
575 Fifth Avenue
39th Floor
New York, New York 10017-2422
Telephone: (212) 551-1905
<PAGE>
EXHIBITS INDEX
<TABLE>
<CAPTION>
Sequential
Exhibit No. Description of Exhibit Page Number
----------- ---------------------- ------------
<S> <C> <C>
1.1 Form of Underwriting Agreement.*
3.1 Memorandum of Association of the Registrant.*
3.2 Articles of Association of the Registrant.*
4.1 Master Trust Deed.*
4.2 Form of the Series Notice.*
4.3 Form of the Note Trust Deed.*
4.4 Form of the Security Trust Deed.*
5.1 Opinion of Mayer, Brown & Platt as to legality
of the Offered Notes.*
8.1 Opinion of Mayer, Brown & Platt as to certain
tax matters (included in Exhibit 5.1 hereof).*
8.2 Opinion of Allen Allen & Hemsley as to certain
tax matters.*
10.1 The Servicing Agreement.*
10.2 Form of the Servicing Agreement Amendment
Agreement.*
10.3 Form of the Liquidity Facility Agreement.*
10.4 Form of the Redraw Facility Agreement.*
10.5 Form of the Currency Swap (Westpac and Issuer
Trustee).*
10.6 Form of the Currency Swap (Morgan Guaranty and
Issuer Trustee).*
10.7 Form of Interest Rate Swaps.*
23.1 Consent of Mayer, Brown & Platt (included in
Exhibit 5.1 hereof).*
23.2 Consent of Allen Allen & Hemsley (included in
Exhibit 8.2 hereof).*
24.1 Power of Attorney (included on signature
pages).*
25.1 Statement of Eligibility of Trustee.*
99.1 Opinion of Allen Allen & Hemsley as to
Enforceability of U.S. Judgments under
Australian Law.*
</TABLE>
- ----------------------
* To be filed by amendment.
