<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 3, 2000
REGISTRATION NO. 333-
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM S-11
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
CRUSADE MANAGEMENT LIMITED
(ACN 072 715 916)
(Exact name of registrant as specified in its governing instruments)
----------------
LEVEL 4
4-16 MONTGOMERY STREET
KOGARAH NSW 2217
AUSTRALIA
TELEPHONE: 612 9952 1315
(Address, including zip code/post code, and telephone number, including area
code, of registrant's principal executive offices)
----------------
AGENT FOR SERVICE
CT CORPORATION SYSTEM
111 EIGHTH AVENUE
13TH FLOOR
NEW YORK, NEW YORK 10011
TELEPHONE: 212-590-9100
(Name, address, including zip code and telephone number, including area code,
of agent for service)
----------------
WITH A COPY TO:
<TABLE>
<S> <C>
MICHAEL H.S. BOWAN DIANE CITRON, ESQ.
COMPANY SECRETARY MAYER, BROWN & PLATT
CRUSADE MANAGEMENT LIMITED 1675 BROADWAY
LEVEL 4, 4-16 MONTGOMERY STREET NEW YORK, NEW YORK 10019
KOGARAH NSW 2217, AUSTRALIA
</TABLE>
----------------
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. -
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
======================================================================================================================
PROPOSED PROPOSED
MAXIMUM MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED PER UNIT OFFERING PRICE* FEE
- --------------------------------------------- -------------- ---------------- ----------------- -------------
<S> <C> <C> <C> <C>
Mortgage Backed Floating Rate Notes ......... $1,000,000 100% $1,000,000 $ 264.00
======================================================================================================================
</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.
===============================================================================
<PAGE>
CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
NAME AND CAPTION IN FORM S-11 CAPTION IN PROSPECTUS
---------------------------------------- --------------------------------------
<S> <C> <C>
1. Forepart of Registration Statement Front Cover of Registration
and Outside Front Cover Page of Statement; Outside Front Cover Page
Prospectus of Prospectus
2. Inside Front and Outside Back Cover Inside Front Cover Page of
Pages of Prospectus Prospectus; Outside Back Cover Page
of Prospectus
3. Summary Information, Risk Factors Summary; Risk Factors
and Ratio of Earnings to Fixed
Charges
4. Determination of Offering Price *
5. Dilution *
6. Selling Security Holders *
7. Plan of Distribution Method of Distribution
8. Use of Proceeds Use of Proceeds
9. Selected Financial Data *
10. Management's Discussion and Description of the Trust; Description
Analysis of Financial Condition and of the Assets of the Trust
Results of Operations
11. General Information as to Registrant The Issuer Trustee, St.George Bank
Limited and the Manager
12. Policy with respect to Certain Description of the Notes
Activities
13. Investment Policies of Registrant Description of the Transaction
Documents
14. Description of Real Estate The Assets of the Trust; St.George
Residential Loan Program
15. Operating Data *
16. Tax Treatment of Registrant and Its United States Federal Income Tax
Security Holders Matters, 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 Notes
19. Legal Proceedings *
20. Security Ownership of Certain The Issuer Trustee, St.George Bank
Beneficial Owners and Management Limited and the Manager
21. Directors and Executive Officers *
22. Executive Compensation *
23. Certain Relationships and Related *
Transactions
24. Selection, Management and Custody Description of the Notes; Description
of Registrant's Investments of the Transaction Documents;
St.George Residential Loan Program
25. Policies with Respect to Certain Description of the Notes
Transactions
26. Limitations of Liability Description of the Transaction
Documents
27. Financial Statements and Information *
28. Interests of Named Experts and *
Counsel
29. Disclosure of Commission Position on Part II of Registration Statement
Indemnification for Securities Act
Liabilities
30. Quantitative and Qualitative *
Disclosures about Market Risk
*Not Applicable
</TABLE>
<PAGE>
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN
OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
PRELIMINARY PROSPECTUS
SUBJECT TO COMPLETION, DATED [ ]
US$[ ]
(Approximate)
CRUSADE GLOBAL TRUST NO. 1 OF 2000
[LOGO]
CRUSADE MANAGEMENT LIMITED (ACN 072 715 916)
Manager
ST.GEORGE BANK LIMITED (ACN 055 513 070)
Seller and Servicer
AXA TRUSTEES LIMITED (ACN 004 029 841)
Issuer Trustee
-----------------
The notes will be collateralized by a pool of housing loans secured by
properties located in Australia. The Crusade Global Trust No. 1 of 2000 will be
governed by the laws of New South Wales, Australia.
The notes are not deposits and neither the notes nor the underlying
housing loans are insured or guaranteed by any governmental agency or
instrumentality. The notes represent obligations of the Crusade Global Trust
No. 1 of 2000 only and do not represent obligations of or interests in, and are
not guaranteed by, Crusade Management Limited, St.George Bank Limited or AXA
Trustees Limited.
An application has been made to the London Stock Exchange Limited to admit
the Class A-1, Class A-2 and Class A-3 notes to the Official List.
Delivery of the Class A notes in book-entry form through The Depository
Trust Company, Clearstream, Luxembourg and the Euroclear System will be made on
or about [ ].
INVESTING IN THE NOTES INVOLVES RISKS. SEE "RISK FACTORS" ON PAGE [18].
<TABLE>
<CAPTION>
INITIAL UNDERWRITING PROCEEDS
PRINCIPAL INITIAL PRICE TO DISCOUNTS AND TO ISSUER
BALANCE INTEREST RATE PUBLIC COMMISSIONS TRUSTEE
------------- --------------- -------------- --------------- -----------
<S> <C> <C> <C> <C> <C>
Class A-1 Notes... $[ ] LIBOR + [ ]% 100.0000% [ ]% [ ]%
Class A-2 Notes... $[ ] LIBOR + [ ]% 100.0000% [ ]% [ ]%
Class A-3 Notes... $[ ] LIBOR + [ ]% 100.0000% [ ]% [ ]%
Total............. $[ ] $[ ] $[ ] $[ ]
</TABLE>
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these notes or determined if this
prospectus is accurate or complete. Any representation to the contrary is a
criminal offense.
CREDIT SUISSE FIRST BOSTON DEUTSCHE BANC ALEX. BROWN
The date of this prospectus is [ ]
<PAGE>
You should rely only on the information contained in this prospectus. No
one has been authorized to provide you with any other, or different,
information.
The securities are not being offered in any state where the offer is not
permitted.
The Class A notes will be offered by the underwriters, subject to prior
sale, if and when they are issued to and accepted by them. The underwriters
reserve the right to reject an order in whole or in part and to withdraw,
cancel or modify the offer without notice.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Disclaimers with Respect to Sales to
Non-U.S. Investors ........................ 3
Australian Disclaimers ....................... 6
Summary ...................................... 7
Parties to the Transaction ................ 7
Structural Diagram ........................ 8
Summary of the Notes ...................... 9
Structural Overview ....................... 10
Credit Enhancements ....................... 10
Liquidity Enhancements .................... 11
Redraws ................................... 11
Limited Substitution ...................... 11
Hedging Arrangements ...................... 12
Optional Redemption ....................... 12
The Housing Loan Pool ..................... 13
Withholding Tax ........................... 14
U.S. Tax Status ........................... 14
Legal Investment .......................... 14
ERISA Considerations ...................... 14
Book-Entry Registration ................... 14
Collections ............................... 15
Interest on the Notes ..................... 15
Principal on the Notes .................... 15
Allocation of Cash Flows .................. 16
Distribution of Total Available Funds on
a Payment Date ......................... 17
Distribution of Principal Collections on
a Payment Date ......................... 18
Risk Factors ................................. 19
Capitalized Terms ............................ 30
U.S. Dollar Presentation ..................... 30
The Issuer Trustee, St.George Bank and
the Manager ............................... 30
The Issuer Trustee ........................ 30
St.George Bank ............................ 31
The Manager ............................... 31
Description of the Trust ..................... 32
St.George Bank Securitisation Trust
Programme .............................. 32
Crusade Global Trust No. 1 of 2000 ........ 32
Description of the Assets of the Trust ....... 32
Assets of the Trust ....................... 32
The Housing Loans ......................... 33
Transfer and Assignment of the
Housing Loans .......................... 33
Representations, Warranties and
Eligibility Criteria ................... 34
Breach of Representations and
Warranties ............................. 35
Substitution of Housing Loans ............. 36
<CAPTION>
PAGE
<S> <C>
Other Features of the Housing Loans ....... 37
Details of the Housing Loan Pool .......... 38
Housing Loan Information .................. 39
St.George Residential Loan Program ........... 46
Origination Process ....................... 46
Approval and Underwriting Process ......... 46
St.George Bank's Product Types ............ 47
Special Features of the Housing Loans...... 48
Additional Features ....................... 52
The Mortgage Insurance Policies .............. 52
General ................................... 52
Coverage .................................. 52
Timely Payment Cover ...................... 53
Requirement and Restrictions .............. 53
Description of the Mortgage Insurer ....... 53
Description of the Class A Notes ............. 54
General ................................... 54
Form of the Class A Notes ................. 54
Distributions on the Notes ................ 58
Key Dates and Periods ..................... 59
Calculation of Total Available Funds ...... 60
Available Income .......................... 61
Principal Draws ........................... 62
Liquidity Draws ........................... 63
Distribution of Total Available Funds ..... 63
Interest on the Notes ..................... 65
Excess Available Income ................... 66
Gross Principal Collections ............... 67
Principal Distributions ................... 69
Redraws ................................... 71
Application of Principal Charge Offs ...... 72
Payments into US$ Account.................. 73
Payments out of US$ Account................ 73
The Interest Rate Swaps ................... 74
The Currency Swap ......................... 79
Withholding or Tax Deductions ............. 84
Redemption of the Notes for Taxation
or Other Reasons ....................... 84
Redemption of the Notes upon an
Event of Default ....................... 85
Optional Redemption of the Notes .......... 85
Final Maturity Date ....................... 85
</TABLE>
1
<PAGE>
<TABLE>
<CAPTION>
PAGE
<S> <C>
Final Redemption of the Notes ........... 86
Termination of the Trust ................ 86
Prescription ............................ 87
Voting and Consent of Noteholders ....... 87
Reports to Noteholders .................. 88
Description of the Transaction
Documents ............................. 89
Trust Accounts .......................... 90
Liquidity Reserve ....................... 90
Modifications ........................... 91
The Issuer Trustee ...................... 92
The Manager ............................. 96
The Note Trustee ........................ 98
The Security Trust Deed ................. 99
The Redraw Facility ..................... 108
The Servicing Agreement ................. 110
The Custodian Agreement ................. 115
The Seller Loan Agreement ............... 117
The Servicer ............................... 118
Servicing of Housing Loans .............. 118
Collection and Enforcement
Procedures ........................... 118
Collection and Foreclosure Process ...... 119
Servicer Delinquency Experience ......... 119
Prepayment and Yield Considerations ........ 122
General ................................. 122
Prepayments ............................. 122
Weighted Average Lives .................. 123
Use of Proceeds ............................ 129
Legal Aspects of the Housing Loans ......... 129
General ................................. 129
Nature of Housing Loans as Security ..... 129
Enforcement of Registered Mortgages...... 132
Penalties and Prohibited Fees ........... 133
Bankruptcy .............................. 133
Environmental ........................... 134
Insolvency Considerations ............... 134
Tax Treatment of Interest on
Australian Housing Loans ............. 135
Consumer Credit Legislation ............. 135
United States Federal Income Tax
Matters ................................. 136
General ................................. 137
<CAPTION>
PAGE
<S> <C>
Sale of Notes ........................... 137
Market Discount ......................... 138
Premium ................................. 139
Backup Withholding ...................... 139
Australian Tax Matters ..................... 140
Payments of Principal, Premiums and
Interest ............................. 140
Profit on Sale .......................... 141
Goods and Services Tax .................. 142
Other Taxes ............................. 143
Enforcement of Foreign Judgments in
Australia ............................... 144
Exchange Controls and Limitations .......... 145
ERISA Considerations ....................... 145
Legal Investment Considerations ............ 146
Available Information ...................... 147
Ratings of the Notes ....................... 147
Plan of Distribution ....................... 147
Underwriting ............................ 147
Offering Restrictions ................... 149
Listing and General Information ............ 150
Listing ................................. 150
Authorization ........................... 150
Litigation .............................. 151
Euroclear and Clearstream, Luxembourg ... 151
Transaction Documents Available for
Inspection ........................... 151
Consents to Opinions .................... 152
Announcement ............................... 152
Legal Matters .............................. 153
Glossary ................................... 154
Appendix I
Terms and Conditions of the Class A
Notes ................................ I-1
</TABLE>
2
<PAGE>
DISCLAIMERS WITH RESPECT TO SALES TO NON-U.S. INVESTORS
This section applies only to the offering of the notes in countries other
than the United States of America. In the section of this prospectus entitled
"Disclaimers with Respect to Sales to Non-U.S. Investors", references to AXA
Trustees Limited are to that company in its capacity as trustee of the Crusade
Global Trust No. 1 of 2000, and not its personal capacity. AXA Trustees Limited
is not responsible or liable for this prospectus in any capacity in the United
States of America. Crusade Management Limited is responsible and liable for
this prospectus in the United States of America.
Other than in the United States of America, no person has taken or will
take any action that would permit a public offer of the notes in any country or
jurisdiction. The notes may be offered non-publicly in other jurisdictions. The
notes may not be offered or sold, directly or indirectly, and neither this
prospectus nor any form of application, advertisement or other offering
material may be issued, distributed or published in any country or
jurisdiction, unless permitted under all applicable laws and regulations. The
underwriters have represented that all offers and sales by them have been in
compliance, and will comply, with all applicable restrictions on offers and
sales of the Class A notes. You should inform yourself about and observe any of
these restrictions. For a description of further restrictions on offers and
sales of the notes, see "Plan of Distribution."
This prospectus does not and is not intended to constitute an offer to
sell or a solicitation of any offer to buy any of the notes by or on behalf of
AXA Trustees Limited in any jurisdiction in which the offer or solicitation is
not authorized or in which the person making the offer or solicitation is not
qualified to do so or to any person to whom it is unlawful to make an offer or
solicitation in such jurisdiction.
For the purposes of the Financial Services Act 1986 of the United Kingdom
and the London Stock Exchange only:
o AXA Trustees Limited accepts responsibility for the information
contained in this prospectus. To the best of the knowledge and belief
of AXA Trustees Limited, which has taken all reasonable care to ensure
that such is the case, the information contained in this prospectus is
in accordance with the facts and does not omit anything likely to
affect the import of that information.
o St.George Bank Limited accepts responsibility for the information
contained in "Summary -- The Housing Loan Pool", "The Issuer Trustee,
St.George Bank and the Manager -- St.George Bank" and "-- the
Manager", "Description of the Assets of the Trust", "St.George
Residential Loan Program", "Description of the Class A Notes -- Form
of the Class A Notes" and "-- The Interest Rate Swaps" except for the
description under the caption "Standby Swap Providers" and "The
Servicer". To the best of the knowledge and belief of St.George Bank
Limited, which has taken all reasonable care to ensure that such is
the case, the information contained in those sections is in accordance
with the facts and does not omit anything likely to affect the import
of that information.
3
<PAGE>
o Deutsche Bank AG, Sydney Branch, accepts responsibility for the
information contained in "Description of the Class A Notes -- The
Interest Rate Swaps -- Standby Swap Providers". To the best of the
knowledge and belief of Deutsche Bank AG, Sydney Branch, which has
taken all reasonable care to ensure that such is the case, the
information contained in that section is in accordance with the facts
and does not omit anything likely to affect the import of that
information.
o Bankers Trust Corporation, New York, accepts responsibility for the
information contained in "Description of the Class A Notes -- The
Currency Swap -- Currency Swap Provider". To the best of the knowledge
and belief of Bankers Trust Corporation, which has taken all
reasonable care to ensure that such is the case, the information
contained in that section is in accordance with the facts and does not
omit anything likely to affect the import of that information.
None of St.George Bank Limited, in its individual capacity and as seller,
servicer, fixed-floating rate swap provider and basis swap provider, National
Mutual Life Nominees Limited, as security trustee, HSBC Bank USA, as note
trustee, St.George Custodial Pty Limited, as custodian, Deutsche Bank AG, Sydney
Branch, as standby fixed-floating rate swap provider and standby basis swap
provider, Bankers Trust Corporation, New York, as currency swap provider or
Housing Loans Insurance Corporation Pty Limited as mortgage insurer accept any
responsibility for any information contained in this prospectus and have not
separately verified the information contained in this prospectus and make no
representation, warranty or undertaking, express or implied, as to the accuracy
or completeness of any information contained in this prospectus or any other
information supplied in connection with the notes except with respect to the
information for which they accept responsibility in the preceding four
paragraphs.
Except as described in the preceding five paragraphs, St.George Bank
Limited, in its individual capacity and as seller, servicer, fixed-floating rate
swap provider and basis swap provider, AXA Trustees Limited, in its personal
capacity and as trustee, Crusade Management Limited, as manager, National Mutual
Life Nominees Limited, as security trustee, HSBC Bank USA, as note trustee,
St.George Custodial Pty Limited, as custodian, Deutsche Bank AG, Sydney Branch,
as standby fixed-floating rate swap provider and standby basis swap provider,
Bankers Trust Corporation, New York, as currency swap provider, Housing Loans
Insurance Corporation Pty Limited and the underwriters do not recommend that any
person should purchase any of the notes and do not accept any responsibility or
make any representation as to the tax consequences of investing in the notes.
Each person receiving this prospectus acknowledges that he or she has not
relied on the entities listed in the preceding paragraph nor on any person
affiliated with any of them in connection with his or her investigation of the
accuracy of the information in this prospectus or his or her investment
decisions; acknowledges that this prospectus and any other information supplied
in connection with the notes is not intended to provide the basis of any credit
or other evaluation; acknowledges that the underwriters have expressly not
undertaken to review the financial condition or
4
<PAGE>
affairs of the trust or any party named in the prospectus during the life of
the notes; should make his or her own independent investigation of the trust
and the notes; and should seek its own tax, accounting and legal advice as to
the consequences of investing in any of the notes.
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 notes. If such information or representation is
given or received, it must not be relied upon as having been authorized by AXA
Trustees Limited or any of the underwriters.
Neither the delivery of this prospectus nor any sale made in connection
with this prospectus shall, under any circumstances, create any implication
that:
o there has been no material change in the affairs of the trust or any
party named in this prospectus since the date of this prospectus or
the date upon which this prospectus has been most recently amended or
supplemented; or
o any other information supplied in connection with the 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.
AXA Trustees Limited's liability to make payments of interest and
principal on the Class A notes is limited to its right of indemnity from the
assets of the trust. All claims against AXA Trustees Limited in relation to the
Class A notes may only be satisfied out of the assets of the trust and are
limited in recourse to the assets of the trust.
None of the rating agencies have been involved in the preparation of this
prospectus.
5
<PAGE>
AUSTRALIAN DISCLAIMERS
o The notes do not represent deposits or other liabilities of St.George
Bank Limited or associates of St.George Bank Limited.
o The holding of the notes is subject to investment risk, including
possible delays in repayment and loss of income and principal
invested.
o Neither St.George Bank Limited, any associate of St.George Bank
Limited, AXA Trustees Limited, National Mutual Life Nominees Limited,
HSBC Bank USA, as note trustee, nor any underwriter in any way stands
behind the capital value or the performance of the notes or the assets
of the trust except to the limited extent provided in the transaction
documents for the trust.
o None of St.George Bank Limited, in its individual capacity and as
seller, servicer, basis swap provider and fixed-floating rate swap
provider, AXA Trustees Limited, Crusade Management Limited, as
manager, National Mutual Life Nominees Limited, as security trustee,
HSBC Bank USA, as note trustee, St.George Custodial Pty Limited, as
custodian, Deutsche Bank AG, Sydney Branch, as standby fixed-floating
rate swap provider and standby basis swap provider, Bankers Trust
Corporation, New York, as currency swap provider or any of the
underwriters guarantees the payment of interest or the repayment of
principal due on the notes.
o None of the obligations of AXA Trustees Limited, in its capacity as
trustee of the trust, or Crusade Management Limited, as manager, are
guaranteed in any way by St.George Bank Limited or any associate of
St.George Bank Limited or by AXA Trustees Limited or any associate of
AXA Trustees Limited.
6
<PAGE>
SUMMARY
This summary highlights selected information from this document and does
not contain all of the information that you need to consider in making your
investment decision. This summary contains an overview of some of the concepts
and other information to aid your understanding. All of the information
contained in this summary is qualified by the more detailed explanations in
other parts of this prospectus.
PARTIES TO THE TRANSACTION
TRUST:.................. Crusade Global Trust No.1 of 2000
ISSUER TRUSTEE:......... AXA Trustees Limited (ACN 004 029 841), in its
capacity as trustee of the Trust
MANAGER:................ Crusade Management Limited (ACN 072 715 916), 4-16
Montgomery Street, Kogarah NSW 2217 612-9320-5605
NOTE TRUSTEE:........... HSBC Bank USA
SECURITY TRUSTEE:....... National Mutual Life Nominees Limited (ACN 004 387
133)
SELLER:................. St.George Bank Limited (ACN 055 513 070)
SERVICER:............... St.George Bank Limited
CUSTODIAN:.............. St.George Custodial Pty Limited (ACN 003 017 411)
PRINCIPAL PAYING
AGENT:.................. HSBC Bank USA
CALCULATION AGENT:...... HSBC Bank USA
RESIDUAL BENEFICIARY:... Crusade Management Limited
UNDERWRITERS:........... Credit Suisse First Boston Corporation
Deutsche Bank Securities Inc.
LISTING AGENT:.......... Credit Suisse First Boston (Europe) Limited
REDRAW FACILITY
PROVIDER:............... St.George Bank Limited
MORTGAGE INSURER:....... Housing Loans Insurance Corporation Pty Limited
(ACN 071 466 334)
FIXED-FLOATING RATE
SWAP PROVIDER:.......... St.George Bank Limited
STANDBY FIXED-FLOATING RATE
SWAP PROVIDER:.......... Deutsche Bank AG, Sydney Branch
BASIS SWAP PROVIDER:.... St.George Bank Limited
STANDBY BASIS SWAP
PROVIDER:............... Deutsche Bank AG, Sydney Branch
CURRENCY SWAP
PROVIDER:................ Bankers Trust Corporation, New York
RATING AGENCIES:........ Fitch IBCA (Australia) Pty Limited
Moody's Investors Service, Inc.
Standard & Poor's Ratings Group
7
<PAGE>
STRUCTURAL DIAGRAM
SELLER
St.George Bank Limited
Payments from the Equitable assignment
housing loans of housing loans
ISSUER TRUSTEE
AXA Trustees Limited
Crusade Global Trust No. 1 of 2000
MANAGER
Crusade Management
Limited
SERVICER
St.George Bank
Limited
CUSTODIAN
St.George Custodial
Pty Limited
REDRAW FACILITY
PROVIDER
St.George Bank
Limited
FIXED-FLOATING
RATE SWAP
PROVIDER
St.George Bank Limited
STANDBY FIXED-
FLOATING RATE
SWAP PROVIDER
Deutsche Bank AG,
Sydney Branch
BASIS SWAP
PROVIDER
St.George Bank Limited
STANDBY BASIS
SWAP PROVIDER
Deutsche Bank AG,
Sydney Branch
Payment on the
Class A notes
CURRENCY SWAP
PROVIDER
Bankers Trust
Corporation, New York
PRINCIPAL PAYING
AGENT
HSBC Bank USA
THE DEPOSITORY
TRUST COMPANY
CLEARING SYSTEM
Class A noteholders
First ranking floating
charge over the
assets of the trust
Payments from
Mortgage
Insurance Policies
SECURITY TRUSTEE
National Mutual Life
Nominees Limited
MORTGAGE INSURER
Housing Loan Insurance
Corporation Pty Limited
RESIDUAL BENEFICIARY
Crusade Management
Limited
<PAGE>
Payments on the
Class B notes
Class B noteholders
Class A notes
NOTE TRUSTEE
HSBC Bank USA
8
<PAGE>
SUMMARY OF THE NOTES
The issuer trustee will also issue Class B notes collateralized by the
same pool of housing loans. The Class B notes have not been registered in the
United States and are not being offered by this prospectus. The term "notes"
will mean the Class A notes and the Class B notes when used in this prospectus.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
CLASS A-1 CLASS A-2 CLASS A-3 CLASS B
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Initial Principal
Balance US$[ ] US$[ ] US$[ ] A$[ ]
- --------------------------------------------------------------------------------------------------------------------
% of Total: [ %] [ %] [ %] [ %]
- --------------------------------------------------------------------------------------------------------------------
Anticipated Ratings:
Fitch IBCA
(Australia) Pty
Limited [ ] [ ] [ ] [ ]
Moody's Investors
Service, Inc. [ ] [ ] [ ] [ ]
Standard & Poor's
Ratings Group [ ] [ ] [ ] [ ]
- --------------------------------------------------------------------------------------------------------------------
Interest Rate up to three-month three-month three-month three-month
and including the LIBOR + [ %] LIBOR + [ %] LIBOR + [ %] Australian bank bill
quarterly payment rate plus a margin
due in [ ]
- --------------------------------------------------------------------------------------------------------------------
Interest Rate after three-month three-month three-month three-month
the quarterly LIBOR + [ %] LIBOR + [ %] LIBOR + [ %] Australian bank bill
payment due in rate plus a margin
[ ]
- --------------------------------------------------------------------------------------------------------------------
Interest Accrual actual/360 actual/365
Method:
- --------------------------------------------------------------------------------------------------------------------
Quarterly Payment 20th day or, if the 20th day is not a business day, then the next business day, unless
Dates: that business day falls in the next calendar month, in which case the quarterly payment
date will be the preceding business day, of each of March, June, September and
December, beginning in June, 2000
- --------------------------------------------------------------------------------------------------------------------
Final Scheduled The quarterly The quarterly The quarterly The quarterly
Quarterly Payment payment date falling payment date falling payment date falling payment date falling
Date* in [ ] in [ ] in [ ] in [ ]
- --------------------------------------------------------------------------------------------------------------------
Clearance/ DTC/Euroclear/Clearstream, Luxembourg Offered in Australia
Settlement: only
- --------------------------------------------------------------------------------------------------------------------
Cut-Off Date: Close of business, [ ]
- --------------------------------------------------------------------------------------------------------------------
Pricing Date: [ ]
- --------------------------------------------------------------------------------------------------------------------
Closing Date: On or about [ ]
- --------------------------------------------------------------------------------------------------------------------
Final Maturity Date: The quarterly payment date falling in [ ]
- --------------------------------------------------------------------------------------------------------------------
* Assuming that there are no prepayments on the housing loans, that the issuer trustee is not directed to exercise
its right of optional redemption of the notes and the other modeling assumptions contained in "Prepayment and
Yield Considerations" occur.
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
9
<PAGE>
STRUCTURAL OVERVIEW
St.George Bank established the Crusade Global Trust Programme pursuant
to a master trust deed dated March 14, 1998 among St.George Bank, Crusade
Management Limited and the issuer trustee. The master trust deed provides the
general terms and structure for securitizations under the program. A
supplementary terms notice among the issuer trustee, St.George Bank, as seller
and servicer, Crusade Management Limited, as manager, St.George Custodial Pty
Limited, as custodian, HSBC Bank USA, as note trustee, and National Mutual Life
Nominees Limited, as security trustee, will set out the specific details of the
Crusade Global Trust No. 1 of 2000 and the notes, which may vary from the terms
set forth in the master trust deed. Each securitization under the program is a
separate transaction with a separate trust. The assets of the Crusade Global
Trust No. 1 of 2000 will not be available to pay the obligations of any other
trust, and the assets of other trusts will not be available to pay the
obligations of the Crusade Global Trust No. 1 of 2000. See "Description of the
Trust."
The Crusade Global Trust No. 1 of 2000 involves the securitization of
housing loans originated by St.George Bank or its predecessors and secured by
mortgages over residential property located in Australia. St.George Bank will
equitably assign the housing loans to the trust, which will in turn issue the
floating rate notes to fund the acquisition of the housing loans.
The issuer trustee will grant a first ranking floating charge over all
of the assets of the trust under the security trust deed in favor of National
Mutual Life Nominees Limited, as security trustee, to secure the trust's
payment obligations to the noteholders and its other creditors. A first ranking
floating charge is a first priority security interest over a class of assets,
but does not attach to specific assets unless or until it crystalizes, which
means it becomes a fixed charge. The charge will crystalize if, among other
events, an event of default occurs under the security trust deed. Once the
floating charge crystalizes, the issuer trustee will no longer be able to
dispose of or create interests in the assets of the trust without the consent
of the security trustee. For a description of floating charges and
crystalization see "The Security Trust Deed -- Nature of the Charge".
Payments of interest and principal on the notes will come only from the
housing loans and other assets of the trust. The assets of the parties to the
transaction are not available to meet the payments of interest and principal on
the notes. If there are losses on the housing loans, the trust may not have
sufficient assets to repay the notes.
CREDIT ENHANCEMENTS
Payments of interest and principal on the Class A notes will be
supported by the following forms of credit enhancement.
SUBORDINATION AND ALLOCATION OF LOSSES
The Class B notes will always be subordinated to the Class A-1, A-2 and
A-3 notes in their right to receive interest and principal payments. The Class
B notes will bear all losses on the housing loans before the Class A-1, A-2 and
A-3 notes. Any losses allocated to the Class A notes will be allocated pro rata
between the Class A-1, A-2 and A-3 notes. The support provided by the
10
<PAGE>
Class B notes is intended to enhance the likelihood that the Class A-1, A-2 and
A-3 notes will receive expected quarterly payments of interest and principal.
The following chart describes the initial support provided by the Class B
notes:
<TABLE>
<CAPTION>
INITIAL
CREDIT SUPPORT
CLASS(ES) SUPPORT PERCENTAGE
- ------------------ --------- -----------
<S> <C> <C>
A-1, A-2 and A-3 B [ ]%
</TABLE>
The initial support percentage in the preceding table is the initial
balance of the Class B notes, as a percentage of the housing loan pool balance
as of the cut-off date.
MORTGAGE INSURANCE POLICIES
Mortgage insurance policies issued by Housing Loans Insurance
Corporation Pty Limited will provide full coverage for all principal due on
each of the housing loans. The mortgage insurance policies will also guarantee
timely receipt of interest and principal payments for a maximum of twenty-four
months in the aggregate for each of the housing loans.
EXCESS INTEREST COLLECTIONS
Any interest collections on the housing loans remaining after payments
of interest on the notes and the trust's expenses will be available to cover
any losses on the housing loans that are not covered by the mortgage insurance
policies.
LIQUIDITY ENHANCEMENTS
To cover possible liquidity shortfalls in the payment obligations of
the trust, the issuer trustee will have the following forms of liquidity
enhancements.
PRINCIPAL DRAWS
The manager must direct the issuer trustee to allocate principal
collections on the housing loans to cover any shortfalls in the interest
payment obligations of the trust on a payment date.
LIQUIDITY RESERVE
At the closing date, A$[ ], representing [0.25%] of the initial
outstanding principal balance of the notes, will be deposited into a liquidity
account. The issuer trustee, if directed by the manager, will use the money in
the liquidity account to cover any shortfalls in its payment obligations on any
monthly or quarterly payment date which are not covered by principal draws. The
liquidity reserve amount will be reduced from time to time so that it will
equal [0.25%] of the aggregate principal amount outstanding of the housing
loans. Any amounts in the liquidity account in excess of the liquidity reserve
amount will be withdrawn from the liquidity account and treated as a principal
collection.
TIMELY PAYMENT COVER
The mortgage insurance policies guarantee the timely payment of
interest and principal for a maximum of twenty-four months in the aggregate for
each of the housing loans.
REDRAWS
Under the terms of each variable rate housing loan, a borrower may, at
the discretion of St.George Bank, redraw previously prepaid principal. A
borrower may redraw an amount equal to the difference between the scheduled
principal balance of his or her loan and the current principal balance of the
loan. St.George Bank will be reimbursed for any redraws it advances to
borrowers from principal collections
11
<PAGE>
on the housing loans. Thus, the trust will have less funds available to pay
principal to the notes on the next quarterly payment date, but will have a
corresponding greater amount of assets with which to make future payments. The
amount that St.George Bank may advance to a borrower in respect of a particular
housing loan from time to time is limited to approximately the amount of
principal that has been prepaid on that loan at that time. See "St.George
Residential Loan Program" and "Description of theTransaction Documents -- The
Redraw Facility".
LIMITED SUBSTITUTION
At the direction of the manager, the issuer trustee must use the
proceeds from the repurchase of a housing loan by the seller because of a
breach of a representation or warranty to purchase an eligible substitute
housing loan for inclusion in the assets of the trust, if available.
HEDGING ARRANGEMENTS
To hedge its interest rate and currency exposures, the issuer trustee
will enter into the following hedge arrangements:
o a basis swap to hedge the basis risk between the interest rate on
the housing loans which are subject to a discretionary variable
rate of interest and the floating rate obligations of the trust,
which includes the issuer trustee's payments under the currency
swap.
o a fixed-floating rate swap to hedge the basis risk between the
interest rate on the housing loans which are subject to a fixed
rate of interest and the floating rate obligations of the trust,
which includes the issuer trustee's payments under the currency
swap.
o a currency swap to hedge the currency risk between the
collections on the housing loans and the amounts received by the
issuer trustee under the basis swap and the fixed-floating rate
swap, which are denominated in Australian dollars, and the
obligation of the trust to pay interest and principal on the
Class A notes, which are denominated in U.S. dollars.
OPTIONAL REDEMPTION
The issuer trustee will, if the manager directs it to do so, redeem all
of the notes on the earlier of the quarterly payment date falling in [ ] or
the quarterly payment date when the current total outstanding principal balance
of the notes, as reduced by principal losses allocated against the notes, is
less than [10%] of the total initial principal balance of the notes. If the
issuer trustee redeems the notes, the noteholders will receive a payment equal
to the outstanding principal balance of the notes plus accrued interest, unless
the noteholders consent to receiving the outstanding principal balance of the
notes, as reduced by losses allocated against the notes, plus accrued interest
on the outstanding principal balance of the notes.
12
<PAGE>
THE HOUSING LOAN POOL
The housing loan pool will consist of fixed rate and variable rate
residential housing loans secured by mortgages on owner occupied and non-owner
occupied one-to-four family residential properties. The housing loans will have
original terms to stated maturity of no more than 30 years. The pool of housing
loans has the following characteristics:
SELECTED HOUSING LOAN POOL DATA AS OF THE
CLOSE OF BUSINESS ON [ ]
<TABLE>
<S> <C>
Number of Housing Loans ....................................... [ ]
Housing Loan Pool Size ...................................... A$[ ]
Average Housing Loan Balance ................................ A$[ ]
Maximum Housing Loan Balance ................................ A$[ ]
Minimum Housing Loan Balance ................................ A$[ ]
Total Valuation of the Properties ........................... A$[ ]
Maximum Remaining Term to Maturity in months .................. [ ]
Weighted Average Remaining Term to Maturity in months ......... [ ]
Weighted Average Seasoning in months .......................... [ ]
Weighted Average Original Loan-to-Value Ratio ................ [ ]%
Weighted Average Current Loan-to-Value Ratio ................. [ ]%
Maximum Current Loan-to-Value Ratio .......................... [ ]%
</TABLE>
The original loan-to-value ratio of a housing loan is calculated by
comparing the initial principal amount of the housing loan to the most recent
valuation of the property that is currently securing the housing loan. Thus, if
collateral has been released from the mortgage securing a housing loan or if
the property securing the housing loan has been revalued, the original
loan-to-value ratio may not reflect the actual loan-to-value ratio at the
origination of that housing loan.
Before the issuance of the notes, housing loans may be added to or removed
from the housing loan pool. New housing loans may also be substituted for
housing loans that are removed from the housing loan pool. This addition,
removal or substitution of housing loans may result in changes in the housing
loan pool characteristics shown in the preceding table and could affect the
weighted average lives and yields of the notes. The seller will not add, remove
or substitute any housing loans prior to the closing date if this would result
in a change of more than 5% in any of the characteristics of the pool of
housing loans described in this prospectus, unless a revised prospectus is
delivered to prospective investors.
13
<PAGE>
WITHHOLDING TAX
Payments of principal and interest on the Class A notes will be reduced
by any applicable withholding taxes. The issuer trustee is not obligated to pay
any additional amounts to the Class A noteholders to cover any withholding
taxes.
If the Commonwealth of Australia requires the withholding of amounts
from payment of principal or interest to the Class A noteholders or if the
issuer trustee ceases to receive the total amount of interest payable by
borrowers on the housing loans due to taxes, duties, assessments or other
governmental charges the manager may direct the issuer trustee to redeem all of
the notes. However, Class A noteholders owning 75% of the aggregate outstanding
principal balance of the Class A notes may direct the issuer trustee not to
redeem the Class A notes. See "Description of the Class A Notes -- Redemption
of the Notes for Taxation or Other Reasons."
U.S. TAX STATUS
In the opinion of Mayer, Brown & Platt, special tax counsel for the
manager, the Class A notes will be characterized as debt for U.S. federal
income tax purposes. Each Class A noteholder, by acceptance of a Class A note,
agrees to treat the notes as indebtedness. See "United States Federal Income
Tax Matters."
LEGAL INVESTMENT
The Class A notes will not constitute "mortgage-related securities" for
the purposes of the Secondary Mortgage Market Enhancement Act of 1984. No
representation is made as to whether the 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 regulatory authorities. You are urged to consult with your own
legal advisors concerning the status of the Class A notes as legal investments
for you. See "Legal Investment Considerations".
ERISA CONSIDERATIONS
In general, the Class A notes will be eligible for purchase by
retirement plans subject to the Employee Retirement Income Security Act.
Investors should consult their counsel with respect to the consequences under
the Employee Retirement Income Security Act and the Internal Revenue Code of
the plan's acquisition and ownership of the certificates.
BOOK-ENTRY REGISTRATION
Persons acquiring beneficial ownership interests in the Class A notes
will hold their Class A notes through the Depository Trust Company in the United
States or Clearstream, Luxembourg or Euroclear outside of the United States.
Transfers within the Depository Trust Company, Clearstream, Luxembourg or
Euroclear will be in accordance with the usual rules and operating procedures of
the relevant system. Crossmarket transfers between persons holding directly or
indirectly through the Depository Trust Company, on the one hand, and persons
holding directly or indirectly through Clearstream, Luxembourg or Euroclear, on
the other hand, will take place in the Depository Trust Company through the
relevant depositories of Clearstream, Luxembourg or Euroclear.
14
<PAGE>
COLLECTIONS
The issuer trustee will receive for each monthly and quarterly
collection period the following amounts, which are known as collections:
o payments of interest, principal and fees and prepayments of
principal under the housing loans;
o proceeds from the enforcement of the housing loans and registered
mortgages relating to those housing loans;
o amounts received under mortgage insurance policies;
o amounts received from the seller, servicer or custodian for
breaches of representations or undertakings; and
o interest on amounts in the collection account.
Collections will be allocated between income and principal. Collections
attributable to interest, less some amounts, are known as available income. The
collections attributable to principal, less some amounts, are known as gross
principal collections.
Available income is normally used to pay fees, expenses and interest on
the notes. Gross principal collections are normally used to pay principal on
the notes. However, if there is not enough available income to pay fees,
expenses and interest on the notes, gross principal collections will be treated
as income and applied in the income stream to pay unpaid fees, expenses and
interest on the notes. If there is an excess of available income after payment
of fees, expenses and interest on the notes, the excess income will be used to
reimburse any principal charge offs on the notes.
INTEREST ON THE NOTES
Interest on the notes is payable quarterly in arrears on each quarterly
payment date. Interest will be paid proportionately between the Class A-1,
Class A-2 and Class A-3 notes. Interest will be paid on the Class B notes only
after the payments of interest on the Class A-1, Class A-2 and Class A-3 notes
are made. Interest on each class of notes is calculated for each interest
period as follows:
o at the note's interest rate;
o on the outstanding principal balance of that note at the
beginning of that interest period; and
o on the basis of the actual number of days in that interest period
and a year of 360 days, or 365 days for the Class B notes.
PRINCIPAL ON THE NOTES
Principal on the notes will be payable on each quarterly payment date.
Principal will be paid sequentially on each class of notes. Thus, principal
will be paid first on the Class A-1 notes. Principal will only be paid on the
Class A-2 notes after the Class A-1 notes have been repaid in full, and will
only be paid on the Class A-3 notes after the Class A-1 and Class A-2 notes
have been repaid in full. The ClassB notes will not receive any principal
payments until all of the Class A notes have been repaid in full. On each
quarterly payment date, the outstanding principal balance of each note will be
reduced by the amount of the principal payment made on that date on that note.
The outstanding principal balance of each note will also be reduced by the
amount
15
<PAGE>
of principal losses on the housing loans allocated to that note. If the
security trust deed is enforced after an event of default, the proceeds from
the enforcement will be distributed pro rata among all of the Class A notes,
and prior to any distributions to the Class B notes.
ALLOCATION OF CASH FLOWS
On each quarterly payment date, the issuer trustee will repay principal
and interest to each noteholder to the extent that there are collections
received for those payments on that date. The charts on the next two pages
summarize the flow of payments.
16
<PAGE>
DISTRIBUTION OF TOTAL AVAILABLE FUNDS ON A PAYMENT DATE
TOTAL AVAILABLE FUNDS = AVAILABLE INCOME + PRINCIPAL DRAWS + LIQUIDITY DRAWS
Pay to St.George Bank the Accrued
Interest Adjustment
Repay the mortgage insurer any
timely cover payments relating to
interest
On monthly payment dates
(other than quarterly payment dates)
Pay interest owed under the redraw
facility
Repay any outstanding liquidity
draws
On quarterly payment dates
Pay the fixed-floating rate swap provider any
break fees received from borrowers or the
mortgage insurer
Pay Trust Expenses
Pay pro rata between themselves
o fees under the redraw facility
o fees under the basis swap
o fees under the fixed-floating rate swap
Pay any unpaid amounts from previous
quarterly payment dates (other than
amounts owed to the currency swap
provider)
Pay to the mortgage insurer the greater of:
o zero
o the difference between any unreimbursed
overpayments by the mortgage insurer
relating to interest and the aggregate of
amounts distributed to the beneficiary
Pay pro rata between themselves:
o interest under redraw facility
o payments under the basis swap or the fixed-
floating rate swap
o any outstanding liquidity draws
o payments under the currency swap relating to
interest on the Class A notes
Pay any unpaid amounts owing to the currency
swap provider from previous quarterly
payment dates
Pay interest on the Class B notes
Apply any Excess Available Income to reimburse in
the following order:
o principal charge offs
o pro rata, Carry Over Class A Charge Offs and
Redraw Charge Offs
o Carry Over Class B Charge Offs
Repay to the mortgage insurer any unreimbursed
overpayments by the mortgage insurer relating
to interest
Distribute any remaining amounts to the
residual beneficiary
17
<PAGE>
DISTRIBUTION OF PRINCIPAL COLLECTIONS ON A PAYMENT DATE
PRINCIPAL COLLECTIONS = GROSS PRINCIPAL COLLECTIONS - REIMBURSEMENT OF REDRAWS -
ANY AMOUNT PAID BY THE ISSUER TRUSTEE TO PURCHASE A SUBSTITUTE HOUSING LOAN
Repay the mortgage insurer for any timely cover payments relating to
principal
Allocate any required principal draw to Total Available Funds
Retain in the collection account funds to cover any anticipated shortfalls
On monthly payment dates
(other than quarterly
payment dates)
Repay any principal outstanding under
the redraw facility
On quarterly payment dates
Repay the seller for any redraws it has
funded
Repay any principal outstanding under the
redraw facility
Retain the Redraw Retention Amount in
the collection account
Pay to the currency swap provider principal
to be paid on the Class A-1 notes
Pay to the currency swap provider principal
to be paid on the Class A-2 notes
Pay to the currency swap provider principal
to be paid on the Class A-3 notes
Pay principal on the Class B notes
18
<PAGE>
RISK FACTORS
The Class A notes are complex securities issued by a foreign entity and
secured by property located in a foreign jurisdiction. You should consider the
following risk factors in deciding whether to purchase the Class A notes.
<TABLE>
<CAPTION>
<S> <C>
THE NOTES WILL BE PAID ONLY FROM o The notes are debt obligations of the issuer trustee
THE ASSETS OF THE TRUST only in its capacity as trustee of the trust. The notes
do not represent an interest in or obligation of any of
the other parties to the transaction. The assets of the
trust will be the sole source of payments on the notes.
The issuer trustee's other assets will only be
available to make payments on the notes if the issuer
trustee is negligent, commits fraud or in some
circumstances where the issuer trustee fails to comply
with an obligation expressly imposed upon it under the
documents or a written direction from the manager.
Therefore, if the assets of the trust are insufficient
to pay the interest and principal on your notes when
due, there will be no other source from which to
receive these payments and you may not get back your
entire investment or the yield you expected to receive.
YOU FACE AN ADDITIONAL o Although St.George Bank could have legally assigned the
POSSIBILITY OF LOSS BECAUSE THE title to the housing loans to the issuer trustee,
ISSUER TRUSTEE DOES NOT HOLD LEGAL initially it will assign only equitable title to the
TITLE TO THE HOUSING LOANS housing loans to the issuer trustee. The housing loans
will be legally assigned to the issuer trustee only
upon the occurrence of a title perfection event, as
described in "Description of the Assets of the Trust --
Transfer and Assignment of the Housing Loans." Because
the issuer trustee does not hold legal title to the
housing loans you will be subject to the following
risks, which may lead to a failure to receive
collections on the housing loans, delays in receiving
the collections or losses to you:
19
<PAGE>
<CAPTION>
<S> <C>
o The issuer trustee's interest in a housing loan may be
impaired by the creation or existence of an equal or
higher ranking security interest over the related
mortgaged property created after the creation of the
issuer trustee's equitable interest but prior to it
acquiring a legal interest in the housing loans.
o Until a borrower has notice of the assignment, that
borrower is not bound to make payments under its
housing loan to anyone other than the seller. Until a
borrower receives notice of the assignment, any
payments the borrower makes under his or her housing
loan to the seller will validly discharge the
borrower's obligations under the borrower's housing
loan even if the issuer trustee does not receive the
payments from the seller. Therefore, if the seller does
not deliver collections to the issuer trustee, for
whatever reason, neither the issuer trustee nor you
will have any recourse against the related borrowers
for such collections.
o The issuer trustee may not be able to initiate any
legal proceedings against a borrower to enforce a
housing loan without the involvement of the seller.
THE SELLER AND SERVICER MAY o Before the seller or the servicer remits collections to
COMMINGLE COLLECTIONS ON THE the collection account, the collections may be
HOUSING LOANS WITH THEIR ASSETS commingled with the assets of the seller or servicer.
If the seller or the servicer becomes insolvent, the
issuer trustee may only be able to claim those
collections as an unsecured creditor of the insolvent
company. This could lead to a failure to receive the
collections on the housing loans, delays in receiving
the collections, or losses to you.
20
<PAGE>
<CAPTION>
<S> <C>
THERE IS NO WAY TO PREDICT THE o The rate of principal and interest on pools of housing
payments ACTUAL RATE AND TIMING OF loans varies among pools, and is influenced by a
PAYMENTS ON THE HOUSING LOANS variety of economic, demographic, social, tax, legal and
other factors, including prevailing market interest rates
for housing loans and the particular terms of the housing
loans. Australian housing loans have features and options
that are different from housing loans in the United States,
and thus will have different rates and timing of payments
from housing loans in the United States. There is no
guarantee as to the actual rate of prepayment on the housing
loans, or that the actual rate of prepayments will conform
to any model described in this prospectus. The rate and
timing of principal and interest payments on the housing
loans will affect the rate and timing of payments of
principal and interest on your notes. Unexpected prepayment
rates could have the following negative effects:
o If you bought your notes for more than their face
amount, the yield on your notes will drop if principal
payments occur at a faster rate than you expect.
o If you bought your notes for less than their face
amount, the yield on your notes will drop if principal
payments occur at a slower rate than you expect.
LOSSES AND DELINQUENT o If borrowers fail to make payments of interest and
PAYMENTS ON THE HOUSING LOANS principal under the housing loans when due and the
MAY AFFECT THE RETURN ON YOUR credit enhancement described in this prospectus is not
NOTES enough to protect your notes from the borrowers'
failure to pay, then the issuer trustee may not have
enough funds to make full payments of interest and
principal due on your notes. Consequently, the yield on
your notes could be lower than you expect and you could
suffer losses.
21
<PAGE>
<CAPTION>
<S> <C>
ENFORCEMENT OF THE HOUSING o Substantial delays could be encountered in connection
LOANS MAY CAUSE DELAYS IN with the liquidation of a housing loan, which may
PAYMENT AND LOSSES lead to shortfalls in payments to you to the extent those
shortfalls are not covered by a mortgage insurance policy.
o If the proceeds of the sale of a mortgaged property,
net of preservation and liquidation expenses, are less
than the amount due under the related housing loan, the
issuer trustee may not have enough funds to make full
payments of interest and principal due to you, unless
the difference is covered under a mortgage insurance
policy.
THE CLASS B NOTES PROVIDE ONLY o The amount of credit enhancement provided through the
LIMITED PROTECTION AGAINST LOSSES subordination of the Class B notes to the Class A notes
is limited and could be depleted prior to the payment
in full of the Class A notes. If the principal amount
of the Class B notes is reduced to zero, you may suffer
losses on your notes.
THE MORTGAGE INSURANCE POLICIES o The mortgage insurance policies are subject to some
MAY NOT BE AVAILABLE TO COVER exclusions from coverage and rights of termination
LOSSES ON THE HOUSING LOANS which are described in "The Mortgage Insurance Policies
-- Requirements and Restrictions". Therefore, a
borrower's payments that are expected to be covered by
the mortgage insurance policies may not be covered
because of these exclusions, and the issuer trustee may
not have enough money to make timely and full payments
of principal and interest on your notes.
YOU MAY NOT BE ABLE TO RESELL o The underwriters are not required to assist you in
YOUR NOTES reselling your notes. A secondary market for your notes
may not develop. If a secondary market does develop, it
might not continue or might not be sufficiently liquid
to allow you to resell any of your notes readily or at
the price you desire. The
22
<PAGE>
<CAPTION>
<S> <C>
market value of your notes is likely to fluctuate,
which could result in significant losses to you.
THE TERMINATION OF ANY OF THE o The issuer trustee will exchange the interest payments
SWAPS MAY SUBJECT YOU TO LOSSES from the fixed rate housing loans for variable rate
FROM INTEREST RATE OR CURRENCY payments based upon the three-month Australian bank
FLUCTUATIONS bill rate. If the fixed-floating rate swap is
terminated or the fixed-floating rate swap provider
fails to perform its obligations, you will be exposed
to the risk that the floating rate of interest payable
on the notes will be greater than the discretionary
fixed rate set by the servicer on the fixed rate
housing loans, which may lead to losses to you.
o The issuer trustee will exchange the interest payments
from the variable rate housing loans for variable rate
payments based upon the three-month Australian bank
bill rate. If the basis swap is terminated, the manager
will direct the servicer to set the interest rate on
the variable rate housing loans at a rate high enough
to cover the payments owed by the trust. If the rates
on the variable rate housing loans are set above the
market interest rate for similar variable rate housing
loans, the affected borrowers will have an incentive to
refinance their loans with another institution, which
may lead to higher rates of principal prepayment than
you initially expected, which will affect the yield on
your notes.
o The issuer trustee will receive payments from the
borrowers on the housing loans in Australian dollars
and make payments to you in U.S. dollars. The currency
swap provider will exchange Australian dollars for U.S.
dollars pursuant to the currency swap. If the currency
swap provider fails to perform its obligation or if the
currency swap is terminated, the issuer trustee might
have to exchange its Australian dollars for U.S.
dollars at an exchange
23
<PAGE>
<CAPTION>
<S> <C>
rate that does not provide sufficient U.S. dollars to
make payments to you in full.
PREPAYMENTS DURING A COLLECTION o If a prepayment is received on a housing loan during a
PERIOD MAY RESULT IN YOU NOT collection period, interest on the housing loan will
RECEIVING YOUR FULL INTEREST cease to accrue on that portion of the housing loan
PAYMENTS that has been prepaid, starting on the date of
prepayment. The amount prepaid will be invested in
investments that may earn a rate of interest lower than
that paid on the housing loan. If it is less, the
issuer trustee may not have sufficient funds to pay you
the full amount of interest due to you on the next
quarterly payment date.
PAYMENT HOLIDAYS MAY RESULT IN o If a borrower prepays principal on his or her loan, the
YOU NOT RECEIVING YOUR FULL borrower is not required to make any payments,
INTEREST PAYMENTS including interest payments, until the outstanding
principal balance of the housing loan plus unpaid
interest equals the scheduled principal balance. If a
significant number of borrowers take advantage of this
feature at the same time and the liquidity reserve and
principal draws do not provide enough funds to cover
the interest payments on the housing loans that are not
received, the issuer trustee may not have sufficient
funds to pay you the full amount of interest on the
notes on the next quarterly payment date.
THE PROCEEDS FROM THE o If the security trustee enforces the security interest
ENFORCEMENT OF THE SECURITY TRUST over the assets of the trust after an event of default
DEED MAY BE INSUFFICIENT TO PAY under the security trust deed, there is no assurance
AMOUNTS DUE TO YOU that the market value of the assets of the trust will
be equal to or greater than the outstanding principal
and interest due on the notes, or that the security
trustee will be able to realize the full value of the
assets of the trust. The issuer trustee, the security
trustee, the note trustee, the swap providers and other
service providers will generally be entitled to receive
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<CAPTION>
<S> <C>
the proceeds of any sale of the assets of the trust, to
the extent they are owed fees and expenses, before you.
Consequently, the proceeds from the sale of the assets
of the trust after an event of default under the security
trust deed may be insufficient to pay you principal
and interest in full.
IF THE MANAGER DIRECTS THE ISSUER o If the manager directs the issuer trustee to redeem the
TRUSTEE TO REDEEM THE NOTES notes earlier as described in "Description of the Class
EARLIER, YOU COULD SUFFER LOSSES A Notes -- Optional Redemption of the Notes" and
AND THE YIELD ON YOUR NOTES COULD principal charge offs have occurred, noteholders owning
BE LOWER THAN EXPECTED at least 75% of the aggregate outstanding amount of the
notes may consent to receiving an amount equal to the
outstanding principal amount of the notes, less
principal charge offs, plus accrued interest. As a
result, you may not fully recover your investment. In
addition, the purchase of the housing loans will result
in the early retirement of your notes, which will
shorten their average lives and potentially lower the
yield on your notes.
TERMINATION PAYMENTS RELATING TO o If the issuer trustee is required to make a termination
THE CURRENCY SWAP MAY REDUCE payment to the currency swap provider upon the
PAYMENTS TO YOU termination of the currency swap, the issuer trustee
will make the termination payment from the assets of
the trust and in priority to payments on the notes.
Thus, if the issuer trustee makes a termination
payment, there may not be sufficient funds remaining to
pay interest on your notes on the next quarterly
payment date, and the principal on your notes may not
be repaid in full.
THE IMPOSITION OF A WITHHOLDING o If a withholding tax is imposed on payments of interest
TAX WILL REDUCE PAYMENTS TO YOU on your notes, you will not be entitled to receive
AND MAY LEAD TO AN EARLY grossed-up amounts to compensate for such withholding
REDEMPTION OF THE NOTES tax. Thus, you will receive less interest than is
scheduled to be paid on your notes.
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<CAPTION>
<S> <C>
o If the option to redeem the notes affected by a
withholding tax is exercised, you may not be able to
reinvest the redemption payments at a comparable
interest rate.
ST.GEORGE BANK'S ABILITY TO SET o The interest rates on the variable rate housing loans
THE INTEREST RATE ON VARIABLE RATE are not tied to an objective interest rate index, but
HOUSING LOANS MAY LEAD TO are set at the sole discretion of St.George Bank. If
INCREASED DELINQUENCIES OR St.George Bank increases the interest rates on the
PREPAYMENTS variable rate housing loans, borrowers may be unable to
make their required payments under the housing loans,
and accordingly, may become delinquent or may default
on their payments. In addition, if the interest rates
are raised above market interest rates, borrowers may
refinance their loans with another lender to obtain a
lower interest rate. This could cause higher rates of
principal prepayment than you expected and affect the
yield on your notes.
THE FEATURES OF THE HOUSING LOANS o The features of the housing loans, including their
MAY CHANGE, WHICH COULD AFFECT interest rates, may be changed by St.George Bank,
THE TIMING AND AMOUNT OF either on its own initiative or at a borrower's
PAYMENTS TO YOU request. Some of these changes may include the addition
of newly developed features which are not described in
this prospectus. As a result of these changes and
borrower's payments of principal, the concentration of
housing loans with specific characteristics is likely
to change over time, which may affect the timing and
amount of payments you receive.
o If St.George Bank changes the features of the housing
loans, borrowers may elect to refinance their loan with
another lender to obtain more favorable features. In
addition, the housing loans included in the trust are
not permitted to have some features. If a borrower opts
to add one of these features to his or her housing
loan, the housing loan will be removed from the trust.
The refinancing or removal
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<CAPTION>
<S> <C>
of housing loans could cause you to experience higher
rates of principal prepayment than you expected, which
could affect the yield on your notes.
THERE ARE LIMITS ON THE AMOUNT o If the interest collections during a collection period
OF AVAILABLE LIQUIDITY TO ENSURE are insufficient to cover fees, expenses and the
PAYMENTS OF INTEREST TO YOU interest payments due on the notes on the next payment
date, principal collections collected during the
collection period may be used to cover these amounts.
If principal collections are not sufficient to cover
the shortfall, the issuer trustee will draw funds from
the liquidity account. In the event that there is not
enough money available under the liquidity account, you
may not receive a full payment of interest on that
payment date, which will reduce the yield on your
notes.
THE USE OF PRINCIPAL COLLECTIONS o If principal collections are drawn upon to cover
TO COVER LIQUIDITY SHORTFALLS MAY shortfalls in interest collections, and there is
LEAD TO PRINCIPAL LOSSES insufficient excess interest collections in succeeding
collection periods to repay those principal draws, you
may not receive full repayment of principal on your
notes.
THE USE OF THE LIQUIDITY ACCOUNT o If the issuer trustee draws upon the liquidity account
MAY REDUCE THE AMOUNT OF FUTURE to cover shortfalls in interest collections, interest
INTEREST PAYMENTS TO YOU collections in subsequent collection periods must be
used to repay the liquidity account before interest due
on the notes. This may lead to further shortfalls which
over time could deplete the liquidity account and in
turn may reduce the amount of interest collections
which may be used to make payments to you.
A DECLINE IN AUSTRALIAN ECONOMIC o The Australian economy has been experiencing a
CONDITIONS MAY LEAD TO LOSSES ON prolonged period of expansion with relatively low and
YOUR NOTES stable interest rates and steadily increasing property
values. If the Australian economy were to experience a
downturn, an increase in interest rates, a fall in
property values or any
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<CAPTION>
<S> <C>
combination of these factors, delinquencies or losses
on the housing loans may increase, which may cause
losses on your notes.
CONSUMER PROTECTION LAWS MAY o Some of the borrowers may attempt to make a claim to a
AFFECT THE TIMING OR AMOUNT OF court requesting changes in the terms and conditions of
INTEREST OR PRINCIPAL PAYMENTS TO their housing loans or compensation or penalties from
YOU the seller for breaches of any legislation relating to
consumer credit. Any changes which allow the borrower
to pay less principal or interest under his or her
housing loan may delay or decrease the amount of
payments to you.
o In addition, if the issuer trustee obtains legal title
to the housing loans, the issuer trustee will be
subject to the penalties and compensation provisions of
the applicable consumer protection laws instead of the
seller. To the extent that the issuer trustee is unable
to recover any such liabilities under the consumer
protection laws from the seller, the assets of the
trust will be used to indemnify the issuer trustee
prior to payments to you. This may delay or decrease
the amount of collections available to make payments to
you.
THE CONCENTRATION OF HOUSING o If the trust contains a high concentration of housing
LOANS IN SPECIFIC GEOGRAPHIC AREAS loans secured by properties located within a single
MAY INCREASE THE POSSIBILITY OF state or region within Australia, any deterioration in
LOSS ON YOUR NOTES the real estate values or the economy of any of those
states or regions could result in higher rates of
delinquencies, foreclosures and loss than expected on
the housing loans. In addition, these states or regions
may experience natural disasters, which may not be
fully insured against and which may result in property
damage and losses on the housing loans. These events
may in turn have a disproportionate impact on funds
available to the trust, which could cause you to suffer
losses.
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THE IMPLEMENTATION OF THE NEW o From July 1, 2000, a goods and services tax will be
GOODS AND SERVICES TAX IN payable by all entities which make taxable supplies in
AUSTRALIA IS LIKELY TO DECREASE THE Australia. Some service providers to the issuer
FUNDS AVAILABLE TO THE TRUST TO PAY trustee will be subject to GST in respect of the services
YOU provided and will pass on that additional cost to the issuer
trustee. The issuer trustee may also be subject to GST on
services provided by it. To the extent that it has a net GST
liability, the issuer trustee will have less funds available
to meet its obligations, and you may suffer losses.
YOU WILL NOT RECEIVE PHYSICAL o Your ownership of the notes will be registered
NOTES REPRESENTING YOUR NOTES, electronically through DTC, Euroclear and Clearstream,
WHICH CAN CAUSE DELAYS IN Luxembourg. The lack of physical certificates could:
RECEIVING DISTRIBUTIONS AND
HAMPER YOUR ABILITY TO PLEDGE OR o cause you to experience delays in receiving payments on
RESELL YOUR NOTES the notes because the principal paying agent will be
sending distributions on the notes to DTC instead of
directly to you;
o limit or prevent you from using your notes as
collateral; and
o hinder your ability to resell the notes or reduce the
price that you receive for them.
</TABLE>
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CAPITALIZED TERMS
The capitalized terms used in this prospectus, unless defined elsewhere in
this prospectus, have the meanings set forth in the Glossary starting on page
[ ].
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 in this prospectus, any
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 [ ], 2000. 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.
THE ISSUER TRUSTEE, ST.GEORGE BANK AND THE MANAGER
THE ISSUER TRUSTEE
The issuer trustee was incorporated on July 30, 1887 as National Trustees
Executors and Agency Company Australasia Limited under the Companies Statute
1864 of Victoria as a public company. After name changes in 1987 and 1999, AXA
Trustees Limited now operates as a limited liability public company under the
Corporations Law of Australia, with its registered office at Level 15, 447
Collins Street, Melbourne. AXA Trustees Limited's principal business is the
provision of fiduciary, trustee and other commercial services. AXA Trustees
Limited is an authorized trustee corporation and holds a Securities Dealers
Licence No 16424, both under the Corporations Law of Australia.
[AXA Trustees Limited has issued 31,127,695 shares as of the date of this
prospectus. There are 29,072,305 with a paid amount of A$1.00, 1,500,000 shares
with a paid amount of A$0.10 and 555,390 shares with a paid amount of A$0.50,
giving a total share capital of A$29,500,000. The issuer trustee has not agreed
to issue any additional shares. The shares are all held by National Mutual Life
Nominees Limited (ACN 004 387 133), a member of the AXA group.]
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DIRECTORS
The directors of the issuer trustee are as follows:
<TABLE>
<CAPTION>
NAME BUSINESS ADDRESS PRINCIPAL ACTIVITIES
- -------------------- --------------------------------- -----------------------
<S> <C> <C>
[Gregory Mark 16th Floor, 447 Collins Street, Chief Executive, Funds
Armour Melbourne, Victoria 3000, Management
Australia
Alan Cowan Level 3, 4 Bank Place, Director
Melbourne, Victoria 3000,
Australia
Warren John Lee 9th Floor, 447 Collins Street, National Operations
Melbourne, Victoria 3000, Manager
Australia
Matthew John Walsh Level 28 Rialto, 525 Collins Solicitor
Street, Melbourne, Victoria
3000, Australia
Elaine Henry OAM The Smith Family, 16 Larkin Director
Street, Camperdown, New
South Wales 2050, Australia
</TABLE>
Matthew John Walsh is a partner of Mallesons Stephen Jaques, Melbourne
office.]
ST.GEORGE BANK
St.George Bank commenced operations as a group of building societies in
1937, and converted into a bank, becoming a public company registered in New
South Wales on July 1, 1992. Following a merger with Advance Bank Australia
Limited in January 1997, St.George Bank is the fifth largest banking group in
Australia in terms of total assets, which, at [September 30, 1999], totalled
A$[45.0 billion] with shareholders' equity of A$[3.65 billion]. St.George
Bank's registered office is 4-16 Montgomery Street, Kogarah, New South Wales.
St.George Bank maintains a World Wide Web site at the address
"http://www.stgeorge.com.au".
St.George Bank's primary business is providing retail banking services,
including residential mortgage loans for owner occupied and investment housing
and retail call and term deposits. The Australian banking activities of
St.George Bank come under the regulatory supervision of the Australian
Prudential Regulation Authority. The Reserve Bank of Australia is responsible
for monetary policy and the maintenance of the overall financial system
stability. For a further description of the business operations of St.George
Bank, see "The Servicer."
THE MANAGER
The manager, Crusade Management Limited, is a wholly owned subsidiary of
St.George Bank. Its principal business activity is the management of
securitisation trusts established under St.George Bank's Crusade Trust and
Crusade Euro Trust Programmes. The manager's registered office is Level 4, 4-16
Montgomery Street, Kogarah NSW 2217, Australia.
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DESCRIPTION OF THE TRUST
ST.GEORGE BANK SECURITISATION TRUST PROGRAMME
St.George Bank established its Securitisation Trust Programme pursuant to
a master trust deed for the purpose of enabling AXA Trustees Limited, as
trustee of each trust established pursuant to the Securitisation Trust
Programme, to invest in pools of assets originated or purchased from time to
time by St.George Bank. The master trust deed provides for the creation of an
unlimited number of trusts. The master trust deed establishes the general
framework under which trusts may be established from time to time. It does not
actually establish any trusts. The Crusade Global Trust No. 1 of 2000 is
separate and distinct from any other trust established under the master trust
deed. The assets of the Crusade Global Trust No. 1 of 2000 are not available to
meet the liabilities of any other trust and the assets of any other trust are
not available to meet the liabilities of the Crusade Global Trust No. 1 of
2000.
CRUSADE GLOBAL TRUST NO. 1 OF 2000
The detailed terms of the Crusade Global Trust No. 1 of 2000 will be as
set out in the master trust deed and the supplementary terms notice. To
establish the trust, the manager and the issuer trustee will execute a notice
of creation of trust.
The supplementary terms notice, which supplements the general framework
under the master trust deed with respect to the trust, does the following:
o specifies the details of the notes;
o establishes the cash flow allocation;
o sets out the various representations and undertakings of the parties
specific to the housing loans, which supplement those in the master
trust deed; and
o amends the master trust deed to the extent necessary to give effect to
the specific aspects of the trust and the issue of the notes.
DESCRIPTION OF THE ASSETS OF THE TRUST
ASSETS OF THE TRUST
The assets of the trust will include the following:
o the pool of housing loans, including all:
o principal payments paid or payable on the housing loans at any
time from and after the cut-off date; and
o interest payments paid or payable on the housing loans after the
closing date;
o rights under the mortgage insurance policies issued by Housing Loans
Insurance Corporation Pty Limited and the individual property
insurance policies covering the mortgaged properties relating to the
housing loans;
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o amounts on deposit in the accounts established in connection with the
creation of the trust and the issuance of the notes, including the
collection account, and any instruments in which these amounts are
invested; and
o the issuer trustee's rights under the transaction documents.
THE HOUSING LOANS
The housing loans are secured by registered first ranking mortgages on
properties located in Australia. The housing loans are from St.George Bank's
general residential mortgage product pool and have been originated by St.George
Bank in the ordinary course of its business. Each housing loan will be one of
the types of products described in "St.George Bank Residential Loan Program --
St.George Bank's Product Types." Each housing loan may have some or all of the
features described in the "St.George Bank Residential Loan Program -- Special
Features of the Housing Loans." The housing loans are either fixed rate or
variable rate loans or a combination of both. Each housing loan is secured by a
registered first ranking mortgage over the related mortgaged property or, if the
relevant mortgage is not a first ranking mortgage, the seller will equitably
assign to the issuer trustee all other prior ranking registered mortgages
relating to that housing loan. The mortgaged properties consist of one-to-four
family owner-occupied properties and one-to-four family non-owner occupied
properties, but do not include mobile homes which are not permanently affixed to
the ground, commercial properties or unimproved land.
TRANSFER AND ASSIGNMENT OF THE HOUSING LOANS
On the closing date, the housing loans purchased by the trust will be
specified in a sale notice from St.George Bank, in its capacity as seller of
the housing loans, to the issuer trustee.
The seller will equitably assign the housing loans, the mortgages securing
those housing loans and the mortgage insurance policies and insurance policies
on the mortgaged properties relating to those housing loans to the issuer
trustee pursuant to the sale notice. After this assignment, the issuer trustee
will be entitled to receive collections on the housing loans. If a Title
Perfection Event occurs, the issuer trustee must use the irrevocable power of
attorney granted to it by St.George Bank to take the actions necessary to
obtain legal title to the housing loans.
The seller may in some instances equitably assign a housing loan to the
issuer trustee secured by an "all moneys" mortgage, which may also secure
financial indebtedness that has not been sold to the trust, but is instead
retained by the seller. The issuer trustee will hold the proceeds of
enforcement of the related mortgage, as described in "Legal Aspects of the
Housing Loans -- Enforcement of Registered Mortgages", to the extent they
exceed the amount required to repay the housing loan, as bare trustee without
any other duties or obligations, in relation to that other financial
indebtedness. The mortgage will secure the housing loan equitably assigned to
the trust in priority to that other financial indebtedness. If a housing loan
is secured on the closing date by a first mortgage over one property and a
second mortgage over a second property, the seller will assign to the trust
both the first and
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second mortgages over that second property. The housing loan included in the
trust will then have the benefit of security from both properties ahead of any
financial indebtedness owed to St.George Bank which is secured by the second
property.
REPRESENTATIONS, WARRANTIES AND ELIGIBILITY CRITERIA
The seller will make various representations and warranties to the issuer
trustee as of the closing date, unless another date is specified, with respect
to the housing loans being equitably assigned by it to the issuer trustee,
including that:
o the housing loans are assignable and all consents required for the
assignment have been obtained;
o each housing loan is legally valid, binding and enforceable against
the related borrower(s) in all material respects, except to the extent
that it is affected by laws relating to creditors' rights generally or
doctrines of equity;
o each housing loan is the subject of a mortgage insurance policy;
o each housing loan was originated in the ordinary course of the
seller's business and entered into in compliance in all material
respects with the seller's underwriting and operations procedures, as
agreed upon with the manager;
o at the time each housing loan was entered into and up to and including
the closing date, it complied in all material respects with applicable
laws, including, the Consumer Credit Legislation, if applicable;
o the performance by the seller of its obligations in respect of each
housing loan and related security, including its variation, discharge,
release, administration, servicing and enforcement, up to and
including the closing date, complied in all material respects with
applicable laws including the Consumer Credit Legislation, if
applicable;
o each housing loan is denominated and payable only in Australian
dollars in Australia;
o the loan agreement or terms of the mortgage for each housing loan
includes a clause to the effect that the borrower waives all rights of
set-off as between the borrower and the seller; and
o as of the cut-off date, each housing loan satisfies the following
eligibility criteria:
o it is from the seller's general residential housing loan product pool;
o it is secured by a mortgage which constitutes a first ranking mortgage
over residential owner-occupied or investment land situated in capital
city metropolitan areas or regional centers in Australia, which
mortgage is or will be registered under the relevant law relating to
the registration, priority or effectiveness of any mortgage over land
in any Australian jurisdiction. Where a mortgage is not, or will not
be when registered, a first ranking mortgage, the sale notice includes
an offer from the seller to the issuer trustee of all prior ranking
registered mortgages;
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o it is secured by a mortgage over a property which has erected on it
a residential dwelling and which is required under the terms of the
mortgage to be covered by general insurance by an insurer approved in
accordance with the transaction documents;
o it has a loan-to-value ratio less than or equal to 95% for owner
occupied properties and 90% for non-owner occupied properties;
o it was not purchased by the seller, but was approved and originated
by the seller in the ordinary course of its business;
o the borrower does not owe more than A$500,000 under the housing
loan;
o the borrower is required to repay such loan within 30 years of the
cut-off date;
o no payment from the borrower is in arrears for more than 30
consecutive days;
o the sale of an equitable interest in the housing loan, or the sale
of an equitable interest in any related mortgage or guarantee, does
not contravene or conflict with any law;
o 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;
o it is on fully amortizing repayment terms;
o it is secured by a mortgage that is covered by the mortgage
insurance policy for 100% of amounts outstanding under such loan,
which policy includes a timely payment cover;
o it is fully drawn;
o it complies in all material respects with applicable laws,
including, if applicable, the Consumer Credit Legislation; and
o it is subject to the terms and conditions of St.George Bank's Great
Australian Home Loan product, its standard variable rate loan,
including loans entitled to a "loyalty" rate due to a home loan
relationship with St.George Bank of 5 years or more, or loans that
bear a fixed rate of interest for up to 5 years as of the cut-off
date.
The issuer trustee has not investigated or made any inquiries regarding
the accuracy of these representations and warranties and has no obligation to
do so. The issuer trustee is entitled to rely entirely upon the representations
and warranties being correct, unless an officer involved in the administration
of the trust has actual notice to the contrary.
BREACH OF REPRESENTATIONS AND WARRANTIES
If St.George Bank, the manager or the issuer trustee becomes aware that a
representation or warranty from St.George Bank relating to any housing loan or
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mortgage is incorrect within 120 days after the closing date, it must notify
the other parties and the rating agencies within ten business days. If the
breach is not waived or remedied to the satisfaction of the issuer trustee
within ten business days of the notice then, without any action being required
by either party, St.George Bank shall be obligated to repurchase the affected
housing loan and mortgage for an amount equal to its Unpaid Balance.
Upon payment of the Unpaid Balance, the issuer trustee shall cease to have
any interest in the affected housing loan and mortgage and St.George Bank shall
hold both the legal and beneficial interest in such housing loan and mortgage
and be entitled to all interest and fees that are paid in respect of them from,
and including, the date of repurchase.
If the breach of a representation or warranty is discovered later than 120
days from the closing date, the issuer trustee will only have a claim for
damages which will be limited to an amount equal to the Unpaid Balance of that
housing loan at the time St.George Bank pays the damages.
SUBSTITUTION OF HOUSING LOANS
SELLER SUBSTITUTION
The issuer trustee must, at the manager's direction and option, at any
time replace a housing loan which has been repurchased by the seller following
a breach of representation using the funds received from the repurchase to
purchase a substitute housing loan from the seller. The seller may elect to
sell a substitute housing loan to the issuer trustee, which the issuer trustee
shall acquire if the manager directs it to do so, provided the substitute
housing loan satisfies the following requirements:
o it complies with the eligibility criteria;
o at the time of substitution, the substitute housing loan has a
maturity date no later than the date being 2 years prior to the final
maturity date of the notes;
o the mortgage insurer has confirmed that the substitute housing loan
will be insured under the mortgage insurance policy; and
o the substitution will not adversely affect the rating of the notes.
OTHER SUBSTITUTIONS
The issuer trustee must, at the manager's direction, at any time:
o replace a housing loan;
o allow a borrower to replace the property securing a housing loan; or
o allow a borrower to refinance a housing loan to purchase a new
property, provided all of the following conditions are met:
o the same borrower continues to be the borrower under the new housing
loan;
o either the replacement mortgage or the replacement property does not
result in the related housing loan failing to comply with the
eligibility criteria or the refinanced housing loan satisfies the
eligibility criteria, as the case may be;
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o any such replacement or refinancing occurs simultaneously with the
release of the previous mortgage, property or housing loan, as the
case may be; and
o the principal outstanding under the related housing loan is, after the
replacement or refinancing, the same as before that replacement or
refinancing.
SELECTION CRITERIA
The manager will apply the following criteria, in descending order of
importance, when selecting a substitute housing loan or approving a
substitution:
o the substitute housing loan will have an Unpaid Balance within
A$30,000 of the outgoing housing loan's Unpaid Balance, as determined
at the time of substitution;
o an outgoing housing loan secured by an owner-occupied or non-owner
occupied property will be replaced by another housing loan secured by
an owner-occupied or non-owner occupied property, as the case may be;
o the substitute housing loan will have a current loan-to-value ratio no
more than 5% greater than the outgoing housing loan's current
loan-to-value ratio, as determined at the time of substitution;
o an outgoing housing loan will be replaced by a housing loan with a
mortgage over a property located in the same state or territory;
o an outgoing housing loan will be replaced by a housing loan with a
mortgage over a property with the same or similar postcode; and
o in the case of a selection of substitute housing loan, the substitute
housing loan will have the closest possible original loan amount to
that of the outgoing housing loan.
OTHER FEATURES OF THE HOUSING LOANS
The housing loans have the following features.
o Interest is calculated daily and charged in arrears.
o Payments can be on a monthly, bi-weekly or weekly basis. Payments are
made by borrowers using a number of different methods, including cash
payments at branches, checks and in most cases automatic transfer.
o They are governed by the laws of one of the following Australian
States or Territories:
o New South Wales;
o Victoria;
o Western Australia;
o Queensland;
o South Australia;
o Northern Territory;
o Tasmania; or
o the Australian Capital Territory.
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DETAILS OF THE HOUSING LOAN POOL
The information in the following tables set out various details relating
to the housing loans to be sold to the trust on the closing date. The
information is provided as of the close of business on the cut-off date, [ ].
All amounts have been rounded to the nearest Australian dollar. The sum in any
column may not equal the total indicated due to rounding.
Note that these details may not reflect the housing loan pool as of the
closing date because the seller may substitute loans proposed for sale with
other eligible housing loans or add additional eligible housing loans. The
seller may do this if, for example, the loans originally selected are repaid
early.
The seller will not add, remove or substitute any housing loans prior to
the closing date if this would result in a change of more than 5% in any of the
characteristics of the pool of housing loans described in this prospectus,
unless a revised prospectus is delivered to prospective investors.
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HOUSING LOAN INFORMATION
SEASONING ANALYSIS
<TABLE>
<CAPTION>
AVERAGE % BY % BY
NUMBER BALANCE OUTSTANDING BALANCE NUMBER BALANCE
RANGE OF MONTHS OF SEASONING OF LOANS (A$) (A$) OF LOANS OUTSTANDING
- ------------------------------ ---------- ------------------ --------- ---------- ------------
<S> <C> <C> <C> <C> <C>
</TABLE>
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POOL PROFILE BY GEOGRAPHIC DISTRIBUTION
<TABLE>
<CAPTION>
% BY % BY
NUMBER OF TOTAL NUMBER OF TOTAL
REGION PROPERTIES VALUATION (A$) PROPERTIES VALUATION
- -------- ------------ --------------- ------------ ----------
<S> <C> <C> <C> <C>
</TABLE>
The number of properties is greater than the number of housing loans
because some housing loans are secured by more than one property.
40
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POOL PROFILE BY BALANCE OUTSTANDING
<TABLE>
<CAPTION>
% BY % BY
NUMBER OF BALANCE OUTSTANDING AVERAGE NUMBER BALANCE
CURRENT BALANCE (A$) LOANS (A$) LVR (%) OF LOANS OUTSTANDING
- ---------------------- ----------- --------------- --------- ---------- ------------
<S> <C> <C> <C> <C> <C>
</TABLE>
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POOL PROFILE BY LVR
<TABLE>
<CAPTION>
% BY % BY
NUMBER OF BALANCE OUTSTANDING AVERAGE NUMBER BALANCE
CURRENT LVR (%) LOANS (A$) LVR (%) OF LOANS OUTSTANDING
- ----------------- ----------- ---------------- --------- ---------- ------------
<S> <C> <C> <C> <C> <C>
</TABLE>
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POOL PROFILE BY YEAR OF MATURITY
<TABLE>
<CAPTION>
% BY % BY
NUMBER OF BALANCE OUTSTANDING AVERAGE NUMBER BALANCE
MATURITY YEAR LOANS (A$) LVR (%) OF LOANS OUTSTANDING
- --------------- ----------- ----------------- --------- ---------- ------------
<S> <C> <C> <C> <C> <C>
</TABLE>
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DISTRIBUTION OF CURRENT COUPON RATES
<TABLE>
<CAPTION>
% BY % BY
NUMBER BALANCE OUTSTANDING AVERAGE NUMBER BALANCE
RANGE OF CURRENT COUPON RATES (%) OF LOANS (A$) LVR (%) OF LOANS OUTSTANDING
- ----------------------------------- ---------- ----------------- --------- ---------- ------------
<S> <C> <C> <C> <C> <C>
</TABLE>
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<PAGE>
DISTRIBUTION OF MONTHS REMAINING TO MATURITY
<TABLE>
<CAPTION>
AVERAGE % BY % BY
NUMBER BALANCE OUTSTANDING BALANCE NUMBER BALANCE
RANGE OF MONTHS REMAINING TO MATURITY OF LOANS (A$) (A$) OF LOANS OUTSTANDING
- --------------------------------------- ---------- ---------------- --------- ---------- ------------
<S> <C> <C> <C> <C> <C>
</TABLE>
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ST.GEORGE RESIDENTIAL LOAN PROGRAM
ORIGINATION PROCESS
The housing loans included in the assets of the trust were originated by
St.George Bank from new loan applications and refinancings of acceptable
current St.George Bank housing loans. St.George Bank sources its housing loans
through its national branch network, the national telemarketing center,
St.George Direct, accredited mortgage brokers, mobile lenders and through the
internet.
APPROVAL AND UNDERWRITING PROCESS
Each lending officer must attend a formal training program conducted by
St.George Bank and pass an exam to obtain an approval authority limit. The
lending officer's performance and approval authority is constantly monitored
and reviewed by St.George Bank. This ensures that loans are approved by a
lending officer with the proper authority level and that the quality of the
underwriting process by each individual lending officer is maintained.
Housing loans processed by St.George Bank will either be approved or
declined by a lending officer or referred to a credit specialist. A loan will
generally be referred to a credit specialist for approval where the lending
officer's delegated authority is exceeded.
All housing loan applications, including the applications relating to the
housing loans included in the assets of the trust, must satisfy St.George
Bank's residential policy and procedures described in this section. St.George
Bank, like other lenders in the Australian residential housing loan market,
does not divide its borrowers into groups of differing credit quality for the
purposes of setting standard interest rates for its residential housing loans.
All borrowers must satisfy St.George Bank's underwriting criteria described in
this section. Borrowers are not charged different rates of interest based on
their credit quality.
The approval process consists of determining the valuation of the proposed
security property, verifying the borrower's details and ensuring these details
satisfy St.George Bank's underwriting criteria. This process is conducted by
St.George Bank. Once it is established that the loan application meets
St.George Bank's credit standards, the loan must be approved by an authorized
bank officer.
The property to be secured is required to be appraised by a valuer from
St.George Bank's approved list of registered valuers if the loan-to-value ratio
of the property is above 80% and in the following circumstances:
o newly constructed homes and other dwellings not previously occupied;
o refinancings from other financial institutions;
o the purchase of vacant land with the commitment to build a house
immediately; or
o if the loan amount exceeds A$250,000 if the related mortgaged property
is located in the Sydney metropolitan area, or A$200,000 if located
elsewhere.
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In non-valuation cases, St.George Bank requires a copy of the stamped
contract of sale settlement which confirms the purchase price of the property.
In addition, St.George Bank requires valuers to be members of the Australian
Property Institute. A housing loan may be secured by more than one property, in
which case the combined value of the properties is considered. The
loan-to-value ratio may not exceed 95% for owner occupied properties or 90% for
non-owner occupied properties.
Verification of an applicant's information is central to the approval
process. St.George Bank verifies all income on all loan applications by
procedures such as employment checks, including a review of the applicant's
last three years of employment history, and tax returns. It also conducts
credit checks and enquiries through the Credit Reference Association of
Australia in accordance with current credit criteria. A statement of the
applicant's current assets and liabilities is also obtained.
The prospective borrower must have a satisfactory credit history, stable
employment, evidence of a genuine savings pattern and a minimum 5% deposit plus
costs in genuine savings. Gifts, inheritance and money borrowed from other
sources are not genuine savings and are not considered as part of the minimum
"5% deposit plus costs" requirement.
St.George Bank requires all borrowers to satisfy a minimum disposable
income level after all commitments, including allowances for living expenses
and the proposed housing loan, with an allowance for interest rate increases.
This is to ensure that the applicant has the capacity to repay loans from his
or her current income.
All borrowers in respect of housing loans are natural persons or
corporations. Housing loans to corporations may also be secured by guarantees
from directors. Guarantees may also be obtained in other circumstances.
St.George Bank conducts a review of a sample of approved housing loans on
a monthly basis to ensure individual lending officers maintain all policy
standards. Once a verified application is accepted, St.George Bank provides
each loan applicant with a loan agreement comprised of a loan offer document
together with a general terms and conditions booklet. Upon receipt of
acceptance of this offer from all borrowers under the particular loan, the loan
will proceed to execution of the mortgage documentation and certification of
title. When St.George Bank or its solicitors have received these documents,
settlement will occur. Upon settlement, the mortgage is registered and the
documents stored at St.George Bank's Head Office at Kogarah, Sydney or in
interstate branch offices. A condition of settlement is that the mortgagor
establish and maintain full replacement property insurance on the security
property.
St.George Bank's credit policies and approval procedures are subject to
constant review. Improvements in procedures are continuous. Credit policy may
change from time to time due to business conditions and legal or regulatory
changes.
ST.GEORGE BANK'S PRODUCT TYPES
STANDARD VARIABLE RATE LOAN
This type of loan is St.George Bank's traditional standard variable rate
product. There is not a stated or defined explicit link to the interest rates
in the financial
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markets, although, in general, the standard variable rate does follow movements
in the financial markets. Standard variable rate loans may be converted to a
fixed rate product at the borrower's request, subject to payment of a switch
fee.
An additional subproduct of the standard variable rate loan is the
St.George Bank loyalty loan. Existing and previous St.George Bank home loan
customers with a St.George Bank home loan relationship of 5 years or more are
entitled to a "loyalty" rate whenever their loan is at the standard variable
rate. New St.George Bank customers and Advance Bank home loan customers are not
entitled to the "loyalty" rate. The "loyalty" discount rate is guaranteed to be
0.25 percentage points below the standard variable rate until January 1, 2006.
ST.GEORGE GREAT AUSTRALIAN HOME LOAN
The St.George Great Australian Home Loan product has a low variable
interest rate which is not linked to, and historically has been lower than,
St.George Bank's standard variable rate. Consistent with the standard variable
rate loan the interest rates set under the St.George Great Australian Home Loan
product have no stated or explicit link to interest rates in the financial
markets. Further, the interest rate of the St.George Great Australian Home Loan
could fluctuate independently of standard variable rates.
The St.George Great Australian Home Loan product is not convertible to a
fixed rate mortgage product without the payment of a switch fee. Additionally,
no interest offset account is available under this product and loan payments
may be made monthly, bi-monthly or weekly and must be made by automatic
transfer. Lump sum payments are permitted under the St.George Great Australian
Home Loan Product at any time without penalty and there is no provision to stop
automatic transfers when payments are made in advance.
FIXED RATE LOAN
Some of the housing loans bear a fixed rate of interest for up to 5 years
as of the cut-off date. At the end of that fixed rate period, unless the
interest rate is re-fixed at a rate and for a term agreed between the borrower
and St.George Bank, the loans will automatically convert to the standard
variable rate of interest.
The Servicer will not allow the interest rate on a fixed rate loan to be
re-fixed at the end of its fixed rate term if it will result in a downgrade or
withdrawal of the rating of the notes.
SPECIAL FEATURES OF THE HOUSING LOANS
Each housing loan may have some or all of the features described in this
section. In addition, during the term of any housing loan, St.George Bank may
agree to change any of the terms of that housing loan from time to time at the
request of the borrower.
SWITCHING INTEREST RATES
Most housing loans allow the relevant borrower the option to request a
change from a fixed interest rate to a variable interest rate, or vice versa.
The Servicer will
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not allow conversion of a loan if it will result in a downgrade or withdrawal
of the rating of the notes. Any variable rate converting to a fixed rate
product will automatically be matched by an increase in the fixed-floating rate
swap to hedge the fixed rate exposure.
INCREASE LOANS
A borrower who is not a St.George Great Australian Home Loan borrower may
apply to St.George Bank to borrow additional funds secured by the existing
mortgage. The proceeds from these "increase" loans may be used by the borrower
for any purpose.
Some of the loans in the housing loan pool as of the cut-off date were
originated as these increase loans. All of these increase loans will be
assigned to the trust, together with each related housing loan, and form part
of the assets of the trust.
Where a borrower seeks to obtain an increase loan with respect to a
housing loan after the cut-off date, and the aggregate of the existing housing
loan and the increase loan meets the eligibility criteria, the increase loan
will be approved and settled by St.George Bank. St.George Bank will provide the
funding for the increase loan which will be secured by the existing mortgage.
In the event, however, that it becomes necessary to enforce the loan or the
related mortgage, the master trust deed requires that any proceeds of that
enforcement be applied in satisfaction of all amounts -- actual or contingent
- -- owing under the housing loan included in the assets of the trust, before any
amounts may be applied in satisfaction of the increase loan.
St.George Bank will provide all funding for that increase loan, which will
be secured by the related mortgage. Under the master trust deed, the servicer
will, at the direction of the manager, in the event of enforcement of a housing
loan, distribute the proceeds to the issuer trustee of all housing loans which
are assets of the trust in priority to any increase loan advanced by St.George
Bank after the cut-off date.
SUBSTITUTION OF SECURITY
A borrower may apply to the servicer to achieve the following:
o substitute a different property in place of the existing security
property;
o add a further property as security for a loan; or
o release a mortgaged property under an existing loan contract.
If the servicer's credit criteria are satisfied and another property is
substituted for the existing security for the housing loan, the mortgage which
secures the existing housing loan may be discharged without the borrower being
required to repay the housing loan.
If all of the following conditions occur, then the housing loan will
remain in the housing loan pool, secured by the new mortgage:
o a new property subject to a mortgage satisfies the eligibility
criteria;
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o the principal outstanding under the housing loan does not increase;
o the purchase of the new property by the borrower occurs simultaneously
with the discharge of the original mortgage; and
o the new property is acceptable to the mortgage insurer.
If any of the following conditions occur, then the Unpaid Balance will be
repaid by the seller and the housing loan will cease to be an asset of the
trust:
o the new property does not satisfy the eligibility criteria;
o the principal outstanding under the housing loan will change
(increase); or
o settlement does not occur simultaneously with discharge.
That payment of the Unpaid Balance will form part of the collections for
the relevant collection period.
REDRAW
Each of the variable rate housing loans allows the borrower to redraw
principal repayments made in excess of scheduled principal repayments during
the period in which the relevant housing loan is charged a variable rate of
interest. Redraws must be for at least $2,000 per transaction. Borrowers may
request a redraw at any time, but its availability is always at the discretion
of St.George Bank. The borrower is required to pay a fee to St.George Bank in
connection with a redraw. Currently, St.George Bank does not permit redraws on
fixed rate housing loans. A redraw will not result in the related housing loan
being removed from the trust.
PAYMENT HOLIDAY
The documentation for a housing loan may allow the borrower a payment
holiday where the borrower has prepaid principal, creating a difference between
the outstanding principal balance of the loan and the scheduled amortized
principal balance of the housing loan. The borrower is not required to make any
payments, including payments of interest, until the outstanding principal
balance of the housing loan plus unpaid interest equals the scheduled amortized
principal balance. The failure by the borrower to make payments during a
payment holiday may not necessarily lead the related housing loan to be
considered delinquent.
EARLY REPAYMENT
A borrower will not incur break fees if an early repayment or partial
prepayment of principal occurs under a variable rate housing loan contract.
However, a borrower may incur break fees if an early repayment or partial
prepayment of principal occurs on a fixed rate housing loan. Any housing loan
approved before November 1, 1996 and on a fixed rate at the time of the break
has a break fee of up to three months' interest on the portion of principal
prepaid on the housing loan. Any housing loan approved before May 15, 1999 and
on a fixed rate at the time of the break will be subject to an economic break
fee equal to a maximum of:
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o 3 months interest, if the housing loan had an original fixed rate term
of 1 to 3 years;
o 4 months interest, if the housing loan had an original fixed rate term
of 4 years; or
o 5 months interest, if the housing loan had an original fixed rate term
of 5 years.
Any housing loan approved on or after May 16, 1999 and on a fixed rate at
the time of the break will not be subject to these limits on break fees.
Currently, the servicer's policy is not to charge break fees in respect of
a housing loan if prepayments for that housing loan are less than A$5,000 in
any 12 month period while the interest rate is fixed. Where break fees are
payable, payment is required upon receipt of the prepayment or discharge. In
some circumstances, the break fees will be capitalized.
SWITCHING TO AN INVESTMENT OR OWNER-OCCUPIED HOUSING LOAN
A borrower may elect to switch the use of the mortgaged property from
owner-occupied property to investment or vice versa. St.George Bank must ensure
that following any switch the related housing loans in the pool still satisfy
the eligibility criteria. St.George Bank requires notification from the
borrower of a switch and reserves the right to change the interest rate or the
fees charged with respect to the housing loan.
CAPITALIZED FEES
A borrower may request St.George Bank to provide product features under
its housing loan contract without having to pay the usual up-front fee relating
to that product. In those cases, St.George Bank may capitalize the fee, which
will thus constitute part of the principal to be amortized over the life of the
housing loan.
COMBINATION OR "SPLIT" HOUSING LOANS
A borrower may elect to split its loan into separate funding portions
which may, among other things, be subject to different types of interest rates.
Each part of the housing loan is effectively a separate loan contract, even
though all the separate loans are secured by the same mortgage.
If a housing loan is split, each separate loan will remain in the trust as
long as each individual loan matures before the final maturity date of the
notes. If any loan matures after the final maturity date of the notes, that
loan will be removed from the trust and the Unpaid Balance of the loan will be
repaid by St.George Bank. The other segments of the "split" loan which mature
before the final maturity date of the notes will remain in the trust.
LOAN OFFSET
St.George Bank offers borrowers an interest offset product under which the
interest rate accrued on the borrower's deposit account is offset against
interest on
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the borrower's housing loan on a monthly basis. St.George Bank does not
actually pay interest to the borrower on the loan offset account, but reduces
the amount of interest which is payable by the borrower under its housing loan.
The borrower continues to make its scheduled mortgage payment with the result
that the portion allocated to principal is increased by the amount of interest
offset. St.George Bank will pay to the trust the aggregate of all interest
amounts offset on a monthly basis. These amounts will constitute Finance Charge
Collections and Gross Principal Collections for the relevant period. The loan
offset account must be in the same name as the housing loan.
If at any time there is no basis swap in place, St.George Bank must ensure
that the interest rate applicable to the borrower's deposit account is such
that St.George Bank, as servicer, will not be required to increase the
threshold rate as described in "Description of the Class A Notes -- The
Interest Rate Swaps -- Threshold Rate".
If, following a Title Perfection Event, the trust obtains legal title to a
housing loan, St.George Bank will no longer be able to offer an interest offset
arrangement for that housing loan. Under the housing loan documentation,
borrowers have waived the right to set off against all deposits held with
St.George Bank.
ADDITIONAL FEATURES
St.George Bank may from time to time offer additional features in relation
to a housing loan which are not described in the preceding section. However,
before doing so, St.George Bank must satisfy the manager that the additional
features would not affect any mortgage insurance policy covering the housing
loan and would not cause a downgrade or withdrawal of the rating of any notes.
In addition, except for the interest rate and the amount of fees, St.George
Bank cannot change any of the terms of a housing loan without the related
borrower's consent.
THE MORTGAGE INSURANCE POLICIES
GENERAL
Each housing loan is insured under a mortgage insurance policy by Housing
Loans Insurance Corporation Pty Limited (ACN 071 466 334) of 259 George Street,
Sydney, NSW 2000, Australia. The seller will equitably assign its interest in
each mortgage insurance policy to the issuer trustee on the closing date. The
consent of the mortgage insurer is required for the equitable assignment of the
mortgages and the mortgage insurance policies to the issuer trustee and for the
servicer to service the housing loans. The seller will ensure that this consent
is obtained on or prior to the closing date. This section is a summary of the
general provisions of the mortgage insurance policies.
COVERAGE
The amount covered by each mortgage insurance policy will be the amount
owed with respect to the related housing loan, including unpaid principal,
accrued interest at any non-default rate up to specified dates, fines, fees,
charges and proper enforcement costs, less all amounts recovered from
enforcement of the mortgage on
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the related mortgaged property, including sale proceeds, compensation for
compulsory acquisition of the related mortgaged property and any rents or
profits received by the issuer trustee.
TIMELY PAYMENT COVER
Each mortgage insurance policy also includes a timely payment cover for
losses resulting from the failure of a borrower to pay all or part of a regular
installment payment when due. The loss covered by a timely payment cover is the
amount by which the actual payment, if any, received by the issuer trustee is
less than the amount of the regular payment, calculated at the non-default
interest rate for the housing loan. The timely payment cover on each housing
loan will cover up to an aggregate of 24 monthly payments on that housing loan.
REQUIREMENT AND RESTRICTIONS
There are a number of requirements and restrictions imposed on the insured
under each mortgage insurance policy which may entitle the mortgage insurer to
cancel the mortgage insurance policy or refuse or reduce the amount of a claim
with respect to a housing loan, including:
o the failure to pay any premium when due or within the relevant grace
period;
o the failure to file a claim within time;
o the failure of the servicer to be approved by the mortgage insurer;
o the failure of the housing loan contract to require that the related
mortgaged property to be insured under a general insurance policy;
o an incorrect statement or breach of the duty of disclosure by the
insured in relation to the policy;
o the existence of an encumbrance or other interest which affects or has
priority over the related mortgage;
o the failure to register the related mortgage or to stamp the housing
loan, related mortgage or collateral security;
o the issuer trustee failing to comply with its reporting obligations;
o the housing loan or related mortgage being materially altered or
modified without the mortgage insurer's consent; and
o the occurrence of other circumstances reducing the insured's rights
under any insured housing loan or related mortgage.
The manager will perform the issuer trustee's obligations under the
mortgage insurance policies on its behalf.
DESCRIPTION OF THE MORTGAGE INSURER
The mortgage insurer is owned by GE Capital Australia, which is a wholly
owned subsidiary of GE Capital Services Inc. GE Capital Services Inc, is a
diversified industrial and financial services company with operations in over
100 countries. GE
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Capital Services Inc, is rated AAA by Fitch IBCA, Aaa by Moody's and AAA by
Standard & Poor's. It has significant lender's mortgage insurance business
around the world, operating in the United States, United Kingdom, Canada and
Australia and has over US$200 billion of loans insured globally. The mortgage
insurer has been given a AAA claims paying rating in its own right by Fitch
IBCA, a Aa1 rating by Moody's and a AAA rating by Standard & Poor's
DESCRIPTION OF THE CLASS A NOTES
GENERAL
The issuer trustee will issue the Class A notes on the closing date
pursuant to a direction from the manager to the issuer trustee to issue the
notes and the terms of the master trust deed, the supplementary terms notice
and the note trust deed. The notes will be governed by the laws of New South
Wales. The following summary describes the material terms of the Class A notes.
The summary does not purport to be complete and is subject to the terms and
conditions of the Class A notes, which are attached as appendices to this
prospectus.
FORM OF THE CLASS A NOTES
BOOK-ENTRY REGISTRATION
The Class A notes will be issued only in permanent book-entry format in
minimum denominations of US$100,000. Unless definitive notes are issued, all
references to actions by the Class A noteholders will refer to actions taken by
the Depository Trust Company (DTC) upon instructions from its participating
organizations and all references in this prospectus to distributions, notices,
reports and statements to Class A noteholders will refer to distributions,
notices, reports and statements to DTC or its nominee, as the registered
noteholder, for distribution to owners of the Class A notes in accordance with
DTC's procedures.
Class A noteholders may hold their interests in the notes through DTC, in
the United States, or Clearstream Banking, societe anonyme ("Clearstream,
Luxembourg") or the Euroclear System, in Europe, if they are participants in
those systems, or indirectly through organizations that are participants in
those systems. Cede & Co., as nominee for DTC, will hold the Class A notes.
Clearstream, Luxembourg and Euroclear will hold omnibus positions on behalf of
their respective participants, through customers' securities accounts in
Clearstream, Luxembourg's and Euroclear's names on the books of their respective
depositaries. The depositaries in turn will hold the positions in customers'
securities accounts in the depositaries' names on the books of DTC.
DTC has advised the manager and the underwriters that it is:
o a limited-purpose trust company organized under the New York Banking
Law;
o a "banking organization" within the meaning of the New York Banking
Law;
o a member of the Federal Reserve System;
o a "clearing corporation" within the meaning of the New York Uniform
Commercial Code; and
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o a "clearing agency" registered under the provisions of Section 17A of
the Exchange Act.
DTC holds securities for its participants and facilitates the clearance
and settlement among its participants of securities transactions, including
transfers and pledges, in deposited securities through electronic book-entry
changes in its participants' accounts. This eliminates the need for physical
movement of securities. DTC participants include securities brokers and
dealers, banks, trust companies, clearing corporations and other organizations.
Indirect access to the DTC system is also available to others including
securities brokers and dealers, banks, and trust companies that clear through
or maintain a custodial relationship with a participant, either directly or
indirectly. The rules applicable to DTC and its participants are on file with
the SEC.
Transfers between participants on the DTC system will occur in accordance
with DTC rules. Transfers between participants on the Clearstream, Luxembourg
system and participants on the Euroclear system will occur in accordance with
their rules and operating procedures.
Cross-market transfers between persons holding directly or indirectly
through DTC, on the one hand, and directly or indirectly through Clearstream,
Luxembourg participants or Euroclear participants, on the other, will be
effected by DTC in accordance with DTC rules on behalf of the relevant European
international clearing system by that system's depositary. However, these
cross-market transactions will require delivery of instructions to the relevant
European international clearing system by the counterparty in that 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 its
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.
Clearstream, Luxembourg participants and Euroclear participants may not deliver
instructions directly to their system's depositary.
Because of time-zone differences, credits of securities in Clearstream,
Luxembourg or Euroclear as a result of a transaction with a DTC participant will
be made during the subsequent securities settlement processing, dated the
business day following the DTC settlement date. The credits for any transactions
in these securities settled during this processing will be reported to the
relevant Clearstream, Luxembourg participant or Euroclear participant on that
business day. Cash received in Clearstream, Luxembourg or Euroclear as a result
of sales of securities by or through a Clearstream, Luxembourg participant or a
Euroclear participant to a DTC participant will be received and available on the
DTC settlement date. However, it will not be available in the relevant
Clearstream, Luxembourg or Euroclear cash account until the business day
following settlement in DTC.
Purchases of Class A notes held through the DTC system must be made by or
through DTC participants, which will receive a credit for the Class A notes on
DTC's records. The ownership interest of each actual Class A noteholder is in
turn to be
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recorded on the DTC participants' and indirect participants' records. Class A
noteholders will not receive written confirmation from DTC of their purchase.
However, noteholders are expected to receive written confirmations providing
details of the transaction, as well as periodic statements of their holdings,
from the DTC participant or indirect participant through which the noteholder
entered into the transaction. Transfers of ownership interests in the Class A
notes are to be accomplished by entries made on the books of DTC participants
acting on behalf of the Class A noteholders. Class A noteholders will not
receive notes representing their ownership interest in offered notes unless use
of the book-entry system for the Class A notes is discontinued.
To facilitate subsequent transfers, all securities deposited by DTC
participants with DTC are registered in the name of DTC's nominee, Cede & Co.
The deposit of securities with DTC and their registration in the name of Cede &
Co. effects no change in beneficial ownership. DTC has no knowledge of the
actual noteholders of the Class A notes; DTC's records reflect only the
identity of the DTC participants to whose accounts the Class A notes are
credited, which may or may not be the actual beneficial owners of the Class A
notes. The DTC participants will remain responsible for keeping account of
their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to DTC participants,
by DTC participants to indirect participants, and by DTC participants and
indirect participants to Class A noteholders will be governed by arrangements
among them and by any statutory or regulatory requirements as may be in effect
from time to time.
Neither DTC nor Cede & Co. will consent or vote on behalf of the notes.
Under its usual procedures, DTC mails an omnibus proxy to the issuer trustee as
soon as possible after the record date, which assigns Cede & Co.'s consenting
or voting rights to those DTC participants to whose accounts the Class A notes
are credited on the record date, identified in a listing attached to the proxy.
Principal and interest payments on the Class A notes will be made to DTC.
DTC's practice is to credit its participants' accounts on the applicable
distribution date in accordance with their respective holdings shown on DTC's
records unless DTC has reason to believe that it will not receive payment on
that distribution date. Standing instructions, customary practices, and any
statutory or regulatory requirements as may be in effect from time to time will
govern payments by DTC participants to Class A noteholders. These payments will
be the responsibility of the DTC participant and not of DTC, the issuer
trustee, the note trustee or the principal paying agent. Payment of principal
and interest to DTC is the responsibility of the issuer trustee, disbursement
of the payments to DTC participants is the responsibility of DTC, and
disbursement of the payments to Class A noteholders is the responsibility of
DTC participants and indirect participants.
DTC may discontinue providing its services as securities depository for
the notes at any time by giving reasonable notice to the principal paying
agent. Under these circumstances, if a successor securities depository is not
obtained, definitive notes are required to be printed and delivered.
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According to DTC, the foregoing information about DTC has been provided
for informational purposes only and is not intended to serve as a
representation, warranty, or contract modification of any kind.
Clearstream, Luxembourg is incorporated under the laws of Luxembourg.
Clearstream, Luxembourg holds securities for its participating organizations and
facilitates the clearance and settlement of securities transactions between
Clearstream, Luxembourg participants through electronic book-entry changes in
accounts of Clearstream, Luxembourg participants, thereby eliminating the need
for physical movement of notes. Transactions may be settled in Clearstream,
Luxembourg in any of 36 currencies, including U.S. dollars.
Clearstream, Luxembourg participants are financial institutions around the
world, including underwriters, securities brokers and dealers, banks, trust
companies, and clearing corporations. Indirect access to Clearstream, Luxembourg
is also available to others, including banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship with a
Clearstream, Luxembourg participant, either directly or indirectly.
The Euroclear System was created in 1968 to hold securities for its
participants and to clear and settle transactions between Euroclear
participants through simultaneous electronic book-entry delivery against
payment. This eliminates the need for physical movement of notes. Transactions
may be settled in any of 32 currencies, including U.S. dollars.
The Euroclear System is operated by Morgan Guaranty Trust Company of New
York, Brussels, Belgium office, the Euroclear operator, under contract with
Euroclear Clearance System, Societe Cooperative, a Belgium cooperative
corporation, the Euroclear 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
Euroclear cooperative. The board of the Euroclear cooperative establishes
policy for the Euroclear System.
Euroclear participants include banks, including central banks, securities
brokers and dealers and other professional financial intermediaries. Indirect
access to the Euroclear System is also available to other firms that maintain a
custodial relationship with a Euroclear participant, either directly or
indirectly.
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. These terms and
conditions govern transfers of securities and cash within the Euroclear System,
withdrawal of securities and cash from the Euroclear System, and receipts of
payments for securities in the Euroclear System. All securities in the
Euroclear System are held on a fungible basis without attribution of specific
notes to specific securities clearance accounts. The Euroclear operator acts
under these 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 Class A notes held through Clearstream, Luxembourg or
Euroclear will be credited to the cash accounts of Clearstream, Luxembourg
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participants or Euroclear participants in accordance with the relevant system's
rules and procedures, to the extent received by its depositary. These
distributions must be reported for tax purposes in accordance with United States
tax laws and regulations. Clearstream, Luxembourg or the Euroclear operator, as
the case may be, will take any other action permitted to be taken by a Class A
noteholder on behalf of a Clearstream, Luxembourg participant or Euroclear
participant only in accordance with its rules and procedures, and depending on
its depositary's ability to effect these actions on its behalf through DTC.
Although DTC, Clearstream, Luxembourg and Euroclear have agreed to the
foregoing procedures in order to facilitate transfers of Class A notes among
participants of DTC, Clearstream, Luxembourg and Euroclear, they are under no
obligation to perform or continue to perform these procedures and these
procedures may be discontinued at any time.
DEFINITIVE NOTES
Notes issued in definitive form are referred to in this prospectus as
"definitive notes." A class of Class A notes will be issued as definitive
notes, rather than in book entry form to DTC or its nominees, only if one of
the following events occurs:
o the principal paying agent advises the manager in writing that DTC is
no longer willing or able to discharge properly its responsibilities
as depository for the class of notes, and the manager is not able to
locate a qualified successor;
o the issuer trustee, at the direction of the manager, advises the
principal paying agent in writing that it elects to terminate the
book-entry system through DTC; or
o after the occurrence of an event of default, the note trustee, at the
written direction of noteholders holding a majority of the outstanding
principal balance of a class of notes, advises the issuer trustee and
the principal paying agent, that the continuation of a book-entry
system is no longer in the best interest of the noteholders of that
class.
If any of these events occurs, DTC is required to notify all of its
participants of the availability of definitive notes. Each class of Class A
notes will be serially numbered if issued in definitive form.
Definitive notes will be transferable and exchangeable at the offices of
the note registrar, which is initially the principal paying agent located at
HSBC Bank USA, Issuer Services, 140 Broadway, 12th Floor, New York, New York
10005-1180 and at HSBC Bank USA, c/o HSBC Bank plc, Issuer Services, Mariner
House, Pepys Street, London EC3N 4-DA. The note registrar will not impose a
service charge for any registration of transfer or exchange, but may require
payment of an amount sufficient to cover any tax or other governmental charge.
The note registrar will not be required to register the transfer or exchange of
definitive notes within the thirty days preceding a quarterly distribution date
for the definitive notes.
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DISTRIBUTIONS ON THE NOTES
Collections in respect of interest and principal will be received during
each monthly collection period. Collections include the following:
o interest and principal receipts from the housing loans;
o proceeds from enforcement of the housing loans;
o proceeds from claims under the mortgage insurance policies; and
o payments by the seller, the servicer or the custodian relating to
breaches of their representations or undertakings.
The issuer trustee will make some payments on a monthly basis on each
monthly payment date, which will primarily be to the providers of support
facilities to the trust. The issuer trustee will make the majority of its
payments on a quarterly basis on each quarterly payment date, including
payments to noteholders. On each quarterly payment date, the principal paying
agent will distribute principal and interest, if any, to the registered Class A
noteholders as of the related quarterly determination date if the Class A notes
are held in book-entry form, or, if the Class A notes are held in definitive
form, the last day of the prior calendar month.
KEY DATES AND PERIODS
The following are the relevant dates and periods for the allocation of
cashflows and their payments.
MONTHLY COLLECTION PERIOD... in relation to a monthly payment date, means
the calendar month which precedes the calendar
month in which the monthly payment date occurs.
However, the first and last monthly collection
periods are as follows:
o first: period from and including the cut-off
date to and including [ .]
o last: period from but excluding the last day
of the calendar month preceding the
termination date to and including the
termination date
MONTHLY DETERMINATION DATE... The date which is 2 business days before a
monthly payment date
MONTHLY PAYMENT DATE........ 20th day of each of January, February, April,
May, July, August, October and November, or, if
20th day is not a business day, then the next
business day, unless that business day falls in
the next calendar month, in which case the
monthly payment date will be the preceding
business day, beginning in [ .]
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QUARTERLY COLLECTION
PERIOD...................... in relation to a quarterly payment date, means
the three monthly collection periods that precede
the calendar month in which the quarterly payment
date falls. However, the first and last quarterly
collection periods are as follows:
o [first: period from and including the
cut-off date to and including .]
o last: period from but excluding the last day
of the prior quarterly collection period to
and including the termination date.
QUARTERLY DETERMINATION
DATE....................... The date which is 2 business days before a
quarterly payment date.
QUARTERLY PAYMENT DATE...... 20th day of each of March, June, September
and December, or, if 20th day is not a
business day, then the next business day, unless
that business day falls in the next calendar
month, in which case the quarterly payment date
will be the preceding business day, beginning in
[ .]
EXAMPLE CALENDAR
The following example calendar for a quarter assumes that all relevant
days are business days:
MONTHLY COLLECTION PERIOD... [to]
MONTHLY DETERMINATION DATE... [ ]
MONTHLY PAYMENT DATE........ [ ]
MONTHLY COLLECTION PERIOD... [to]
MONTHLY DETERMINATION DATE... [ ]
MONTHLY PAYMENT DATE........ [ ]
MONTHLY COLLECTION PERIOD... [to]
QUARTERLY COLLECTION
PERIOD...................... [to]
QUARTERLY DETERMINATION
DATE....................... [ ]
QUARTERLY PAYMENT DATE...... [ ]
INTEREST PERIOD............. [to]
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CALCULATION OF TOTAL AVAILABLE FUNDS
On each determination date, the manager will calculate the Available
Income, principal draws and liquidity draws for the immediately preceding
collection period. The sum of those amounts is the Total Available Funds.
AVAILABLE INCOME
AVAILABLE INCOME for a monthly collection period means the aggregate of:
o the FINANCE CHARGE COLLECTIONS for that collection period, which are:
o the aggregate of all amounts received by or on behalf of the
issuer trustee during that collection period in respect of
interest, fees and other amounts in the nature of income payable
under or in respect of the housing loans and related security and
other rights with respect to the housing loans, including:
o amounts on account of interest recovered from the
enforcement of a housing loan;
o any payments by the seller to the issuer trustee on the
repurchase of a housing loan during that collection period
which are attributable to interest;
o any break fees paid by borrowers under fixed rate housing
loans received during that collection period; and
o any amount paid to the issuer trustee by the seller equal to
the amount of any interest which would be payable by the
seller to a borrower on amounts standing to the credit of
the borrower's loan offset account if interest was payable
on that account, to the extent attributable to interest on
the housing loan;
o all other 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:
o from the seller, the servicer, the manager, the issuer
trustee in its personal capacity, in respect of a
breach in relation to which it is not entitled to be
indemnified out of the assets of the trust, or the
custodian, in respect of any breach of a
representation, warranty or undertaking contained in
the transaction documents; and
o from the seller, the servicer, the indemnifier, the
manager or the custodian, under any obligation under
the transaction documents, to indemnify or reimburse
the issuer trustee for any amount or from the issuer
trustee in its personal capacity under any obligation
under the transaction documents to indemnify the
trust,
in each case which the manager determines to be in respect of
interest, fees and other amounts in the nature of income payable
under the housing loans and related security and other rights
with respect thereto; and
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o recoveries in the nature of income received, after a Finance Charge
Loss or Principal Loss has arisen, by or on behalf of the issuer
trustee during that collection period;
LESS:
o governmental charges collected by or on behalf of the issuer trustee
for that collection period; and
o the aggregate of all bank fees and charges due to the servicer or the
seller from time to time as agreed by them and consented to by the
issuer trustee, that consent not to be unreasonably withheld, and
collected by the seller or the servicer during that collection period;
PLUS:
o to the extent not included in Finance Charge Collections:
o any amount received by or on behalf of the issuer trustee in
relation to that collection period on or by the payment date
immediately following the end of that collection period with
respect to net receipts under the basis swap or the
fixed-floating rate swap;
o any interest income received by or on behalf of the issuer
trustee during that collection period in respect of funds
credited to the collection account;
o amounts in the nature of interest otherwise paid by the seller,
the servicer or the manager to the issuer trustee in respect of
collections held by it;
o all other amounts received by or on behalf of the issuer trustee
in respect of the assets of the trust in the nature of income;
and
o all amounts received by or on behalf of the issuer trustee in the
nature of interest during that collection period from any
provider of a support facility, other than the redraw facility,
under a support facility, including any amounts received under a
mortgage insurance policy by way of a timely payment cover, and
which the manager determines should be accounted for in respect
of a Finance Charge Loss;
o but excluding any interest credited to a collateral account of a
support facility.
Available Income for a quarterly collection period will be the sum of the
Available Income for the three monthly collection periods included in that
quarterly collection period.
PRINCIPAL DRAWS
If the manager determines on any determination date that the Available
Income of the trust for the collection period ending immediately prior to that
determination date is insufficient to meet Total Payments of the trust for that
collection period, then the manager will direct the issuer trustee to apply
Principal Collections collected
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during that collection period to cover the Payment Shortfall to the extent
available. These principal draws will be reimbursed out of any Excess Available
Income available for this purpose on subsequent payment dates.
LIQUIDITY DRAWS
If the manager determines on any determination date that the related
Payment Shortfall, if any, will not be covered fully by a principal draw, the
manager must direct the issuer trustee to make a liquidity draw on the
liquidity account in an amount equal to the lesser of the amount of the
shortfall or the amount remaining in the liquidity account.
DISTRIBUTION OF TOTAL AVAILABLE FUNDS
In relation to a collection period, all amounts payable by the issuer
trustee as described in one of the next two subsections, as applicable, on the
payment date relating to that collection period, constitute TOTAL PAYMENTS.
MONTHLY TOTAL PAYMENTS
On each monthly payment date, but not a quarterly payment date, based on
the calculations, instructions and directions provided to it by the manager,
the issuer trustee must pay or cause to be paid out of Total Available Funds,
in relation to the monthly collection period ending immediately before that
monthly payment date, the following amounts in the following order of priority:
o first, an amount equal to the Accrued Interest Adjustment to the
seller provided that the total amount of Accrued Interest Adjustments
with respect to any quarterly collection period, except the quarterly
collection period ending in [ ], shall not exceed an amount equal to
[0.15%] multiplied by the aggregate outstanding principal balance of
the housing loans on the first day of that quarterly collection period
multiplied by the actual number of days in that quarterly collection
period divided by 365;
o second, repayment to the mortgage insurer, of any payment in the
nature of income received from a borrower for which the mortgage
insurer previously paid under the related mortgage insurance policy by
way of a timely payment cover;
o third, any interest payable by the issuer trustee under the redraw
facility; and
o fourth, any repayment of a liquidity draw made on or prior to the
previous monthly payment date.
QUARTERLY TOTAL PAYMENTS
On each quarterly payment date, based on the calculations, instructions
and directions provided to it by the manager, the issuer trustee must pay or
cause to be paid out of Total Available Funds, in relation to the quarterly
collection period ending immediately before that quarterly payment date, the
following amounts in the following order of priority:
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o first, subject to the first bullet point in "Monthly Total Payments"
above, an amount equal to the Accrued Interest Adjustment to the
seller;
o second, repayment to the mortgage insurer, of any payment in the
nature of income received from a borrower for which the mortgage
insurer previously paid under the related mortgage insurance policy by
way of a timely payment cover;
o third, payment to the fixed-floating rate swap provider under the
fixed-floating rate swap of any break fees received from a borrower or
the mortgage insurer during the quarterly collection period;
o fourth, unless specified later in this paragraph, Trust Expenses which
have been incurred prior to that quarterly payment date and which have
not previously been paid or reimbursed, in the order set out in the
definition of Trust Expenses;
o fifth, pro rata between themselves:
o any fees, including the availability fee, payable by the issuer
trustee under the redraw facility;
o any fees payable by the issuer trustee under the basis swap; and
o any fees payable by the issuer trustee under the fixed-floating
rate swap;
o sixth, any amounts that would have been payable under this paragraph,
other than under the last bullet point of this section, on any
previous quarterly payment date, if there had been sufficient Total
Available Funds, which have not been paid by the issuer trustee, in
the order they would have been paid under that prior application of
funds as described in this section;
o seventh, payments to the mortgage insurer of the positive difference,
if any, between any overpayments by the mortgage insurer of amounts in
respect of interest, for which the mortgage insurer has not been
previously reimbursed, and the aggregate of the Excess Distributions
paid to the beneficiary on previous quarterly payment dates;
o eighth, pro rata between themselves:
o any interest payable by the issuer trustee under the redraw
facility;
o any amounts payable by the issuer trustee under the basis swap or
the fixed-floating rate swap not included in the preceding
clauses;
o any repayment of a liquidity draw made on or prior to the
previous payment date; and
o the payment to the currency swap provider of the A$ Class A
Interest Amount at that date, which is thereafter to be applied
to payments of interest on the Class A notes;
o ninth, any amounts that would have been payable under the next clause,
on any previous quarterly payment date, if there had been sufficient
Total Available Funds, which have not been paid by the issuer trustee;
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o tenth, the payment of the interest on the Class B notes; and
o eleventh, payment to the mortgage insurer of an amount equal to any
overpayment by the mortgage insurer of amounts in respect of interest,
for which the mortgage insurer has not previously been reimbursed.
The issuer trustee shall only make a payment described in any of the
preceding clauses to the extent that any Total Available Funds remain from
which to make the payment after amounts with priority to that payment have been
distributed.
TRUST EXPENSES
TRUST EXPENSES are, in relation to a collection period, in the following
order of priority:
o first, taxes payable in relation to the trust for that collection
period;
o second, any expenses relating to the trust for that collection period
which are not already covered in the following seven clauses;
o third, pro rata, the issuer trustee's fee, the security trustee's fee
and the note trustee's fee for that collection period;
o fourth, the servicer's fee for that collection period;
o fifth, the manager's fee for that collection period;
o sixth, the custodian's fee for that collection period;
o seventh, pro rata, any fee or expenses payable to the principal paying
agent, any other paying agent or the calculation agent under the
agency agreement;
o eighth, any costs, charges or expenses, other than fees, incurred by,
and any liabilities owing under any indemnity granted to, the
underwriters, the manager, the security trustee, the servicer, the
note trustee, a paying agent or the calculation agent in relation to
the trust under the transaction documents, for that collection period;
and
o ninth, any amounts payable by the issuer trustee to the currency swap
provider upon the termination of the currency swap.
INTEREST ON THE NOTES
CALCULATION OF INTEREST PAYABLE ON THE NOTES
Up to, and including, the quarterly payment date falling in [ ], the
interest rate for the Class A-1 notes for the related Interest Period will be
equal to LIBOR on the quarterly determination date immediately prior to the
start of that Interest Period plus [ %]. If the issuer trustee has not
redeemed all of the Class A-1 notes by the quarterly payment date falling in
[ ], then the interest rate for each related Interest Period commencing on
or after that date will be equal to LIBOR on the related quarterly
determination date plus [ %]. The interest rate on the Class A-1 notes for
the first Interest Period will be determined on [ ].
Up to, and including, the quarterly payment date falling in [ ], the
interest rate for the Class A-2 notes for the related Interest Period will be
equal to
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LIBOR on the quarterly determination date immediately prior to the start of that
Interest Period plus [ %]. If the issuer trustee has not redeemed all of the
Class A-2 notes by the quarterly payment date falling in [ ], then the
interest rate for each related Interest Period commencing on or after that date
will be equal to LIBOR on the related quarterly determination date plus [ %].
The interest rate on the Class A-2 notes for the first Interest Period will be
determined on [ ].
Up to, and including, the quarterly payment date falling in [ ], the
interest rate for the Class A-3 notes for the related Interest Period will be
equal to LIBOR on the quarterly determination date immediately prior to the
start of that Interest Period plus [ %]. If the issuer trustee has not
redeemed all of the Class A-3 notes by the quarterly payment date falling in
[ ], then the interest rate for each related Interest Period commencing on
or after that date will be equal to LIBOR on the related quarterly
determination date plus [ %]. The interest rate on the Class A-3 notes for
the first Interest Period will be determined on [ ].
The interest rate for the Class B notes for a particular Interest Period
will be equal to the Three Month Bank Bill Rate on the quarterly determination
date immediately prior to the start of that Interest Period plus a margin.
With respect to any payment date, interest on the notes will be calculated
as the product of:
o the outstanding principal balance 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;
o the interest rate for such class of notes for that Interest Period;
and
o a fraction, the numerator of which is the actual number of days in
that Interest Period and the denominator of which is 360 days for the
Class A notes, or 365 days for the Class B notes.
A note will stop earning interest on any date on which the Stated Amount
of the note is zero or, if the Stated Amount of the note is not zero on the due
date for redemption of the note, then on the due date for redemption, unless
payment of principal is improperly withheld or refused, following which the
note will continue to earn interest until the later of the date on which the
note trustee or principal paying agent receives the moneys in respect of the
notes and notifies the holders of that receipt or the date on which the Stated
Amount of the note has been reduced to zero.
A note will begin earning interest again from and including any date on
which its Stated Amount becomes greater than zero.
CALCULATION OF LIBOR
On the second banking day in London and New York before the beginning of
each Interest Period, the calculation agent will determine LIBOR for the next
Interest Period.
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EXCESS AVAILABLE INCOME
GENERAL
On each quarterly determination date, the manager must determine the
amount, if any, by which the Total Available Funds for the quarterly collection
period ending immediately prior to that quarterly determination date exceed the
Total Payments for that same quarterly collection period.
DISTRIBUTION OF EXCESS AVAILABLE INCOME
On each quarterly determination date, the manager must apply any Excess
Available Income for the related quarterly collection period in the following
order of priority:
o first, to reimburse all Principal Charge Offs for that quarterly
collection period;
o second, pro rata between themselves, based on the Redraw Principal
Outstanding and the A$ Equivalent of the Stated Amount of the Class A
notes:
o to pay the currency swap provider the A$ Equivalent of any
Carryover Class A Charge Offs; and
o to repay the redraw facility, as a reduction of, and to the
extent of, any Carryover Redraw Charge Offs;
o third, to repay all principal draws which have not been repaid as of
that quarterly payment date;
o fourth, as a payment to the Class B noteholders in or towards
reinstating the Stated Amount of the Class B notes to the extent of
any Carryover Class B Charge Offs;
o fifth, at the direction of the manager, to pay the residual
beneficiary any remaining Excess Available Income.
The issuer trustee shall make a payment described in the preceding clauses
only if the manager directs it in writing to do so and only to the extent that
any Excess Available Income remains from which to make the payment after
amounts with priority to that payment have been distributed.
Any amount applied pursuant to the first five clauses above will be
treated as Principal Collections.
Once distributed to the residual beneficiary, any Excess Available Income
will not be available to the issuer trustee to meet its obligations in respect
of the trust in subsequent periods unless there has been a manifest error in
the relevant calculation of the amount distributed to the residual beneficiary.
The issuer trustee will not be entitled or required to accumulate any surplus
funds as security for any future payments on the notes.
GROSS PRINCIPAL COLLECTIONS
On each determination date, the manager must determine Gross Principal
Collections for the collection period ending immediately prior to that
determination date. GROSS PRINCIPAL COLLECTIONS are the sum of:
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o all amounts received by or on behalf of the issuer trustee from or on
behalf of borrowers under the housing loans in accordance with the
terms of the housing loans during that collection period in respect of
principal, including principal prepayments;
o all other amounts received by or on behalf of the issuer trustee under
or in respect of principal under the housing loans and related
security and other rights with respect thereto during that collection
period, including:
o amounts on account of principal recovered from the enforcement of
a housing loan, other than under a mortgage insurance policy; and
o any payments by the seller to the issuer trustee on the
repurchase of a housing loan under the master trust deed during
that collection period which are attributable to principal;
o any amount paid to the issuer trustee by the seller equal to the
amount of any interest which would be payable by the seller to a
borrower on a housing loan on amounts standing to the credit of
the borrower's loan offset account if interest was payable on
that account to the extent attributable to principal on the
housing loan;
o all amounts received by or on behalf of the issuer trustee during that
collection period from the mortgage insurer, pursuant to a mortgage
insurance policy, or any provider of a support facility, other than
the currency swap, under the related support facility and which the
manager determines should be accounted for in respect of a Principal
Loss;
o all amounts received by or on behalf of the issuer trustee during that
collection period:
o from the seller, the servicer, the manager, AXA Trustees Limited,
in its personal capacity, or the custodian in respect of any
breach of a representation, warranty or undertaking contained in
the transaction documents, and in the case of AXA Trustees
Limited and the manager, in respect of a breach of which it is
not entitled to be indemnified out of the assets of the trust;
and
o from the seller, the servicer, the indemnifier, the manager or
the custodian under any obligation under the transaction
documents to indemnify or reimburse the issuer trustee for any
amount or from AXA Trustees Limited, in its personal capacity,
under any obligation under the transaction documents to indemnify
the trust,
in each case, which the manager determines to be in respect of
principal payable under the housing loans and related mortgages;
o 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 assets of the trust, including the A$ Equivalent of any amount
received by the issuer trustee on the issue of the notes which was not
used to purchase a housing loan, and which the manager determines is
surplus to the requirements of the trust;
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o any amount of Excess Available Income to be applied to pay a Principal
Charge Off or a carryover charge off on a note;
o any amount of Excess Available Income to be applied to repay Principal
Draws made on a previous payment date; and
o any amount released from the liquidity account because of a reduction
in the liquidity reserve amount.
On the closing date, the sum of the A$ Equivalent of the total initial
outstanding principal amount of the Class A notes and the total initial
outstanding principal amount of the Class B 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
will be passed through to noteholders on the first quarterly payment date.
PRINCIPAL COLLECTIONS for a collection period means:
o the Gross Principal Collections for that collection period; less
o any amounts deducted by or paid to the seller in that collection
period to reimburse redraws funded by the seller for which the seller
has not previously been reimbursed; less
o any amounts paid by the issuer trustee to replace a housing loan.
PRINCIPAL DISTRIBUTIONS
MONTHLY
On any monthly payment date in accordance with the calculations,
instructions and directions provided to it by the manager, the issuer trustee
must distribute or cause to be distributed out of Principal Collections, in
relation to the monthly collection period ending immediately before that
monthly payment date, the following amounts in the following order of priority:
o first, repayment to the mortgage insurer of any payment in the nature
of principal received from a borrower for which the mortgage insurer
previously paid under the relevant mortgage insurance policy by way of
a timely payment cover;
o second, to allocate to Total Available Funds any principal draw;
o third, to retain in the collection account as a provision such amount
as the manager determines is appropriate to make for any anticipated
shortfalls in Total Payments on the following monthly payment date or
quarterly payment date; and
o fourth, subject to the limits described under "Description of the
Transaction Documents -- The Redraw Facility", to repay all Redraw
Principal Outstanding under the redraw facility on the payment date.
QUARTERLY
On each quarterly payment date, and in accordance with the calculations,
instructions and directions provided to it by the manager, the issuer trustee
must
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distribute or cause to be distributed out of Principal Collections, in relation
to the quarterly collection period ending immediately before that quarterly
payment date, the following amounts in the following order of priority:
o first, repayment to the mortgage insurer of any payment in the nature
of principal received from a borrower for which the mortgage insurer
previously paid under the relevant mortgage insurance policy by way of
a timely payment cover;
o second, to allocate to Total Available Funds any principal draws;
o third, to retain in the collection account as a provision, such amount
as the manager determines is appropriate to make up for any
anticipated shortfalls in Total Payments on the following monthly
payment date or quarterly payment date;
o fourth, subject to the limits described under "Description of the
Transaction Documents - The Redraw Facility", to repay any redraws
provided by the seller in relation to housing loans to the extent that
it has not previously been reimbursed in relation to those redraws;
o fifth, to repay all Redraw Principal Outstanding under the redraw
facility on that payment date;
o sixth, to retain in the collection account as a provision to reimburse
further redraws an amount equal to the Redraw Retention Amount for the
next quarterly collection period;
o seventh, as a payment to the currency swap provider under the
confirmation relating to the Class A-1 notes, an amount equal to the
lesser of:
o the remaining amount available for distribution; and
o the A$ Equivalent of outstanding principal balance of all Class
A-1 notes,
which is thereafter to be applied as payments of principal on the Class A-1
notes;
o eighth, as a payment, to the currency swap provider under the
confirmation relating to the Class A-2 notes, of an amount equal to
the lesser of:
o the remaining amount available for distribution; and
o the A$ Equivalent of outstanding principal balance of all Class
A-2 notes,
which is thereafter to be applied as payments of principal on the Class A-2
notes;
o ninth, as a payment, to the currency swap provider under the
confirmation relating to the Class A-3 notes, of an amount equal to
the lesser of:
o the remaining amount available for distribution; and
o the A$ Equivalent of outstanding principal balance of all Class
A-3 notes,
which is thereafter to be applied as payments of principal on the Class
A-3 notes; and
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o tenth, as a payment to the Class B noteholders of principal on the
Class B notes, an amount equal to the lesser of:
o the remaining amount available for distribution; and
o the outstanding principal balance of all Class B notes;
o eleventh, on the business day immediately following the date on which
all Secured Moneys are fully and finally repaid, and only after
payment of all amounts referred to in the preceding clauses, the
issuer trustee must pay remaining Principal Collections to the seller
in reduction of the principal outstanding under the loan from the
seller to the issuer trustee, if any, for the purchase of the housing
loans, as a full and final settlement of the obligations of the issuer
trustee under that loan.
The issuer trustee shall only make a payment under any of the first ten
bullet points above if the manager directs it in writing to do so and only to
the extent that any Principal Collections remain from which to make the payment
after amounts with priority to that payment have been distributed.
REDRAWS
The seller, after receiving confirmation that it may do so from the
manager, may make redraws to borrowers under the housing loans. The issuer
trustee and the manager irrevocably authorize the seller to deduct from Gross
Principal Collections to reimburse itself for any redraw for which it has not
previously been reimbursed.
On each quarterly determination date the manager shall determine an
amount, not to exceed [2]% of the outstanding principal balance of the notes,
which it reasonably anticipates will be required in the following quarterly
collection period to fund further redraws under housing loans in addition to
any prepayments of principal that it anticipates will be received from
borrowers during that quarterly collection period. The manager shall on the day
of such determination advise the issuer trustee of the amount so determined.
In addition to the seller's right of reimbursement, the issuer trustee
shall, on each business day it receives a direction from the manager to do so,
reimburse the seller for redraws made on or before that business day for which
it has not yet received reimbursements but only to the extent of the aggregate
of:
o the Redraw Retention Amount for that quarterly collection period to
the extent it has been funded; and
o any amount which the manager is entitled to direct the issuer trustee
to draw under the redraw facility at that time.
If the manager determines on any business day that there is a Redraw
Shortfall, the manager may on that date direct the issuer trustee in writing to
make a drawing under the redraw facility on that business day or any other
business day equal to the amount which the issuer trustee is permitted to draw
under the terms of the redraw facility at that time.
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APPLICATION OF PRINCIPAL CHARGE OFFS
ALLOCATING LIQUIDATION LOSS
On each quarterly determination date, the manager must determine the
following, in relation to the aggregate of all Liquidation Losses arising
during the related quarterly collection period:
o the amount of those Liquidation Losses which are Finance Charge
Losses; and
o the amount of those Liquidation Losses which are Principal Losses.
The characterization of Liquidation Losses will be made on the basis that all
amounts recovered from the enforcement of housing loans actually received by or
on behalf of the issuer trustee are applied first against interest, fees and
other enforcement expenses, other than expenses related to property
restoration, relating to that housing loan, and then against the principal
outstanding on the housing loan and expenses related to property restoration
relating to that housing loan.
INSURANCE CLAIMS
If, on any monthly determination date, the manager determines that there
has been a Liquidation Loss in relation to a housing loan during the
immediately preceding monthly collection period, the manager shall direct the
servicer, promptly, and in any event so that the claim is made within the time
limit specified in the relevant mortgage insurance policy without the amount of
the claim becoming liable to be reduced by reason of delay, to make a claim
under that mortgage insurance policy if it has not already done so. The manager
will use its best efforts to ensure that the servicer promptly makes any claims
required by way of a timely payment cover in accordance with the terms of the
servicing agreement.
Upon receipt of any amount under a claim, the manager must determine which
part of the amount is attributable to interest, fees and other amounts in the
nature of income, and which part of the amount is attributable to principal.
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 the following:
o the maximum amount available under the mortgage insurance policy has
been exhausted;
o the mortgage insurance policy has been terminated in respect of that
housing loan;
o the mortgage insurer is entitled to reduce the amount of the claim; or
o the mortgage insurer defaults in payment of a claim;
then a MORTGAGE SHORTFALL will arise if:
o the total amount recovered and recoverable under the mortgage
insurance policy attributable to principal; plus
o any damages or other amounts payable by the seller or the servicer
under or in respect of the master trust deed, the supplementary terms
notice or the
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servicing agreement relating to the housing loan which the manager
determines to be on account of principal, is insufficient to meet the full
amount of the Principal Loss.
The aggregate amount of all Mortgage Shortfalls for a collection period
will be applied to reduce the Stated Amounts of the notes as described in the
following subsection.
PRINCIPAL CHARGE OFFS
If the Principal Charge Offs for any quarterly collection period exceed
the Excess Available Income calculated on the quarterly determination date for
that quarterly collection period, the manager must do the following, on and
with effect from the quarterly payment date immediately following the end of
the quarterly collection period:
o reduce pro rata as between themselves the Stated Amount of the Class B
notes by the amount of that excess until the Stated Amount of the
Class B notes is zero; and
o if the Stated Amount of the Class B notes is zero and any amount of
that excess has not been applied under the preceding paragraph, reduce
pro rata as between the Class A notes and the redraw facility with
respect to the balance of that excess:
o pro rata as between each of the Class A notes, the Stated Amount
of each of the Class A notes, until the Stated Amount of that
Class A note is zero; and
o the Redraw Principal Outstanding under the redraw facility,
applied against draws under the redraw facility in reverse
chronological order of their drawdown dates, until the Redraw
Principal Outstanding is zero.
PAYMENTS INTO US$ ACCOUNT
The principal paying agent shall open and maintain a US$ account into
which the currency swap provider shall deposit amounts denominated in US$. The
issuer trustee shall direct the currency swap provider to pay all amounts
denominated in US$ payable to the issuer trustee by the currency swap provider
under the currency swap into the US$ account or to the principal paying agent
on behalf of the issuer trustee. If any of the issuer trustee, the manager or
the servicer receives any amount denominated in US$ from the currency swap
provider under the currency swap, they will also promptly pay that amount to
the credit of the US$ account.
PAYMENTS OUT OF US$ ACCOUNT
The principal paying agent, on behalf of the issuer trustee and acting at
the direction of the manager, will distribute the following amounts from the
US$ account in accordance with the note trust deed and the agency agreement on
each payment date pro rata between the relevant notes and to the extent
payments relating to the following amounts were made to the currency swap
provider:
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o interest on the Class A-1 notes, the Class A-2 notes and the Class A-3
notes;
o reinstating the Stated Amount of the Class A notes, to the extent of
Carryover Class A Charge Offs;
o principal on the Class A-1 notes, until their outstanding principal
balance is reduced to zero;
o principal on the Class A-2 notes, until their outstanding principal
balance is reduced to zero; and
o principal on the Class A-3 notes, until their outstanding principal
balance is reduced to zero.
THE INTEREST RATE SWAPS
FIXED-FLOATING RATE SWAP
The issuer trustee will enter into a swap governed by an ISDA Master
Agreement, as amended by a supplementary schedule and confirmed by a written
confirmation, with the fixed-floating rate swap provider and the standby
fixed-floating rate swap provider to hedge the basis risk between the interest
rate on the fixed rate housing loans and the floating rate obligations of the
trust, including the interest due on the notes. The fixed-floating rate swap
will cover the housing loans which bear a fixed rate of interest as of the
cut-off date and those variable rate housing loans which at a later date
convert to a fixed rate of interest. The obligations of the fixed-floating rate
swap provider are supported by the standby fixed-floating rate swap provider.
The issuer trustee will pay the fixed-floating rate swap provider on each
quarterly payment date an amount equal to the sum of the principal balance of
each of the housing loans, including housing loans that are delinquent, which
is subject to a fixed rate of interest at the beginning of the quarterly
collection period immediately preceding that quarterly payment date, multiplied
by the weighted average of those fixed rates of interest at the beginning of
that quarterly collection period times the actual number of days in the
quarterly collection period divided by 365. The issuer trustee will also pay
the fixed-floating rate swap provider all break fees from borrowers with fixed
rate loans received during the related quarterly collection period.
The issuer trustee will receive from the fixed-floating rate swap provider
an amount equal to the principal balance of each of the housing loans which is
subject to a fixed rate of interest at the beginning of the quarterly
collection period immediately preceding that quarterly payment date multiplied
by the Three Month Bank Bill Rate plus a fixed margin. The margin is fixed for
the term of the swap and will be set based on the obligations of the trust. The
terms of the fixed-floating rate swap allow for netting of swap payments for
transactions under the one confirmation.
The fixed-floating rate swap, including the obligations of the standby
fixed-floating rate swap provider, commences on the date specified in the
relevant confirmation and terminates on the final maturity date of the notes,
unless terminated earlier in accordance with the fixed-floating rate swap.
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BASIS SWAP
The issuer trustee will enter into a swap governed by an ISDA Master
Agreement, as amended by a supplementary schedule and confirmed by a written
confirmation, with the basis swap provider and the standby basis swap provider
to hedge the basis risk between the discretionary interest rate applicable on
the variable rate housing loans and the floating rate obligations of the trust
to the currency swap provider. The basis swap will cover the housing loans
which bear a variable rate of interest as of the cut-off date and those fixed
rate housing loans which at a later date convert to a variable rate of
interest.
The issuer trustee will pay the basis swap provider on each quarterly
payment date an amount based on the applicable daily weighted average of the
variable rate on those housing loans which are subject to a variable rate of
interest and receive from the basis swap provider the applicable Three Month
Bank Bill Rate plus a fixed margin. The margin is fixed for the term of the
swap and will be set based on the obligations of the trust. The terms of the
basis swap allow for netting of swap payments for transactions under the one
confirmation.
The basis swap commences on the date specified in the relevant
confirmation and terminates on the date 364 days later unless the basis swap
provider extends the swap in accordance with the terms of the basis swap. The
obligations of the standby basis swap provider commence on the same day as the
basis swap and terminate 364 days later, unless extended by the standby basis
swap provider in accordance with the basis swap, with the consent of the basis
rate swap provider.
APPLICATION OF INCREASED INTEREST
After the interest rates on the notes increase after the quarterly payment
date in [ ], the manager must not direct the issuer trustee to enter into or
extend a swap confirmation unless the manager is of the opinion that the
amounts payable by the relevant swap provider to the issuer trustee in relation
to that confirmation are calculated with reference to that increased interest
rate.
STANDBY ARRANGEMENT
If a swap provider is obligated to make a payment under a swap and the
relevant standby swap provider receives notice from the manager requiring the
standby swap provider to make the required payment, the standby swap provider
will make the standby payment specified in the notice.
The standby basis swap provider is only obligated to make one payment
relating to the basis swap. After that payment, the basis swap will be
terminated. The standby fixed-floating rate swap provider is obligated to make
all the remaining payments under the fixed-floating rate swap that the
fixed-floating rate swap provider fails to make.
THRESHOLD RATE
If at any time the basis swap is terminated, the manager must, on the
earlier of three business days after the termination and the determination date
immediately
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following the termination, calculate the threshold rate as of that date and
notify the issuer trustee, the servicer and the seller of the threshold rate on
the relevant payment date. The threshold rate means, at any time, [ %] per
annum plus the minimum rate of interest that must be set on all of the housing
loans, where permitted under the related loan agreements, which will be
sufficient, assuming that all of the parties to the transaction documents and
the housing loans comply with their obligations under the transaction documents
and the housing loans, when aggregated with the income produced by the rate of
interest on all other housing loans, to ensure that the issuer trustee will
have sufficient collections to enable it to meet all of the obligations of the
trust, including the repayment of any principal draws. The manager must also
set the rate on the housing loans, where permitted under the related loan
agreement, at the threshold rate for each successive determination date for so
long as the basis swap has not been replaced by a similar interest hedge, or
until the issuer trustee and manager agree that the interest rate on the
variable rate housing loans no longer needs to be set at the threshold rate,
and that does not result in a downgrading of the notes.
If the servicer is notified by the manager of the threshold rate, it will,
not more than seven business days after termination of the basis swap, ensure
that the interest rate payable on each variable rate housing loan is set at a
rate not less than the threshold rate, and will promptly notify the relevant
borrowers of the change in accordance with the housing loans.
BASIS SWAP DOWNGRADE
If either:
o the standby basis swap provider's rating falls below:
o a long term rating of AA- and a short term credit rating of A-1+
by Standard & Poor's;
o a short term credit rating by Moody's of Prime-1; or
o a short term rating by Fitch of F1+; or
o the standby basis swap provider does not extend its obligations under
the basis swap and the basis swap provider receives notice from the
manager that any rating agency proposes to, or has, reduced the rating
assigned to the notes, the basis swap provider is required, at its
cost, to do one of the following:
o deposit a cash collateral amount into a cash collateral account;
o replace the standby basis swap provider with a party that has a rating
greater than or equal to A-1+ by Standard & Poor's and F1+ by Fitch
and who is suitably rated so that its appointment as standby basis
swap provider does not result in a downgrade of the notes by Moody's;
o replace itself as basis swap provider with a party whose appointment
has been confirmed in writing by each rating agency as not resulting
in a note downgrade and who the standby basis swap provider has
approved in writing; or
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o enter into an arrangement which each rating agency confirms in writing
will reverse or avoid any note downgrade,
provided that where the standby basis swap provider or the notes have been or
will be downgraded by Standard & Poor's, and the basis swap provider has a
rating of less than long term A- and short term A-1 by Standard & Poor's, no
cash collateralisation is allowed.
If the basis swap provider, where required to do so, does not comply with
the above within the relevant time limit set out below, the standby basis swap
provider, at its cost, must do so.
In the case of a standby basis swap provider downgrade, where the standby
basis swap provider is downgraded to a rating of less than long term A- and
short term A-1 by Standard & Poor's, short term Prime-2 by Moody's, or short
term F1 by Fitch, the relevant time limit is 5 business days. In the case of
any other standby basis swap provider downgrade, the relevant time limit is 30
business days.
In the case of a note downgrade, where the basis swap provider has a long
term rating by Standard & Poor's of less than A- and a short term rating by
Standard & Poor's of less than A-1 then, the relevant time limit is 5 business
days, otherwise the time limit is 30 business days.
FIXED-FLOATING RATE SWAP DOWNGRADE
If the standby fixed-floating rate swap provider's rating falls below:
o a long term rating of AA- and a short term credit rating of A-1+ by
Standard & Poor's;
o a long term credit rating by Moody's of less than A2; or
o a short term rating by Fitch of less than F1+,
the fixed-floating rate swap provider is required, at its cost to do one of the
following:
o deposit a cash collateral amount into a cash collateral account;
o replace the standby fixed-floating rate swap provider with a party
that has a rating greater than or equal to A-1+ by Standard & Poor's
and F1+ by Fitch and who is suitably rated so that its appointment as
standby fixed-floating rate swap provider does not result in a
downgrade of the notes by Moody's;
o replace itself as fixed-floating rate swap provider with a party whose
appointment has been confirmed, in writing, by each rating agency as
not resulting in a note downgrade and who the standby fixed-floating
swap provider has approved in writing; or
o enter into an arrangement which each relevant rating agency confirms,
in writing will reverse or avoid any note downgrade,
provided that where the standby fixed-floating rate swap provider has been
downgraded by Standard & Poor's, and the fixed-floating rate swap provider has a
rating of less than long term A- and less than short term A-1 by Standard &
Poor's, no cash collateralisation is allowed.
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If the fixed-floating rate swap provider, where required to do so, does
not comply with the above, within the relevant time limit set out below, the
standby fixed-floating rate swap provider must, at its cost, do so.
Where the standby fixed-floating swap provider is downgraded to a rating
of less than long term A- and short term A-1 by Standard & Poor's, less than
long term A3 by Moody's, or less than short term F1 by Fitch, the relevant time
limit is 5 business days. Otherwise, the relevant time limit is 30 business
days.
SWAP COLLATERAL ACCOUNT
If a swap provider or standby swap provider provides cash collateral to
the issuer trustee, the manager must direct the issuer trustee, and the issuer
trustee must as soon as is practicable:
o establish and maintain in the name of the issuer trustee a swap
collateral account with an Approved Bank having a short-term credit
rating of A-1+ from Standard & Poor's and F1+ from Fitch IBCA and who
is suitably rated by Moody's such that the deposit does not cause a
downgrade or withdrawal of the rating of any notes, or which otherwise
satisfies the requirements of the rating agencies; and
o the swap provider or the standby swap provider must deposit the cash
collateral in the swap collateral account.
The issuer trustee may only make withdrawals from the swap collateral
account upon the direction of the manager and only for the purpose of:
o entering into a substitute swap;
o refunding to that swap provider the amount of any reduction in the
swap collateral amount, but only if the ratings of the notes are not
thereby withdrawn or reduced;
o withdrawing any amount which has been incorrectly deposited into the
swap collateral account;
o paying financial institutions duty, bank accounts debit tax or
equivalent taxes payable in respect of the swap collateral account; or
o funding the amount of any payment due to be made by that swap provider
under the relevant swap following the failure by that swap provider to
make that payment.
STANDBY SWAP FEES
The standby swap providers will receive a standby swap fee. These fees
accrue from day to day and are payable quarterly in arrears on each quarterly
payment date.
INDEMNITY
Each swap provider agrees to indemnify the standby swap providers against
any loss, charge, liability or expense that the standby swap providers may
sustain or incur
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as a direct or indirect consequence of the relevant swap provider's failure to
comply with its obligations under a swap, or the manager requiring that standby
swap provider to make a payment under the swap.
STANDBY SWAP PROVIDERS
The standby fixed-floating rate swap provider and standby basis swap
provider will be Deutsche Bank AG, Sydney Branch. In Australia, Deutsche Bank
AG, Sydney Branch, is registered as a foreign company with Australian
Registered Body Number 064 165 162. Deutsche Bank AG has had a presence in
Australia since 1973 and was granted an Australian banking license under the
Banking Act 1959 in 1986 through its subsidiary, Deutsche Bank Australia
Limited. Deutsche Bank AG was granted an Authority to Carry on Banking Business
in Australia under the Banking Act 1959 and commenced operations in Sydney and
Melbourne on July 1, 1994. Simultaneously, Deutsche Bank Australia Limited
relinquished its banking licence, with operations continuing through the new
branch and various non-bank subsidiaries. Deutsche Bank AG, Sydney Branch, is a
full branch of Deutsche Bank AG and not a separate legal entity. The branch has
full access to the capital of Deutsche Bank AG. The long term unsecured senior
debt of Deutsche Bank AG has been assigned a rating of AA by Fitch IBCA, AA by
Standard & Poor's and Aa3 by Moody's.
THE CURRENCY SWAP
Collections on the housing loans and under the basis swap and the
fixed-floating rate swap will be denominated in Australian dollars. However,
the payment obligations of the issuer trustee on the notes are denominated in
United States dollars. To hedge its currency exposure, the issuer trustee will
enter into a swap agreement with the currency swap provider.
The currency swap comprises three distinct swap transactions, relating to
the Class A-1 notes, the Class A-2 notes and the Class A-3 notes, respectively.
The three swap transactions are separate and several, which means, for example,
that any termination of one of them does not necessarily give rise to a right
to terminate the other. The currency swap will be governed by a standard form
ISDA Master Agreement, as amended by a supplementary schedule and confirmed by
three written confirmations, one relating to each class of Class A notes.
Under the currency swap, the issuer trustee will pay to the currency swap
provider on each quarterly payment date an amount in Australian dollars equal
to that portion of Principal Collections and Excess Available Income, if any,
to be paid to the noteholders as a payment of principal on the Class A notes as
described in "Description of the Class A Notes -- Payments of Principal on the
Notes," and the currency swap provider is required to pay to, or at the
direction of, the issuer trustee an amount denominated in United States dollars
which is equivalent to such Australian dollar payment. The equivalent United
States dollar payment will be calculated using an exchange rate of
US$[ ]=A$1.00, which is fixed for the term of the currency swap.
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In addition, under the currency swap on each quarterly payment date the
issuer trustee will pay to the currency swap provider the A$ Class A Interest
Amount and the currency swap provider will pay to the principal paying agent an
amount equal to the interest payable in US$ to the Class A noteholders.
If on any quarterly payment date, the issuer trustee does not or is unable
to make the full floating rate payment, the US$ floating rate payment to be
made by the currency swap provider on such quarterly payment date will be
reduced by the same proportion as the reduction in the payment from the issuer
trustee.
The purchase price for the notes will be paid by investors in United
States dollars, but the consideration for the purchase by the issuer trustee of
equitable title to the housing loans will be in Australian dollars. On the
closing date, the issuer trustee will pay to the currency swap provider the net
proceeds of the issue of the notes in United States dollars. In return the
issuer trustee will be paid by the currency swap provider the A$ Equivalent of
that United States dollar amount.
TERMINATION BY THE CURRENCY SWAP PROVIDER
The currency swap provider shall have the right to terminate the currency
swap in the following circumstances:
o if the issuer trustee fails to make a payment under the currency swap
within ten business days of its due date;
o an Insolvency Event with respect to the issuer trustee occurs or the
issuer trustee merges into another entity without that entity properly
assuming responsibility for the obligations of the issuer trustee
under the currency swap;
o if due to a change in law it becomes illegal for the issuer trustee to
make or receive payments or comply with any other material provision
of the currency swap, the currency swap requires such party to make
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 or withdrawal of the rating of the
notes. If those efforts are not successful, then the currency swap
provider will have the right to terminate the currency swap. 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; or
o the currency swap provider has the limited right to terminate where,
due to an action of a taxing authority or a change in tax law, it is
required to gross-up payments or receive payments from which amounts
have been withheld, but only if all of the notes will be redeemed at
their outstanding principal balance or, if the noteholders have so
agreed, at their Stated Amount, plus, in each case, accrued interest.
TERMINATION BY THE ISSUER TRUSTEE
There are a number of circumstances in which the issuer trustee has the
right to terminate the currency swap. In each of these cases it is only
permitted to exercise that right with the prior written consent of the note
trustee:
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o where the currency swap provider fails to make a payment under the
currency swap within ten business days of its due date or the currency
swap provider becomes insolvent or merges into another entity without
that entity properly assuming responsibility for the obligation of the
currency swap provider under the currency swap;
o if due to a change in law it becomes illegal for the currency swap
provider to make or receive payments or comply with any other material
provision of the currency swap, the currency swap requires such party
to make 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 or withdrawal of the rating
of the notes. If those efforts are not successful, then the issuer
trustee 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;
o if the issuer trustee becomes obligated to make a withholding or
deduction in respect of the Class A notes and the Class A notes are
redeemed as a result; or
o if the currency swap provider breaches any obligation to deposit cash
collateral with the issuer trustee or novate or enter into another
arrangement required by the rating agencies in accordance with the
currency swap in the event it is downgraded.
The issuer trustee may only terminate the currency swap with the prior
written consent of the note trustee. Each party may terminate the currency swap
only after consulting with the other party as to the timing of the termination.
The issuer trustee will exercise such right to terminate at the direction of
the manager. The currency swap provider acknowledges that the issuer trustee
has appointed the manager as manager of the trust and may exercise or satisfy
any of the issuer trustee's rights or obligations under the currency swap
including entering into and monitoring transactions and executing
confirmations.
CURRENCY SWAP DOWNGRADE
If, as a result of the withdrawal or downgrade of its credit rating by any
of the relevant rating agencies, the currency swap provider does not have
either a long term credit rating of at least AA- by Standard & Poor's or a
short term credit rating of at least A-1+ by Standard & Poor's, and a long term
credit rating of at least A2 by Moody's and a long term rating of at least AA-
by Fitch, and, in the case of Moody's or Fitch, such a downgrade would, except
for this clause adversely affect the rating of the notes, the currency swap
provider shall within:
o 30 Business Days of a downgrade of its long term credit rating by
Standard & Poor's to not lower than A- together with a downgrade of
its short term credit rating by Standard & Poor's to not lower than
A-1, or the downgrade of its long term credit rating by Moody's to not
lower than A3, or a downgrade of its long term credit rating by Fitch
to not lower than A-; or
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o 5 Business Days of any other such withdrawal or downgrade,
or, in either case, such greater period as is agreed to in writing by the
relevant rating agency, at its cost and at its election:
o in the situation described in bullet point one above only, lodge a
cash collateral amount in US$ with an Approved Bank outside Australia;
or
o enter into an agreement novating the currency swap to a replacement
counterparty proposed by any of the currency swap provider, the issuer
trustee or the manager, if any, and which each rating agency has
confirmed will result in there not being a withdrawal or downgrade of
any credit rating assigned by it to the notes; or
o enter into such other arrangements which each rating agency has
confirmed will result in there not being a withdrawal or downgrade of
any credit rating assigned by it to the notes.
In this section, Approved Bank means a bank which has a short-term rating
of at least A-1+ from Standard & Poor's, P-1 from Moody's and F1+ from Fitch
IBCA.
TERMINATION PAYMENTS
On the date of termination of the currency swap, a termination payment
will be due from the issuer trustee to the currency swap provider or from the
currency swap provider to the issuer trustee. The termination of a currency
swap is an event of default under the security trust deed unless the currency
swap is terminated by the currency swap provider as a result of a call
exercised by the issuer trustee in respect of the Class A 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 provider 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 THE CURRENCY SWAP
If the currency swap is terminated, the issuer trustee must, at the
direction of the manager, enter into one or more replacement currency swaps
which replace the currency swap, but only on the condition that:
o the termination payment, if any, which is payable by the issuer
trustee to the currency swap provider on termination of the currency
swap will be paid in full when due in accordance with the
supplementary terms notice and the currency swap;
o the ratings assigned to the Class A notes are not adversely affected;
and
o the liability of the issuer trustee under that replacement currency
swap is limited to at least the same extent that its liability is
limited under the currency swap.
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If the preceding conditions are satisfied, the issuer trustee must, at the
direction of the manager, enter into the replacement currency swap, and if it
does so it must direct the provider of the replacement currency swap to pay any
up-front premium to enter into the replacement currency swap due to the issuer
trustee directly to the currency swap provider in satisfaction of and to the
extent of the issuer trustee's obligation to pay the termination payment to the
currency swap provider. To the extent that such premium is not greater than or
equal to the termination payment, the balance must be paid by the issuer
trustee as a Trust Expense.
CURRENCY SWAP PROVIDER
The currency swap provider will be Bankers Trust Corporation, unless
Bankers Trust Corporation elects to novate the currency swap as described in
"Novation of the Currency Swap" below. Bankers Trust Corporation is a bank
holding company incorporated under the laws of the State of New York in 1965.
Bankers Trust Corporation's principal executive offices are located at 130
Liberty Street, New York, New York 10006 and its telephone number is (212)
250-2500. Bankers Trust Corporation has a long term rating of AA- from Fitch
IBCA, A1 from Moody's and AA- from Standard & Poor's, and a short term rating
of A-1+ from Standard & Poor's.
[On June 4, 1999, Deutsche Bank AG acquired all of the outstanding shares
of common stock of Bankers Trust Corporation from its shareholders at a price
of U.S.$93.00 per share. Bankers Trust Corporation was merged with a
wholly-owned subsidiary of Deutsche Bank AG, with Bankers Trust Corporation as
the surviving entity. In connection with the acquisition, Bankers Trust
Corporation has substantially changed the scope and nature of its business
activities to conform to Deutsche Bank AG's management structure. As part of
this process, Bankers Trust Corporation has transferred and will continue to
transfer certain entities and financial assets and liabilities to Deutsche Bank
AG and its affiliates. The consideration received and to be received for these
transactions was and will be the fair market value of the financial assets and
liabilities at and on the date of transfer.]
[Insert relevant financial information.]
Bankers Trust Corporation currently files periodic reports with the
Securities and Exchange Commission pursuant to the Exchange Act.
[NOVATION OF THE CURRENCY SWAP
Bankers Trust Corporation may at any time novate (a form of legal
transfer) its rights and obligations under the currency swap, without the prior
consent of any other party, to any affiliate of Deutsche Bank AG, provided
that:
(a) the new currency swap provider is obligated to file periodic reports
with the Securities and Exchange Commission pursuant to the Exchange
Act;
(b) the new currency swap provider provides a legal opinion to the issuer
trustee that the currency swap, as novated, is valid, binding and
enforceable, subject to equitable doctrines and creditor's rights
generally; and
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(c) the rating agencies confirm that the novation will not cause a
reduction or withdrawal of the ratings of the Class A notes.
The manager will, if required pursuant to the Exchange Act, file a copy of
any amended currency swap or replacement currency swap agreement with the
Securities and Exchange Commission.]
WITHHOLDING OR TAX DEDUCTIONS
All payments in respect of the notes will be made without withholding or
tax deduction for, or on account of, any present or future taxes, duties or
charges of whatever nature unless the issuer trustee or any paying agent is
required by applicable law to make any such payment in respect of the notes
subject to any withholding or deduction for, or on account of, any present or
future taxes, duties or charges of whatsoever nature. In the event that the
issuer trustee or the paying agents, 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 obligated to make any
additional payments to holders of the notes with respect to that withholding or
deduction.
REDEMPTION OF THE NOTES FOR TAXATION OR OTHER REASONS
If the manager satisfies the issuer trustee and the note trustee,
immediately prior to giving the notice to the noteholders as described in this
section, that either:
o on the next quarterly payment date the issuer trustee would be
required to deduct or withhold from any payment of principal or
interest in respect of the notes or the currency swap 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
o 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;
then the issuer trustee must, when so directed by the manager, at the manager's
option, provided that the issuer trustee will be in a position on such payment
date to discharge, and the manager 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 equal with
such class, redeem all, but not some, of such class at their outstanding
principal balance, or at the option of the holders of 75% of the aggregate
outstanding principal balance of such class, at their Stated Amount, together,
in each case, with accrued interest to the date of redemption on any subsequent
quarterly payment date. Noteholders must be given notice of a redemption not
more than 60 nor less than 45 days prior to the date of redemption. The holders
of 75% of the aggregate outstanding principal balance of a class of notes may
elect, in accordance with the terms of the note trust deed, and the
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note trustee shall notify the issuer trustee and the manager, that they do not
require the issuer trustee to redeem their class of notes in the circumstances
described in this section. All amounts ranking prior to or equal with respect
to a class of notes must be redeemed concurrently with such class.
REDEMPTION OF THE NOTES UPON AN EVENT OF DEFAULT
If an event of default occurs under the security trust deed while the
Class A notes or Class B notes are outstanding, the security trustee may,
subject in some circumstances to the prior written consent of the Noteholder
Mortgagees in accordance with the provisions of the security trust deed, and
will, if so directed by the Noteholder Mortgagees where they are the only
Voting Mortgagees, 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. If the
trust terminates while notes are outstanding, St.George Bank has a right of
first refusal to acquire the housing loans. 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 "Description of the
Transaction Documents -- The Security Trust Deed."
OPTIONAL REDEMPTION OF THE NOTES
At the manager's direction, the issuer trustee must purchase or redeem all
of the notes by repaying the outstanding principal balance, or, if the
noteholders owning at least 75% of the aggregate outstanding amount of the
notes so agree, the Stated Amount, of the notes, together, in each case, with
accrued interest to, but excluding, the date of repurchase or redemption, on
any quarterly payment date falling on or after the earlier of:
o the quarterly payment date on which the total Stated Amount of all
notes is equal to or less than 10% of the total initial outstanding
principal balance of the notes; and
o the quarterly payment date falling in [ ];
provided that the manager certifies to the issuer trustee and the note trustee
that the issuer trustee will be in a position on this quarterly payment date to
discharge all its liabilities in respect of the notes, at their outstanding
principal balance or their Stated Amount if so agreed by the specified
percentage of noteholders, and any amounts which would be required under the
Security Trust Deed to be paid in priority to or equal with the notes if the
security for the notes were being enforced. The manager, on behalf of the
issuer trustee, will give not more than 60 nor less than 45 days' notice to
noteholders of this redemption in accordance with the applicable conditions of
the notes.
FINAL MATURITY DATE
The issuer trustee must pay the Stated Amount in relation to each note on
or by the final maturity date relating to that note. The failure of the issuer
trustee to pay
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the Stated Amount within ten business days of the due date for payment, or
within any other applicable grace period agreed upon with the Mortgagees, will
be an event of default under the security trust deed.
FINAL REDEMPTION OF THE NOTES
Each note will be finally redeemed, and the obligations of the issuer
trustee with respect to the payment of the principal amount of that note will
be finally discharged, upon the first to occur of:
o the date on which the outstanding principal balance of the note is
reduced to zero;
o the date upon which the relevant noteholder renounces in writing all
of its rights to any amounts payable under or in respect of that note;
o the date on which all amounts received by the note trustee with
respect to the enforcement of the security trust deed are paid to the
principal paying agent;
o the payment date immediately following the date on which the issuer
trustee completes a sale and realization of all of the assets of the
trust in accordance with the master trust deed and the supplementary
terms notice; and
o the final maturity date of the notes.
TERMINATION OF THE TRUST
TERMINATION EVENTS
The trust shall continue until, and shall terminate on the later of:
o its Termination Date;
o the date on which the assets of the trust have been sold or realized
upon, which shall be within 180 days after the Termination Date so far
as reasonably practicable and reasonably commercially viable; and
o the date on which the issuer trustee ceases to hold any housing loans
or mortgages in relation to the trust.
REALIZATION OF TRUST ASSETS
On the occurrence of a Termination Date, subject to St.George Bank's right
of first refusal, the issuer trustee, in consultation with the manager or the
beneficiary, to the extent that either has title to the assets of the trust,
must sell and realize the assets of the trust within 180 days. During the
180-day period, performing housing loans may not be sold for less than their
Unpaid Balance, and non-performing housing loans may not be sold for less than
the fair market value of such housing loans and their related security, as
agreed upon by the issuer trustee, based on appropriate expert advice, and the
seller; provided that 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 outstanding principal amount of
the notes. The servicer will determine whether a housing loan is performing or
non-performing.
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SELLER'S RIGHT OF FIRST REFUSAL
As soon as practical after the Termination Date of the trust, the manager
will direct the issuer trustee to offer, by written notice to St.George Bank,
irrevocably to extinguish in favor of St.George Bank, or if the issuer trustee
has perfected its title, to equitably assign to St.George Bank, its entire
right, title and interest in and to the housing loans for their Unpaid Balance,
for performing housing loans, and their fair market value, for non-performing
housing loans; provided that, if the fair market value of a housing loan is
less than its Unpaid Balance, the sale requires the consent of the holders of
75% of the aggregate outstanding principal amount of the notes.
The issuer trustee is not entitled to sell any housing loans unless
St.George Bank has failed to accept the offer within 180 days after the
occurrence of the Termination Date by paying to the issuer trustee the purchase
price. St.George Bank must pay all costs and expenses relating to the
repurchase of any housing loans. If St.George Bank does not accept the offer
within 180 days, the costs and expenses relating to the sale of the housing
loans will be a Trust Expense.
DISTRIBUTION OF PROCEEDS FROM REALIZATION OF TRUST ASSETS
After deducting expenses, the 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 in "Distribution of Total
Available Funds" and "Principal Distributions", and in accordance with any
directions given to it by the manager. If all of the notes have been fully
redeemed and the trust's other creditors have been paid in full, the issuer
trustee shall distribute the assets of the trust to the residual beneficiary.
PRESCRIPTION
A note will be void in its entirety if not surrendered for payment within
ten years of the relevant date in respect of any payment on the note, the
effect of which would be to reduce the Stated Amount of such note to zero. The
relevant date is 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 and
notice to that effect is duly given in accordance with the terms of the
relevant note. After the date on which a note becomes void in its entirety, no
claim may be made in respect of it.
VOTING AND CONSENT OF NOTEHOLDERS
The note trust deed contains provisions for each class of noteholders to
consider any matter affecting their interests. In general, the holders of a
majority of the aggregate outstanding principal balance of a class of notes may
take or consent to any action permitted to be taken by such class of
noteholders under the note trust deed. Notwithstanding the foregoing, the
consent of holders of 75% of the aggregate outstanding principal balance of a
class of notes shall be required to accomplish the following:
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o direct the note trustee to direct the security trustee to enforce the
security under the security trust deed;
o override any waiver by the note trustee of a breach of any provisions
of the transaction documents or an event of default under the security
trust deed;
o removal of the current note trustee or appointment of a new note
trustee; and
o approve the costs and expenses of the note trustee incurred in
enforcing rights under, or prosecuting lawsuits related to, the
transaction documents for which the note trustee is entitled to be
indemnified.
The Class A-1 noteholders, the Class A-2 noteholders and the Class A-3
noteholders will be treated as a single class for voting.
The note trust deed contains provisions limiting the powers of the Class B
noteholders. For example, the document limits their ability to request or
direct the note trustee to take any action that would be materially prejudicial
to the interests of the Class A noteholders. In most 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 outstanding principal balance of a
class of noteholders shall be binding on all noteholders of such class, both
present and future.
REPORTS TO NOTEHOLDERS
On each quarterly determination date, the manager will, in respect of the
collection period ending before that determination date, deliver to the
principal paying agent, the note trustee and the issuer trustee, a noteholder's
report containing the following information:
o the outstanding principal balance and the Stated Amount of each class
of notes;
o the interest payments and principal distributions on each class of
notes;
o the Available Income;
o the Total Available Funds;
o the aggregate of all redraws made during that quarterly collection
period;
o the Redraw Shortfall, if any;
o the Payment Shortfall, if any;
o the principal draw, if any, for that quarterly collection period,
together with all principal draws made before the start of that
quarterly collection period and not repaid;
o the liquidity draw, if any, for that quarterly collection period,
together with all liquidity draws made before the start of that
quarterly collection period and not repaid;
o the Gross Principal Collections;
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o the Principal Collections;
o the Liquidity Shortfall, if any;
o the remaining Liquidity Shortfall, if any;
o the Principal Charge Off, if any;
o the bond factor for each class of notes, which with respect to a class
of notes, means the aggregate of the outstanding principal balance of
the class of notes less all principal payments on that class of notes
to be made on the next quarterly payment date, divided by the
aggregate initial outstanding principal balance for all of that class
of notes;
o the Class A Charge Offs, the Class B Charge Offs and the Redraw Charge
Offs, if any;
o all carryover charge offs on the redraw facility on the notes, if any;
o if required, the threshold rate at that quarterly determination date;
o the interest rates on the notes for the related Interest Period;
o scheduled and unscheduled payments of principal on the housing loans;
o aggregate outstanding principal balance of the fixed rate housing
loans and the aggregate principal balance of the variable rate housing
loans; and
o delinquency and loss statistics with respect to the housing loans.
Unless and until definitive notes are issued, 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.
Unless and until definitive notes are issued, periodic and annual
unaudited reports containing information concerning the trust and the Class A
notes will be prepared by the manager and sent to DTC. DTC and its participants
will make such reports available to holders of interests in the 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 notes are in book-entry form. Upon the issuance of fully registered,
certificated 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 manager will file with the SEC
such periodic reports as are required under the Exchange Act, and the rules and
regulations of the SEC thereunder. However, in accordance with the Exchange Act
and the rules and regulations of the SEC thereunder, the manager expects that
the obligation to file such reports will be terminated following the end of
September, 2001.
DESCRIPTION OF THE TRANSACTION DOCUMENTS
The following summary describes the material terms of the transaction
documents. The summary does not purport to be complete and is subject to the
provisions of the transaction documents. All of the transaction documents,
except for the currency swap and the note trust deed, are governed by the laws
of New South
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Wales, Australia. The currency swap is governed by the laws of the State of New
York. The note trust deed is governed by the laws of New South Wales, Australia
and the administration of the trust is governed by English law. A copy of the
master trust deed and the servicing agreement and a form of each of the other
transaction documents have been filed as exhibits to the registration statement
of which this prospectus is a part.
TRUST ACCOUNTS
The issuer trustee will establish and maintain the collection account and
the liquidity account with an Approved Bank. The collection account and
liquidity account will initially be established with Australia & New Zealand
Banking Group Limited, which has a short term rating of F1+ from Fitch IBCA,
P-1 from Moody's and A-1+ from Standard & Poor's at its office at Level 2, 570
Church Street, Richmond, Victoria 3121. Each bank account shall be opened by
the issuer trustee in its name and in its capacity as trustee of the trust.
These accounts will not be used for any purpose other than for the trust. These
accounts will be interest bearing accounts.
The manager shall have the discretion and duty to recommend to the issuer
trustee, in writing, 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 assets of the
trust shall be effected and when and how the same should be effected. Each
investment of moneys on deposit in the trust's accounts shall be in Authorized
Investments that will mature not later than the business day preceding the
applicable payment date.
LIQUIDITY RESERVE
LIQUIDITY RESERVE AMOUNT
On the closing date, the issuer trustee, at the direction of the manager,
will establish the liquidity reserve in an amount equal to A$[ ] in the
liquidity account. The funds comprising the liquidity reserve will be provided
by St.George Bank Limited, as seller. The amount of the liquidity reserve will
be reduced each quarterly determination date to an amount equal to [0.25%] of
the aggregate Unpaid Balance of the housing loans as the manager determines
from time to time. To the extent that the liquidity reserve amount decreases as
a consequence of a decrease in the aggregate Unpaid Balance of the housing
loans, the manager may direct the issuer trustee to withdraw from the liquidity
account an amount not exceeding the excess of the credit balance of the
liquidity account over the liquidity reserve. Any funds withdrawn from the
liquidity account in these circumstances will be treated as a part of the Total
Available Funds for the relevant period.
LIQUIDITY ACCOUNT
The manager shall not direct the issuer trustee to, and the issuer trustee
shall not, make any withdrawal from the liquidity account except for the
following purposes:
o to make or fund a liquidity draw as described in "Description of the
Class A Notes -- Liquidity Draws";
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o to transfer the credit balance of the liquidity account in accordance
with the master trust deed if the account is held by a bank which
ceases to be an Approved Bank;
o to pay financial institutions duty, bank accounts debit tax or
equivalent taxes payable in respect of the liquidity account;
o to the extent that the credit balance of the liquidity account exceeds
the liquidity reserve, to distribute that excess as a Gross Principal
Collection; and
o to distribute on the final maturity date of the notes or on the date
on which the notes are fully and finally redeemed or repurchased the
credit balance of the liquidity account as a Principal Collection.
LIQUIDITY DRAWS
If on any monthly determination date the manager determines that there is
a Liquidity Shortfall, the manager must direct the issuer trustee to make a
draw on the liquidity reserve on or before the relevant monthly payment date
equal to the lesser of the Liquidity Shortfall and the balance of the liquidity
account.
The issuer trustee must, if so directed by the manager, make that
liquidity draw and cause the proceeds of such liquidity draw to be deposited or
transferred into the collection account on or before the relevant monthly
payment date. This amount will be distributed in the manner described in
"Description of the Class A Notes -- Liquidity Draws."
The issuer trustee must repay outstanding liquidity draws on each monthly
payment date and quarterly payment date out of Total Available Funds, to the
extent they are available, as described in "Description of the Class A Notes --
Distribution of Total Available Funds."
MODIFICATIONS
The issuer trustee, the manager and the servicer, with respect to the
master trust deed and the supplementary terms notice, or the note trustee, with
respect to the note trust deed or any other transaction document, may by way of
supplemental deed alter, add to or modify the master trust deed, the
supplementary terms notice, the note trust deed or any other transaction
document so long as such alteration, addition or modification was effected upon
consent of the noteholders or residual beneficiary as described in the
following paragraph in the case of the master trust deed or supplementary terms
notice or is:
o to correct a manifest error or ambiguity or is of a formal, technical
or administrative nature only;
o necessary to comply with the provisions of any law or regulation or
with the requirements of any Australian governmental agency;
o appropriate or expedient as a consequence of an amendment to any law
or regulation or altered requirements of the government of any
jurisdiction, any department, commission, office of any government or
any corporation owned
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or controlled by any government, 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 Crusade Securitisation Programme
trusts;
o any modification, except a basic terms modification of, or waiver or
authorization of any breach or proposed breach of the Class A 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 A
noteholders. A "basic terms modification" is any modification which
serves to alter, add, or modify the terms and conditions of such class
of 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 noteholders as a whole or the class of noteholders.
A basic terms modification requires the sanction of Class A
noteholders holding at least 75% of the aggregate outstanding
principal balance of the Class A notes. A similar sanction is required
in relation to any modification to the date of maturity of the class
of notes, or a modification which would have the effect of postponing
any day for payment of interest in respect of the class of notes,
reducing or canceling the amount of principal payable in respect of
the class of notes or the rate of interest applicable to the class of
notes or altering the percentage of the aggregate outstanding
principal balance required to consent to any action or altering the
currency of payment of the class of notes or an alteration of the date
or priority of redemption of the class of notes; or
o 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
manager's reasonable opinion, to an allocation of expenses.
Except for an alteration, addition or modification as described in the
preceding section, where in the reasonable opinion of the issuer trustee a
proposed alteration, addition or modification to the master trust deed, the
supplementary terms notice and the note trust deed is prejudicial or likely to
be prejudicial to the interests of the noteholders or a class of noteholders or
the residual beneficiary, 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 outstanding principal balance of the relevant class or classes of
notes or with the prior written consent of the residual beneficiary, as the
case may be.
THE ISSUER TRUSTEE
The issuer trustee is appointed as trustee of the trust on the terms set
out in the master trust deed and the supplementary terms notice.
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The issuer trustee has all the rights, powers and discretions over and in
respect of the assets of the trust in accordance with the transaction documents
provided that it will take no action or omit to take an action without the
direction of the manager, that could reasonably be expected to adversely affect
the ratings of the notes. The manager is required to give to the issuer trustee
all directions necessary to give effect to its recommendations and proposals,
and the issuer trustee is not required to take any action unless it receives a
direction from the manager.
The issuer trustee must act honestly and in good faith and comply with all
relevant material laws in performance of its duties and in exercising its
discretions under the master trust deed, 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 and to 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.
Under the master trust deed, each noteholder and the residual beneficiary
acknowledges that:
o the noteholder cannot require the issuer trustee to owe to the
noteholder, or to act in a manner consistent with, any fiduciary
obligation in any capacity;
o the issuer trustee has no duty, and is under no obligation, to
investigate whether a Manager's Default, a Servicer Transfer Event or
a Title Perfection Event has occurred in relation to the trust other
than where it has actual notice;
o the issuer trustee is required to provide the notices referred to in
the master trust deed in respect of a determination of a Material
Adverse Effect only if it is actually aware of the facts giving rise
to the Material Adverse Effect; and
o in making any such determination, the issuer trustee will seek and
rely on advice given to it by its advisers in a manner contemplated by
the master trust deed;
o in the absence of actual knowledge to the contrary, the issuer trustee
is entitled to rely conclusively on, and is not required to
investigate any notice, report, certificate, calculation or
representation of or by the seller, servicer or manager.
The issuer trustee will be considered to have knowledge or notice of or be
aware of any matter or thing if the issuer trustee has knowledge, notice or
awareness of that matter or thing by virtue of the actual notice or awareness
of the officers or employees of the issuer trustee who have day-to-day
responsibility for the administration of the trust.
ANNUAL COMPLIANCE STATEMENT
The manager, on behalf of the issuer trustee, will deliver to the note
trustee annually a written statement as to the fulfillment of the issuer
trustee's obligations under the transaction documents.
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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
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 equal to [ ] per annum
of the aggregate outstanding principal balance of the housing loans on the
first day of each quarterly collection period, payable in arrears on the
related quarterly payment date.
If the issuer trustee is required at any time to undertake duties which
relate to the enforcement of the terms of any transaction document by the
issuer trustee upon a default by any other party under the terms of that
transaction document, the issuer trustee is entitled to such additional
remuneration as may be agreed between the issuer trustee and the manager or,
failing agreement, such amount as is determined by a merchant bank (acting as
an expert and not as an arbitrator) selected by the issuer trustee. The
determination of such merchant bank shall be conclusive and binding on the
manager and the issuer trustee so far as the law allows.
The issuer trustee will 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, but not general overhead costs and expenses. These
expenses will be Trust Expenses.
REMOVAL OF THE ISSUER TRUSTEE
The issuer trustee is required to retire as trustee after a direction from
the manager in writing following an Issuer Trustee's Default.
A direction given by the manager requiring the issuer trustee to retire
must specify a date for the retirement of the issuer trustee which is no less
than six months from the date of the direction. Alternatively, the manager may
pay to the issuer trustee an amount equal to the fees that the issuer trustee
would earn for that 6 month period in lieu of that notice. The costs of the
issuer trustee, to the extent that they are properly and reasonably incurred,
will be paid out of the assets of the trust as a Trust Expense.
The issuer trustee will bear the reasonable costs of its removal if the
issuer trustee does not resign as directed and the manager is required to
remove it following an event under the first four bullet points in the
definition of Issuer Trustee's Default. The issuer trustee will indemnify the
manager and the trust for these costs. These costs are not payable out of the
assets of the trust.
The manager, subject to giving prior notice to the rating agencies, is
entitled to appoint a replacement statutory trustee on removal or retirement of
the issuer
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trustee if that appointment will not in the reasonable opinion of the manager
materially prejudice the interests of noteholders. Until the appointment is
completed the manager must act as issuer trustee and will be entitled to the
issuer 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 manager, with a copy to the
rating agencies, not less than three months' notice in writing, or such other
period as the 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 manager, or who may be the 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 three months' notice period,
the manager shall act as trustee until a successor trustee is appointed.
LIMITATION OF THE ISSUER TRUSTEE'S LIABILITY
The issuer trustee will not be liable personally for any losses, costs,
liabilities or claims arising from the failure to pay moneys on the due date
for payment to any noteholders, the residual beneficiary, the manager or any
other person or for any loss howsoever caused in respect of the trust or to any
noteholder, the residual beneficiary, the manager or any other person, except
to the extent caused by the fraud, negligence or Default on the issuer
trustee's part, or on the part of the officers and employees of the issuer
trustee or any of its agents or delegates in respect of whom the issuer trustee
is liable.
The issuer trustee acts as trustee and issues the notes only in its
capacity as trustee of the trust and in no other capacity. A liability arising
under or in connection with the transaction documents or the trust can be
enforced against the issuer trustee only to the extent to which it can be
satisfied out of the assets of the trust which are available to satisfy the
right of the issuer trustee to be exonerated or indemnified for the liability.
Subject to the following sentence, 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 master trust deed, the notes, the conditions or the
trust. The limitation will 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 exoneration or indemnification out of the assets of the
trust as a result of the issuer trustee's fraud, negligence or Default.
The master trust deed also contains other provisions which regulate the
issuer trustee's liability to noteholders, other creditors and the residual
beneficiary. These include, but are not limited to, the following:
o Subject to the master trust deed, 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 manager
of its discretions, or for acting on any instructions or directions
given to it.
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o The issuer trustee is not liable for any event associated with the
retirement of the manager, a Servicer Transfer Event or a Title
Perfection Event.
o The issuer trustee is not liable for any act, omission or default of
the manager, the servicer, the currency swap provider, the custodian,
the note trustee, the principal paying agent or any of their
successors or assigns, in relation to their respective duties or
obligations under the transaction documents, or any other person's
failure to carry out an agreement with the issuer trustee with respect
to the trust.
The foregoing provisions do not apply to the extent that the relevant act
is caused by the issuer trustee's fraud, negligence or Default.
RIGHTS OF INDEMNITY OF ISSUER TRUSTEE
The issuer trustee will be indemnified out of the assets of the trust
against all losses and liabilities properly incurred by the issuer trustee in
performing any of its duties or exercising any of its powers under the
transaction documents in relation to the trust except for fraud, negligence or
Default.
The issuer trustee is indemnified out of the assets of the trust against
certain payments it may be liable to make under any Consumer Credit
Legislation. The servicer also indemnifies the issuer trustee in relation to
such payments and the issuer trustee is required to first call on the indemnity
from the servicer before calling on the indemnity from the assets of the trust.
The issuer trustee is also indemnified by St.George Bank under a deed of
indemnity against any action, loss, cost, damage or expense arising out of any
actions relating to any incorrect, misleading or deceptive statements in this
prospectus, the offer of the notes so far as it relates to any incorrect,
misleading or deceptive statements in the prospectus or a failure by St.George
Bank in relation to the due diligence procedures agreed with the issuer
trustee.
THE MANAGER
POWERS
The manager will have full and complete powers of management of the trust,
including the administration and servicing of the assets which are not serviced
by the servicer, borrowings and other liabilities of the trust and the
operation of the trust.
The issuer trustee has no duty to supervise the manager in the performance
of its functions and duties, or the exercise of its discretions.
The manager has the absolute discretion to recommend Authorized
Investments to the issuer trustee and direct the issuer trustee in relation to
those Authorized Investments.
DELEGATION
The manager may, in carrying out and performing its duties and obligations
contained in the master trust deed, delegate to any of the manager's officers
and employees, all acts, matters and things, whether or not requiring or
involving the
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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
manager thinks fit.
MANAGER'S FEES, EXPENSES AND INDEMNIFICATION
The manager is entitled to a quarterly fee for each quarterly collection
period equal to [0.09%] per annum of the aggregate outstanding principal
balance of housing loans on the first day of each quarterly collection period
payable in arrears on the related quarterly payment date.
The manager will be indemnified out of the assets of the trust for any
liability, cost or expense properly incurred by it in its capacity as manager
of the trust, other than general overhead costs and expenses.
REMOVAL OR RETIREMENT OF THE MANAGER
The manager shall retire as trust manager if the issuer trustee so directs
in writing following a Manager's Default. The manager shall bear the costs of
its removal after a Manager's Default. The manager has agreed to indemnify the
issuer trustee and the trust for those costs.
The manager may resign on giving to the issuer trustee and the note
trustee, with a copy to the rating agencies, not less than 120 days, or another
period as the manager and the issuer trustee may agree, notice in writing of
its intention to do so.
On retirement or removal of the manager, the issuer trustee may appoint
another manager on such terms as the issuer trustee sees fit, including the
amount of the manager's fee, provided the appointment will not have an adverse
effect on the rating of the notes. Until a replacement manager is appointed,
the manager must continue as manager. If a replacement manager is not appointed
within 120 days of the issuer trustee electing to appoint a new manager, the
issuer trustee will be the new manager.
LIMITATION OF MANAGER'S LIABILITY
The principal limitations on the manager's liability are set out in full
in the master trust deed. These include the following limitations:
o the manager will be indemnified out of the trust in respect of any
liability, cost or expense properly incurred by it in its capacity as
manager of the trust; and
o subject to the master trust deed, the 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
manager or on whom the 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 manager, except to the extent of losses, costs,
claims or damages caused or contributed to by the breach of its
obligations under any transaction documents.
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THE NOTE TRUSTEE
HSBC Bank USA will serve as the note trustee. The corporate trust office
of the note trustee responsible for the administration of the trust is located
at [ ]. The note trustee will be
entitled to execute any of its trusts or powers under the note trust deed either
directly or through agents or attorneys providing that the use of such agent
does not have an adverse effect on the ratings of the Class A notes. The note
trustee and every other person properly appointed by it under the note trust
deed will be entitled to indemnification from the assets of the trust against
all loss, liability, expense costs, damages, actions, proceedings claims and
demands incurred by, or made against, the note trustee in connection with its
execution of the trusts under the note trust deed, provided that the
indemnification will not extend to any loss, liability or expense arising from
any fraud, negligence, default or breach of trust by the note trustee or any
other person properly appointed by the note trustee.
The note trustee will at all times be a corporation or association,
organized and doing business under the laws of the United States of America,
any individual state or the District of Columbia, authorized under those laws
to exercise corporate trust powers, having a combined capital of
U.S.$50,000,000, as set forth in its most recent published annual report of
condition, and subject to supervision or examination by federal or state
authority. The note trustee may also, if permitted by the Securities and
Exchange Commission, be organized under the laws of a jurisdiction other than
the United States, provided that it is authorized under such laws to exercise
corporate trust powers and is subject to examination by authority of such
jurisdictions substantially equivalent to the supervision or examination
applicable to a trustee in the United States.
The note trustee may resign after giving three months' written notice to
the issuer trustee, the manager, the security trustee and each rating agency.
The issuer trustee may also remove the note trustee in the following
circumstances:
o if the note trustee becomes insolvent;
o if the note trustee ceases its business;
o if the note trustee fails to comply with any of its obligations under
any transaction document and the issuer trustee determines that this
failure has had, or if continued, will have, a Material Adverse
Effect, and if capable of remedy, the note trustee does not remedy
this failure within 14 days after the earlier of the following:
o the note trustee becoming aware of this failure; and
o receipt by the note trustee of written notice with respect to
this failure from either the issuer trustee or the manager; or
o if the note trustee fails to satisfy any obligation imposed on it
under the Trust Indenture Act of 1939 with respect to the trust or the
note trust deed.
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The note trustee is an affiliate of the standby basis swap provider, the
standby fixed-floating rate swap provider, the currency swap provider and one
of the underwriters. If there is an event of default under the Class A notes,
the note trustee may be required to resign by virtue of its obligations under
the Trust Indenture Act. In addition, holders of 75% of the aggregate
outstanding principal balance of the Class A notes may require the issuer
trustee to remove the 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 notes.
THE SECURITY TRUST DEED
GENERAL
National Mutual Life Nominees Limited of Level 2, 65 Southbank Boulevard,
South Melbourne, Victoria, Australia will be the security trustee. National
Mutual Life Nominees Limited's principal activities are the provision of
services as trustee, executors, administrators, attorneys and agents and other
fiduciary services. The issuer trustee will grant a first ranking floating
charge, registered with the Australian Securities and Investments Commission,
over all of the trust assets in favor of the security trustee. The floating
charge will secure the issuer trustee's obligations to the noteholders, the
manager, the security trustee, the servicer, the note trustee, the
underwriters, each paying agent, the seller with respect to the Accrued
Interest Adjustment and redraws, and each provider of a support facility, but
with respect to the mortgage insurer, only in respect of all payments by way of
a timely payment cover under the mortgage insurance policies. These secured
parties are collectively known as the MORTGAGEES.
NATURE OF THE CHARGE
A company may not deal with its assets over which it has granted a fixed
charge without the consent of the relevant mortgagee. Fixed charges are usually
given over real property, marketable securities and other assets which will not
be dealt with by the company.
A floating charge, like that created by the security trust deed, does not
attach to specific assets but instead "floats" over a class of assets which may
change from time to time. The company granting the floating charge may deal
with those assets and 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 company's business. The issuer trustee has agreed not to dispose
of or create interests in the assets of the trust subject to the floating
charge except in the ordinary course of its business and the manager has agreed
not to direct the issuer trustee to take any such actions. If the issuer
trustee disposes of any of the trust assets, including any housing loan, in the
ordinary course of its business, the person acquiring the property will take it
free of the floating charge. The floating charge granted over the trust assets
will crystallize, which means it becomes a fixed charge, upon the occurrence of
specific
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events set out in the security trust deed, including notice to the issuer
trustee following an event of default under the security trust deed. On
crystallization of the floating charge, the issuer trustee may not deal with the
assets of the trust without the consent of the security trustee.
THE SECURITY TRUSTEE
The security trustee is appointed to act as trustee on behalf of the
Mortgagees and holds the benefit of the charge over the trust assets in trust
for each Mortgagee on the terms and conditions 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 noteholders, as determined by the noteholders or the note
trustee acting on their behalf. In addition, the security trustee must give
priority to the interests of the Class A noteholders if, in the security
trustee's opinion, there is a conflict between the interests of Class A
noteholders and the interests of the Class B noteholders or other Mortgagees.
DUTIES AND LIABILITIES OF THE SECURITY TRUSTEE
The security trust deed contains a range of provisions regulating the
scope of the security trustee's duties and liabilities. These include the
following:
o The security trustee is not responsible for the adequacy or
enforceability of the security trust deed or other transaction
documents.
o The security trustee is not required to monitor compliance by the
issuer trustee or manager with the transaction documents or their
other activities.
o Unless required by a transaction document, the security trustee need
not give Mortgagees information concerning the issuer trustee which
comes into the possession of the security trustee.
o The security trustee has no duties or responsibilities except those
expressly set out in the security trust deed or any collateral
security.
o Any action taken by the security trustee under the security trust deed
or any collateral security binds all the Mortgagees.
o 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 associates may engage in any kind of business with
the issuer trustee, the 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.
EVENTS OF DEFAULT
Each of the following is an event of default under the security trust
deed:
o the issuer trustee fails to pay:
o any interest within 10 business days of the quarterly payment
date on which the interest was due to be paid to noteholders; or
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o any other amount owing to a Mortgagee 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
Class A noteholder, with the note trustee;
o the issuer trustee fails to perform or observe any other provisions,
other than the obligations already referred to in this section, of a
transaction document where such failure will have a material and
adverse effect on the amount or timing of any payment to be made
to any noteholder, and that default is not remedied within 30 days
after written notice from the security trustee requiring the failure
to be remedied;
o an Insolvency Event occurs relating to the issuer trustee, in its
capacity as trustee of the trust;
o the charge created by the security trust deed is not or ceases to be a
first ranking charge over the assets of the trust, or any other
obligation of the issuer trustee, other than as mandatorily preferred
by law, ranks ahead of or equal with any of the moneys secured by the
security trust deed;
o any security interest over the trust assets is enforced;
o all or any part of any transaction document, other than the basis
swap, the redraw facility or the currency swap, in respect of a
termination because of an action of a taxing authority or a change in
tax law, 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 basis swap, the standby basis swap, the
redraw facility or the currency swap; or
o without the prior consent of the security trustee, that consent being
subject in accordance with the terms of the security trust deed to the
prior written consent of the Noteholder Mortgagees,
o 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;
o the trust is held or is conceded by the issuer trustee not to
have been constituted or to have been imperfectly constituted; or
o 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.
Where the security trustee has notified the rating agencies, obtained the
written consent of the relevant Noteholder Mortgagees and, in its reasonable
opinion, considers that it would not be materially prejudicial to the interests
of the Mortgagees, it may elect to treat an event that would otherwise be an
event of default as not being an event of default for the purpose of the
security trust deed. Unless the security trustee has made such an election and
providing that the security
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trustee is actually aware of the occurrence of an event of default, the security
trustee must promptly convene a meeting of the Voting Mortgagees at which it
shall seek directions from the Voting Mortgages by way of extraordinary
resolution of Voting Mortgagees regarding the action it should take as a result
of that event of default.
MEETINGS OF VOTING MORTGAGEES
The security trust deed contains provisions for convening meetings of the
Voting Mortgagees to enable the Voting Mortgagees to direct or consent to the
security trustee taking or not taking certain actions under the security trust
deed, including directing the security trustee to enforce the security trust
deed. Voting Mortgagees are:
o the Noteholder Mortgagees alone for as long as amounts outstanding
under the notes are 75% or more of the Secured Moneys, and
o otherwise, the note trustee, acting on behalf of the Class A
noteholders, and each other Mortgagee.
Neither the security trustee nor the manager may call a meeting of Voting
Mortgagees while the Noteholder Mortgagees are the only Voting Mortgagees
unless the Noteholder Mortgagees otherwise consent.
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 under the security trust deed.
VOTING PROCEDURES
Every question submitted to a meeting of Voting Mortgagees shall be
decided in the first instance by a show of hands. If a show of hands results in
a tie, 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. A representative is, in the case of
any noteholder, a person or body corporate appointed as a proxy for that
noteholder. 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 Class A 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 every US$100 or
its equivalent, but not part thereof, of the Secured Moneys that he holds or in
which he is a representative.
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.
ENFORCEMENT OF THE CHARGE
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 a written resolution signed by all of the
Voting Mortgagees is required to direct the security trustee to do any or all
of the following:
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o declare the charge to be enforceable;
o declare all Secured Moneys immediately due and payable;
o convert the floating charge to a fixed charge over any or all of the
trust assets; or
o appoint a receiver over the trust assets or itself exercise the powers
that a receiver would otherwise have under the security trust deed.
If the Noteholder Mortgagees are the only Voting Mortgagees, they 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, including enforcing the charge.
Any consent or direction of the note trustee and the Class B noteholders,
when they are the only Voting Mortgagees, requires the approval of noteholders
representing greater than 50% of the outstanding principal balance of the
notes. 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.
THE NOTE TRUSTEE AS VOTING MORTGAGEE
The note trustee may, without the consent of the noteholders, determine
that any condition, event or act which with the giving of notice, lapse of time
or the issue of a certificate would constitute an event of default under the
security trust deed shall not, or shall not subject to specified conditions, be
treated as such. The note trustee shall not exercise any of these powers in
contravention of any express direction given in writing by holders representing
at least 75% of the aggregate outstanding principal balance of the Class A
notes. 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 by the manager on behalf of
the issuer trustee to the noteholders as specified in the transaction documents
as soon as practicable thereafter.
If an event of default under the security trust deed occurs and is
continuing, the note trustee shall deliver to each Class A 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 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 relevant class of Class A
noteholders.
The rights, remedies and discretion of the Class A noteholders under the
security trust deed, 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
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
Class A noteholders without inquiry about compliance with the note trust deed.
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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 or any
notes unless directed or requested to do so in writing by the holders of at
least 75% of the aggregate outstanding principal balance 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.
If any of the Class A notes remain 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:
o 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 equal with the Class A notes;
or
o 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 the
preceding paragraph.
LIMITATIONS OF ACTIONS BY THE SECURITY 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. 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.
If the security trustee convenes a meeting of the Voting Mortgagees, or is
required by an Extraordinary Resolution to take any action under the security
trust deed, and advises the Voting Mortgagees that it will not act in relation
to the enforcement of the security trust deed unless it is personally
indemnified by the Voting Mortgagees to its reasonable satisfaction against all
actions, proceedings, claims and demands to which it may render itself liable,
and all costs, charges, damages and expenses which it may incur in relation to
the enforcement of the security trust deed and is put in funds to the extent to
which it may become liable, including costs and expenses, and the Voting
Mortgagees refuse to grant the requested indemnity, and put the issuer trustee
in funds, then the security trustee is not obliged to act in relation to that
enforcement under the security trust deed. In
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those circumstances, the Voting Mortgagees may exercise such of those powers
conferred on them by the security trust deed as they determine by Extraordinary
Resolution.
The security trustee will not 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 secured moneys or relating in any way to the mortgaged property
or 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, except for the
fraud, negligence or breach of trust of the security trustee.
PRIORITIES UNDER THE SECURITY TRUST DEED
The proceeds from the enforcement of the security trust deed are to be
applied in the order of priority set forth in this subsection, subject to any
other priority which may be required by statute or law. Certain federal taxes,
unpaid wages, long service leave, annual leave and similar employee benefits
and certain auditor's fees, if any, will be paid prior to the Mortgagees.
Subject to the foregoing, the proceeds from enforcement of the security trust
deed will be distributed as follows:
o first, to pay pro rata:
o any fees and other expenses due to the security trustee, the note
trustee or the principal paying agent;
o any unpaid fees and paid expenses incurred in relation to the
operation and administration of the trust, including the issuer
trustee's fees and expenses; and
o the receiver's remuneration;
o second, 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;
o third, to pay unpaid Accrued Interest Adjustment due to the seller;
o fourth, repayment to the mortgage insurer of money previously paid
under a mortgage insurance policy by way of a timely payment cover,
but only to the extent that funds are received from the related
borrower;
o fifth, to pay to the fixed-floating rate swap provider under the
fixed-floating rate swap any break fees received by or on behalf of
the issuer trustee from a borrower or the mortgage insurer and which
have not previously been paid to the fixed-floating rate swap
provider;
o sixth, to pay, pro rata:
o monetary liabilities of the issuer trustee to all providers of
support facilities, other than the currency swap provider;
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o monetary liabilities of the issuer trustee to the Class A
noteholders;
o unreimbursed redraws, to the seller; and
o all monetary liabilities of the issuer trustee to the currency
swap provider under a confirmation relating to Class A notes, but
without double-counting above;
o seventh, any monetary liabilities of the issuer trustee to Class B
noteholders;
o eighth, any amount standing to the credit of the liquidity account to
St.George Bank Limited;
o ninth, to pay pro rata any amounts not covered in this section owing
to any Mortgagee under any transaction document;
o tenth, to pay all monies owing to the mortgage insurer and not paid
above;
o eleventh, 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
o twelfth, 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.
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. Any claims of the noteholders remaining after realization
of the security and application of the proceeds as aforesaid shall, except in
limited circumstances, be extinguished.
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 receive a quarterly fee in the amount
agreed from time to time by the issuer trustee, the security trustee and the
manager.
INDEMNIFICATION
The issuer trustee has agreed to indemnify the security trustee from and
against all losses, costs, liabilities, expenses and damages arising out of or
in connection with the transaction documents, except to the extent that they
result from the fraud, negligence or breach of trust on the part of the
security trustee.
RETIREMENT AND REMOVAL OF THE SECURITY TRUSTEE
The security trustee may retire on three months' notice in writing to the
issuer trustee, the manager, the note trustee and the rating agencies if a
successor security trustee is appointed.
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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 remove the security trustee at any time and the
manager may remove the security trustee if:
o an Insolvency Event occurs in relation to the security trustee in its
personal capacity;
o the security trustee ceases business;
o the security trustee fails to comply with any of its obligations under
any transaction document and such action has had, or, if continued
will have, a Material Adverse Effect, and, if capable of remedy, that
failure is not remedied within 14 days after the earlier of:
o the security trustee's having become actually aware, by virtue of
the actual awareness of the officers or employees of the security
trustee who have day-to-day responsibility for the administration
of the security trust, of that failure; and
o the security trustee's having received written notice with
respect thereto from the manager; or
o there occurs a change in the control of the security trustee from that
existing on the date of the security trust deed, unless approved by
the manager.
Upon notice of resignation or removal of the security trustee, the 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 St.George Bank or
its affiliates. If no person can be found to act as security trustee, the
Voting Mortgagees may elect a Voting Mortgagee to act as security trustee.
Any resignation or removal of the security trustee and appointment of a
successor will not become effective until the rating agencies approve the
appointment and confirm that it will not cause a downgrade, qualification or
withdrawal of the ratings of the notes.
AMENDMENT
The issuer trustee and the security trustee may, following at least ten
business days written notice to the rating agencies and with the written
approval of the manager and the Noteholder Mortgagees, amend the security trust
deed to, among other things, correct a manifest error or ambiguity or which in
the opinion of the security trustee is necessary to comply with the provisions
of any law or regulation. If the amendment is prejudicial or likely to be
prejudicial to the interests of the Mortgagees or a class of Mortgagees, an
Extraordinary Resolution of the Voting Mortgagees is required.
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THE REDRAW FACILITY
REDRAWS
If the seller consents to a redraw, it will transmit funds in the amount
of the redraw to the borrower.
The seller is entitled to be reimbursed for the amount of any redraws on
any of the housing loans which it pays to borrowers:
o first, from Gross Principal Collections available at the time the
redraw is made;
o second, from any available Redraw Retention Amount; and
o third, from drawings under the redraw facility agreement, to the
extent that it is available.
The seller will be reimbursed for redraws from Gross Principal Collections
in priority to principal payments on the notes.
THE REDRAW FACILITY AGREEMENT
Under the redraw facility agreement, the redraw facility provider agrees
to make advances to the issuer trustee for the purpose of reimbursing redraws
made by the seller to the extent that Gross Principal Collections and the
available Redraw Retention Amount are insufficient to fund redraws. Under the
redraw facility, the redraw facility provider agrees to make advances to the
issuer trustee up to the redraw limit. The redraw limit is equal to [2%] of the
aggregate Stated Amount of the notes, as adjusted by the manager on each
anniversary of the redraw facility agreement or any other amount as agreed
between the redraw facility provider, the issuer trustee and the manager. At
the closing date, the redraw limit will 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
notes then outstanding. The initial term of the redraw facility is 364 days.
The redraw facility provider may cancel all or part of the redraw limit at any
time immediately on giving notice to the issuer trustee and the manager.
DRAWING ON THE REDRAW FACILITY
A drawing may be made under the redraw facility only for the purpose of
funding a Redraw Shortfall or to repay a previous draw under the redraw
facility. If at any time during the term of the redraw facility, the manager
determines that there is a Redraw Shortfall, it may direct the issuer trustee
to draw down on the redraw facility for an amount equal to the lesser of:
o the Redraw Shortfall; and
o the redraw limit less the greater of zero and the total principal
amount of all outstanding draws under the redraw facility, less the
total Carryover Redraw Charge Offs, provided that for the purpose of
this calculation, it is assumed that all draws under the redraw
facility due to be repaid on or before the date of the drawdown have
been repaid.
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CONDITIONS PRECEDENT TO DRAWING
The obligations of the redraw facility provider to make available each
draw under the redraw facility are subject to the conditions precedent that:
o there is currently no event of default under the redraw facility; and
o the representations and warranties by the issuer trustee in the redraw
facility agreement are true as of 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 current facts and circumstances.
AVAILABILITY FEE
An availability fee accrues daily from the date of the redraw facility
agreement at a rate of [ %] per annum on an amount equal to the redraw limit,
less outstanding Redraw Advances, less Carryover Redraw Charge Offs. The
availability fee is payable on each quarterly 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.
INTEREST
With respect to any draws under the redraw facility made by the redraw
facility provider, interest 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 One
Month Bank Bill Rate plus a margin, calculated on the basis of the actual
number of days elapsed since the advance and a year of 365 days. The margin
will be [ %] per annum, unless the draw has been outstanding for twelve months
or more, at which time the margin will be [ %] per annum for that draw. The
interest shall be payable on each payment date and on termination of the redraw
facility. To the extent any interest is not paid on a payment date, the amount
of the unpaid interest will be capitalized and interest will accrue on any such
unpaid interest from that payment date.
REPAYMENT OF DRAWS ON THE REDRAW FACILITY
The issuer trustee shall, at the direction of the manager, repay
unreimbursed draws under the redraw facility 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 draw on the following payment date.
EVENTS OF DEFAULT UNDER THE REDRAW FACILITY AGREEMENT
It is an event of default under the redraw facility agreement if:
o an amount is available for payment to the redraw facility provider
under the redraw facility agreement, and the issuer trustee does not
pay that amount within 10 business days of its due date;
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o an Insolvency Event occurs in relation to the trust;
o 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;
o the Termination Date occurs in relation to the trust; or
o an event of default under 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.
CONSEQUENCES OF AN EVENT OF DEFAULT
At any time after an event of default under the redraw facility agreement,
the redraw facility provider may do all or any of the following:
o declare all moneys actually or contingently owing under the redraw
facility agreement immediately due and payable; and
o cancel the redraw limit.
TERMINATION
The redraw facility will terminate on the earliest of the following:
o the date on which the notes are redeemed in full;
o the date on which the redraw facility provider declares the redraw
facility agreement terminated following an event of default under the
redraw facility agreement;
o the date on which the issuer trustee enters into a replacement redraw
facility;
o the date on which Crusade Management Limited retires or is removed as
manager;
o the date on which the issuer trustee has canceled all of the redraw
limit;
o the date which is one year after the final maturity date of the notes;
o the date on which the redraw limit is canceled in full by the redraw
facility provider; and
o 364 days from the date of the redraw facility agreement, unless the
redraw facility provider has agreed to extend the term of the redraw
facility in accordance with the terms of the redraw facility.
THE SERVICING AGREEMENT
SERVICING OF HOUSING LOANS
The servicer is required to administer the housing loans in the following
manner:
o in accordance with the servicing agreement;
o in accordance with St.George Bank's procedures manual and policies as
they apply to those housing loans from time to time; and
o with the same degree of diligence and care expected of an
appropriately qualified servicer of similar financial products.
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In performing any services under the servicing agreement the servicer
shall take into account whether its performance of such services does or does
not have any Material Adverse Effect. The servicer's actions in servicing the
housing loans in accordance with the relevant procedures manual are binding on
the issuer trustee. 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.
POWERS
Subject to the standards for servicing set forth in the preceding section,
the servicer has the express power, among other things:
o 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;
o to waive any right in respect of the housing loans and mortgages in
the ordinary course of servicing the housing loans and mortgages; and
o to extend the maturity date of a housing loan beyond 30 years from the
date of origination when required to do so by law or a government
agency. These extensions are not subject to the requirement that the
action not have a Material Adverse Effect.
UNDERTAKINGS BY THE SERVICER
The servicer has undertaken, among other things, the following:
o 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 borrowers of the issuer
trustee's interests, registering transfers, delivering documents to
the issuer trustee and taking other action required to perfect title
or which the issuer trustee requires it to do.
o To collect all moneys due under those housing loans and related
mortgages and pay them into the collection account not later than the
time St.George Bank would be required to do so.
o 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.
o To 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 manager when each such claim is
made.
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o 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 equal with the related 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 related
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 servicer's procedures manual or its ordinary
course of business.
o 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 a Material Adverse Effect.
o It will set the interest rate on the housing loans in accordance with
the requirements of the supplementary terms notice.
o It will give notice in writing to the issuer trustee and the rating
agencies if it becomes aware of the occurrence of any Servicer
Transfer Event.
o 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.
o It will notify the issuer trustee and the manager of any event which
it reasonably believes is likely to have a Material Adverse Effect
promptly after becoming aware of such event; and the manager of
anything else which the manager reasonably requires regarding any
proposed modification to any housing loan or related mortgage.
o It will provide information reasonably requested by the issuer trustee
or the manager, with respect to all matters relating to the trust and
the assets of the trust, and the issuer trustee or the 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 housing
loan agreements, mortgages, certificates of title and other documents
related to the housing loans.
UNDERTAKINGS BY THE SELLER
The St.George Bank, in its capacity as seller, has undertaken, among other
things, the following under the servicing agreement:
o 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 in order to perform or comply with its
obligations under the servicing agreement; and will comply with all
laws in connection with its ownership of any housing loans and
mortgages where failure to do so would have a Material Adverse Effect.
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o 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.
o 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 equal 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 seller's procedures manual or its ordinary course
of business.
o 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 a Material
Adverse Effect.
o 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 the servicer. If the order is due to the
servicer breaching any applicable law, then the servicer 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
the servicer's external auditors.
COLLECTIONS
The servicer will receive collections on the housing loans from borrowers
in its general collection account. The servicer shall deposit any collections
in its possession or control into the collection account within two business
days following its receipt of the collections, less any amount for taxes
payable in relation to the collections or any amount the servicer may retain
under the supplementary terms notice.
SERVICING COMPENSATION AND EXPENSES
The servicer will receive a fee for servicing the housing loans equal to
the product of [0.40%] per annum and the aggregate outstanding principal of the
housing loans on the first day of each quarterly collection period. This fee
will be payable in arrears on the quarterly payment date following the end of
the quarterly collection period.
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 a
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housing loan or its related mortgaged property 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.
LIABILITY OF THE SERVICER
The servicer fully indemnifies the issuer trustee against all losses,
liabilities, costs and expenses incurred as a result of the failure by the
servicer to perform its duties under the servicing agreement or any action or
conduct undertaken or not taken by the servicer, including as a consequence of
a Servicer Transfer Event. The servicer may rely upon any statement by the
issuer trustee or the manager that any action or inaction on its part is
reasonably likely to, or will, have a Material 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 manager that the action or inaction
is not reasonably likely to, or will not have, a Material Adverse Effect.
REMOVAL, RESIGNATION AND REPLACEMENT OF THE SERVICER
The issuer trustee must terminate the servicer's appointment if the issuer
trustee determines that any of the following SERVICER TRANSFER EVENTS occurs:
o the servicer suffers an Insolvency Event;
o the servicer fails to pay any amount within 10 business days of
receipt of a notice to do so;
o 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, a Material Adverse Effect, as determined by the issuer
trustee and that failure is not remedied within the earlier of 30 days
after the servicer becomes aware of that failure and receipt of a
notice from either the issuer trustee or the manager;
o 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 45
days after notice from the issuer trustee, and the issuer trustee
determines that breach would have a Material Adverse Effect;
o it becomes unlawful for the servicer to perform the services under the
servicing agreement; or
o the servicer merges with, or it is proposed that the servicer merge
with, a any entity, or all of the assets or business of the servicer
are or are to be acquired by any entity, and any rating agency
confirms that the merger or acquisition would result in a downgrade
or withdrawal of rating of any note.
The servicer will indemnify the issuer trustee against any losses,
liabilities, costs and expenses resulting from a Servicer Transfer Event.
RESIGNATION
The servicer may voluntarily resign after giving 120 days notice to the
rating agencies, the manager and the issuer trustee.
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REPLACEMENT OF THE SERVICER
The manager and the issuer trustee shall use reasonable efforts to find an
eligible successor servicer. Until a successor servicer is appointed, the
servicer must continue to act as the servicer and will be paid the servicing
fee. If an eligible successor servicer is not appointed by the expiration of
the 120-day notice period, the issuer trustee itself will act as servicer and
be entitled to the servicing fee.
TERMINATION OF SERVICING AGREEMENT
The servicing agreement will terminate on the earlier of:
o the date on which the servicing agreement is terminated pursuant to a
Servicer Transfer Event;
o the date which is one month after the notes have been redeemed in full
in accordance with the transaction documents and the issuer trustee
ceases to have any obligation to any creditor in relation to any
trust;
o the date on which the issuer trustee replaces the servicer with a
successor servicer; and
o the date on which the servicer is replaced after resigning.
AMENDMENT
The servicer and the issuer trustee may amend the servicing agreement in
writing after giving prior notice of the proposed amendment to the rating
agencies and the rating agencies have confirmed that the amendment will not
result in an adverse effect on the rating of any notes.
THE CUSTODIAN AGREEMENT
DOCUMENT CUSTODY
The custodian is responsible for custody of the title documents for each
mortgaged property, including the loan agreement, mortgage document and
certificate of title for the housing loans on behalf of the issuer trustee,
exercising the degree of diligence and care expected of an appropriately
qualified custodian of documents and in accordance with the custodial
procedures approved in advance by the issuer trustee, the manager and the
rating agencies.
The custodian's duties and responsibilities include:
o holding each title document in accordance with the custodial
procedures as if the title documents were beneficially owned by the
custodian;
o ensuring that each title document is capable of identification and
kept in a security packet in a security vault separate from other
documents held by the custodian for other persons; and
o maintaining in safe custody a record of the physical movement of the
title documents.
In performing its services, the custodian must consider if its acts or
omissions will have any Material Adverse Effect.
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The custodian undertakes, among other things:
o to comply with applicable laws where the failure to do so would have a
Material Adverse Effect;
o to comply with the mortgage insurance policies;
o to provide information and access relating to its custodial services
if required by the issuer trustee, the manager or the servicer;
and ensure that the premises holding the documents are appropriately
insured for fire and public risks.
AUDIT
The custodian will be audited by an independent auditor 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.
COMPENSATION OF THE CUSTODIAN
The custodian will receive a fee based on the aggregate outstanding
principal of the housing loans on the first day of each quarterly collection
period. This fee will be payable in arrears on the quarterly payment date
following the end of the quarterly collection period.
INDEMNITY
The custodian also indemnifies the issuer trustee against all losses,
liabilities, costs and expenses incurred by the issuer trustee as a result of a
breach by the custodian of its obligations under the custodian agreement. This
indemnity is limited to the extent further described in the custodian
agreement. Under the deed of indemnity, St.George Bank also indemnifies the
issuer trustee in respect of all liability arising as a result of a breach by
the custodian of its obligations under the custodian agreement and any money
payable under the custodian agreement which is not recoverable from the
custodian.
REMOVAL AND RETIREMENT OF THE CUSTODIAN
The issuer trustee may terminate the custodian's appointment if the issuer
trustee determines that:
o the custodian has suffered an Insolvency Event;
o if the custodian is a related company of the seller, either
o the long-term rating of the seller falls below:
o BBB from Fitch IBCA; or
o Baa2 from Moody's, or
o BBB from Standard & Poor's; or
o a Title Perfection Event has occurred;
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o the custodian has failed to comply with the custodial procedures or
any of its other obligations under any other transaction document and
such action has had, or if continued will have, a Material Adverse
Effect and, if capable of remedy, the custodian does not remedy that
failure within 30 days after the earlier of the custodian becoming
aware of that failure and receipt of a notice from either the issuer
trustee or the manager;
o any representation, warranty or certification made by the custodian is
incorrect when made and is not waived by the issuer trustee, or if
capable of remedy, is not remedied to the issuer trustee's reasonable
satisfaction within 45 days after notice from the issuer trustee, and
the issuer trustee determines that breach will or may have a Material
Adverse Effect;
o it has become unlawful for the custodian to perform its custodial
services;
o a Servicer Transfer Event has occurred; or
o the custodian has not complied with the requirements of the custodian
agreement to the satisfaction of its auditor and a further audit also
results in an adverse finding by the auditor.
The custodian will indemnify the issuer trustee against any losses,
liabilities, costs and expenses resulting from its termination. If the
custodian is removed, it must deliver at its expense the title documents and
all other documents and records relating to the housing loans to, or at the
direction of the issuer trustee. If the custodian has not done so within ten
business days of the date of termination or such longer period as the issuer
trustee in its reasonable discretion permits, the issuer trustee must, with the
assistance of the manager, enter the premises where the title documents are
kept, take possession of and remove the title documents. The issuer trustee
may, to the extent that it has information available to it to do so, lodge
caveats in respect of the housing loans and related mortgages for which it does
not hold the title documents. A caveat is a notice which is put on the relevant
land title register to provide notice of a party's interest in the property.
THE SELLER LOAN AGREEMENT
The value of the housing loan pool as of the cut-off date, and the
consideration payable by the issuer trustee to the seller for the housing
loans, is A$[ ]. If the net proceeds received by the issuer trustee from
the issuance of the notes is less than the purchase price for the housing
loans, the seller will lend the balance of the consideration to the issuer
trustee. This loan will not bear interest and will not have the benefit of the
security trust deed. The issuer trustee will be required to repay any
outstanding principal under the loan, if any, after the Secured Moneys have
been fully and finally paid, to the extent that moneys are available to pay
that principal, as a full and final settlement of the obligations of the issuer
trustee under the loan.
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THE SERVICER
SERVICING OF HOUSING LOANS
Under the servicing agreement, St.George Bank will be appointed as the
initial servicer of the housing loans. The day to day servicing of the housing
loans will be performed by the servicer at St.George Bank's head office in
Kogarah and at St.George Bank's retail branches and telephone banking and
marketing centers. Servicing procedures include managing customer inquiries,
monitoring compliance with the loan features and rights applicable to these
loans, and the arrears management of overdue loans. 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. See "Description of the Transaction Documents -- The
Servicing Agreement."
COLLECTION AND ENFORCEMENT PROCEDURES
Pursuant to the terms of the housing loans, borrowers must make the
minimum repayment due under the terms and conditions of the housing loans, on
or before each monthly installment due date. St.George Bank credits repayments
to an individual housing loan on the date of its receipt. Interest is accrued
daily on the balance outstanding after close of business and charged monthly to
each relevant loan account.
When a housing loan is 1 day delinquent, it is identified in the mortgage
service system. At 14 days delinquent the accounts are transferred to the
collection system. The collection system identifies all accounts which are
overdue and provides detailed lists of those loans for action and follow-up.
The collection system allocates overdue loans to designated collection
officers within St.George Bank. The loans that have been delinquent longer are
allocated to the more experienced collection officers.
Actions taken by the bank in relation to delinquent accounts will vary
depending on the following elements and, if applicable, with the input of the
mortgage insurer:
o arrears history;
o equity in the property; and
o arrangements made with the borrower to meet overdue payments.
If satisfactory arrangements cannot be made to rectify a delinquent
housing loan, St.George Bank will issue legal notices and institute recovery
action by enforcing the mortgage security. Collection officers, under legal
assistance, manage this process and pursue many sources of recovery including
the following:
o guarantees;
o government assistance schemes;
o mortgagee sale; and
o claims on mortgage insurance.
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It should be noted that St.George Bank reports all actions that it takes
on overdue housing loans to the mortgage insurer in accordance with the terms
of the mortgage insurance policies.
COLLECTION AND FORECLOSURE PROCESS
When a loan is 15 days delinquent, a computer generated letter is sent to
the borrower advising of the situation and requesting that payment be made to
rectify the situation. Phone calls are also commenced at this stage. After a
housing loan is 30 days delinquent, more intense phone calls are carried out
together with any customer specific letters being generated.
When a loan reaches 60 days delinquent, a default notice is sent advising
the borrower if the matter is not rectified within a period of 31 days, the
bank is entitled to commence enforcement proceedings without further notice.
Usually a statement of claim will be issued to a borrower on an account which
is 91 days delinquent. At 120 days delinquent, the bank applies for judgement
in the Supreme Court. Generally at 150 days delinquent, the bank applies for a
writ of possession and generally by 170 days the sheriff is in a position to
set an eviction date. Appraisals and valuations are ordered and a reserve price
is set for sale via auction or private treaty. In most instances if the account
continues to be in arrears, an offer on the property would be sought and
accepted and the property settled. These time frames assume that the borrower
has either taken no action or has not honored any commitments made in relation
to the delinquency.
It should also be noted that the mortgagee's ability to exercise its power
of sale on the mortgaged property is dependent upon the statutory restrictions
of the relevant state or territory as to notice requirements. In addition,
there may be factors outside the control of the mortgagee such as whether the
mortgagor contests the sale and the market conditions at the time of sale.
These issues may affect the length of time between the decision of the
mortgagee to exercise its power of sale and final completion of the sale.
Under St.George Bank's housing loan product specifications, variable rate
of interest loans enable a borrower to have a payment holiday where the
borrower has made excess payments. The excess payments are the difference
between the total amount paid by the borrower and the amount of the minimum
payments required. In accordance with the product specification, if a borrower
with excess payments fails to make some or all of a minimum payment, the
servicer will apply the excess payments against that missed payment. As such,
the relevant housing loan will not be considered delinquent until such time as
when the amount of missed payments is greater than the excess payments.
The arrears and security enforcement procedures may change over time as a
result of business changes, or legislative and regulatory changes.
SERVICER DELINQUENCY EXPERIENCE
In January 1997, St.George Bank merged with the Advance Bank Group to form
the fifth largest banking group in Australia. Prior to this time, delinquency
data
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was separately reported by each banking organization. Consequently, the
following tables summarize delinquency and foreclosure experience,
respectively, for loans serviced by St.George Bank prior to and after the
merger. All loans in the securitised pool that were settled prior to September
1997 were originated by St.George Bank.
Table 1 summarizes the delinquency and foreclosure experience of loans
originated by St.George Bank. Table 2 summarizes the combined experience of
St.George Bank loans and loans acquired in the merger with Advance Bank. Both
tables express the number of delinquent loans at period end as a percentage of
the total number of loans serviced.
TABLE 1: ST.GEORGE BANK ONE-TO-FOUR-FAMILY RESIDENTIAL LOANS
<TABLE>
<CAPTION>
MARCH SEPTEMBER MARCH SEPTEMBER MARCH SEPTEMBER MARCH
31, 1994 30, 1994 31, 1995 30, 1995 31, 1996 30, 1996 31, 1997
- ---------- ----------- ---------- ----------- ---------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
</TABLE>
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TABLE 2: ST.GEORGE BANK ONE-TO-FOUR-FAMILY RESIDENTIAL LOANS
<TABLE>
<CAPTION>
SEPTEMBER MARCH SEPTEMBER MARCH JUNE 30,
30, 1997 31, 1998 30, 1998 31, 1999 1999
- ----------- ---------- ----------- ---------- ---------
<S> <C> <C> <C> <C>
</TABLE>
There can be no assurance that the delinquency and foreclosure experience
with respect to the housing loans comprising the housing loan pool will
correspond to the delinquency and foreclosure experience of the servicer's
mortgage portfolio set forth in the foregoing table. Indeed, the statistics
shown in the preceding table represent the delinquency and foreclosure
experience for the total one-to-four-family residential mortgage portfolios for
each of the years presented, whereas the aggregate delinquency and foreclosure
experience on the housing loans will depend on the results obtained over the
life of the housing loan pool. In addition, the foregoing statistics include
mortgage loans with a variety of payment and other characteristics that may not
correspond to those of the housing loans in the pool. Moreover, if the
one-to-four-family real estate market should experience an overall decline in
property values such that the principal balances of the housing loans
comprising the housing loan pool become equal to or greater than the value of
the related mortgaged properties, the actual rates of delinquencies and
foreclosures could be significantly higher than those previously experienced by
the servicer. In addition, adverse economic conditions, which may or may not
affect real property values, may affect the timely payment by borrowers of
scheduled payments of principal and interest on the housing loans and,
accordingly, the rates of delinquencies, foreclosures, bankruptcies and losses
with respect to the housing loan pool. You should note that Australia
experienced a period of relatively low and stable interest rates during the
period covered in the preceding tables. If interest rates were to rise, it is
likely that the rate of delinquencies and foreclosures would increase.
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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 notes
under the stated assumptions and is not a prediction of the prepayment rate
that might actually be experienced.
GENERAL
The rate of principal payments and aggregate amount of distributions on
the notes and the yield to maturity of the notes will relate 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 the seller. Subject, in the case of fixed rate housing loans, to the payment
of applicable fees, the housing loans may be prepaid by the mortgagors at any
time.
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 early distributions of principal
amounts on the notes. Prepayments of principal may occur in the following
situations:
o refinancing by mortgagors with other financiers;
o receipt by the issuer trustee of enforcement proceeds due to a
mortgagor having defaulted on its housing loan;
o receipt by the issuer trustee of insurance proceeds in relation to a
claim under a mortgage insurance policy in respect of a housing loan;
o repurchase by the seller as a result of a breach by it of certain
representations, less the principal balance of any related substituted
loan, if any;
o receipt by the trust of any net amount attributable to principal from
another trust established under the master trust deed with respect to
the substitution of a housing loan;
o repurchase of the housing loans as a result of an optional termination
or a redemption for taxation or other reasons;
o receipt of proceeds of enforcement of the security trust deed prior to
the final maturity date of the notes; or
o receipt of proceeds of the sale of housing loans if the trust is
terminated while notes are outstanding, for example, if required by
law, and the housing loans are then either:
o repurchased by St.George Bank under its right of first refusal; or
o sold to a third party.
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The prepayment amounts described above are reduced by:
o principal draws;
o repayment of redraw advances; and
o the Redraw Retention Amount retained in the collection account.
Since the rate of payment of principal of the housing loans cannot be
predicted and will depend on future events and a variety of factors, no
assurance can be given to you as to this rate of payment or the rate of
principal prepayments. The extent to which the yield to maturity of any note
may vary from the anticipated yield will depend upon the following factors:
o the degree to which a note is purchased at a discount or premium; and
o the degree to which the timing of payments on the note is sensitive to
prepayments, liquidations and purchases of the housing loans.
A wide variety of factors, including economic conditions, the availability
of alternative financing and homeowner mobility may affect the trust's
prepayment experience with respect to the housing loans. In particular, under
Australian law, unlike the law of the United States, interest on loans used to
purchase a principal place of residence is not ordinarily deductible for
taxation purposes.
WEIGHTED AVERAGE LIVES
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 the note is reduced to zero.
Usually, greater than anticipated principal prepayments will increase the
yield on notes purchased at a discount and will decrease the yield on notes
purchased at a premium. The effect on your yield due to principal prepayments
occurring at a rate that is faster or slower than the rate you anticipated will
not be entirely offset by a subsequent similar reduction or increase,
respectively, in the rate of principal payments. The amount and timing of
delinquencies and defaults on the housing loans and the recoveries, if any, on
defaulted housing loans and foreclosed properties will also affect the weighted
average life of the notes.
The following tables are based on a constant prepayment rate model.
Constant prepayment rate 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. Constant prepayment rate 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 in your pool. Neither of the seller nor the manager believes that
any existing statistics of which it is aware provide a reliable basis for
noteholders to predict the amount or timing of receipt of housing loan
prepayments.
The following tables are based upon the assumptions in the following
paragraph, and not upon the actual characteristics of the housing loans. Any
discrepancies between characteristics of the actual housing loans and the
assumed housing loans
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may have an effect upon the percentages of the principal balances outstanding
and weighted average lives of the notes set forth in the tables. Furthermore,
since these discrepancies exist, principal payments on the notes may be made
earlier or later than the tables indicate.
For the purpose of the following tables, it is assumed that:
o the housing loan pool consists of fully-amortizing housing loans
having the following approximate characteristics:
<TABLE>
<CAPTION>
INITIAL REMAINING
PRINCIPAL INTEREST ORIGINAL TERM TERM TO
POOL AMOUNT RATE TO MATURITY MATURITY
NUMBER A$ % IN MONTHS IN MONTHS
- -------- ----------- ---------- --------------- ----------
<S> <C> <C> <C> <C>
</TABLE>
o the cut-off date is the close of business on [ ];
o closing date for the notes is [ ];
o payments on the notes are made on the quarterly payment date,
regardless of the day on which payment actually occurs, commencing in
[ ] and are made in accordance with the priorities described
in this prospectus;
o the housing loans' prepayment rates are equal to the respective
percentages of constant prepayment rate indicated in the tables;
o the scheduled monthly payments of principal and interest on the
housing loans will be timely delivered on the first day of each month,
except in the month of August, in which case, payments are calculated
based on a pro rata share of one month's collections, assuming a start
date of the close of business [ ], with no defaults;
o there are no redraws, substitutions or payment holidays with respect
to the housing loans;
o there are no releases from the liquidity reserve;
o all prepayments are prepayments in full received on the last day of
each month and include 30 days' interest on the prepayment;
o principal collections are distributed according to the rules of
distribution set forth in this prospectus;
o all payments under the swaps are made as scheduled;
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o the manager does not direct the issuer trustee to exercise its right
of optional redemption of the notes, except with respect to the line
titled "Weighted Average Life -- To Call (Years)"; and
o the exchange rate is US$[ ]=A$1.00.
It is not likely that the housing loans will pay at any assumed constant
prepayment rate to maturity or that all housing loans will prepay at the same
rate. In addition, the diverse remaining terms to maturity of the housing loans
could produce slower or faster distributions of principal than indicated in the
tables at the assumed constant prepayment rate 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 in
this section. You are urged to make your investment decisions on a basis that
includes your determination as to anticipated prepayment rates under a variety
of the assumptions discussed in this prospectus as well as other relevant
assumptions.
In the following tables, the percentages have been rounded to the nearest
whole number and the weighted average life of a class of notes is determined by
the following three step process:
o multiplying the amount of each payment of principal thereof by the
number of years from the date of issuance to the related payment date,
o summing the results, and
o dividing the sum by the aggregate distributions of principal referred
to in the first clause above and rounding to two decimal places.
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PERCENT OF INITIAL PRINCIPAL OUTSTANDING AT THE FOLLOWING PERCENTAGES OF
CONSTANT PREPAYMENT RATE
<TABLE>
<CAPTION>
CLASS A-1 NOTES
-------------------------------------------
0% 20% 22% 25% 30% 35%
DATE ---- ----- ----- ----- ----- ----
<S> <C> <C> <C> <C> <C> <C>
[INSERT]
</TABLE>
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PERCENT OF INITIAL PRINCIPAL OUTSTANDING AT THE FOLLOWING PERCENTAGES OF
CONSTANT PREPAYMENT RATE
<TABLE>
<CAPTION>
CLASS A-2 NOTES
-------------------------------------------
0% 20% 22% 25% 30% 35%
DATE ---- ----- ----- ----- ----- ----
<S> <C> <C> <C> <C> <C> <C>
</TABLE>
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PERCENT OF INITIAL PRINCIPAL OUTSTANDING AT THE FOLLOWING PERCENTAGES OF
CONSTANT PREPAYMENT RATE
<TABLE>
<CAPTION>
CLASS A-3 NOTES
-------------------------------------------
0% 20% 22% 25% 30% 35%
DATE ---- ----- ----- ----- ----- ----
<S> <C> <C> <C> <C> <C> <C>
</TABLE>
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USE OF PROCEEDS
The net proceeds from the sale of the Class A notes, after being exchanged
pursuant to the currency swap, will amount to A$[ ] and will be used by the
issuer trustee to acquire from the seller equitable title to the housing loans
and related mortgages.
LEGAL ASPECTS OF THE HOUSING LOANS
The following discussion is a summary of the material legal aspects of
Australian retail housing loans and mortgages. It is not an exhaustive analysis
of the relevant law. Some of the legal aspects are governed by the law of the
applicable State or Territory. Laws may differ between States and Territories.
The summary does not reflect the laws of any particular jurisdiction or cover
all relevant laws of all jurisdictions in which a mortgaged property may be
situated, although it reflects the material aspects of the laws of New South
Wales, without referring to any specific legislation of that State.
GENERAL
There are two parties to a mortgage. The first party is the mortgagor, who
is either the borrower and homeowner or, where the relevant loan is guaranteed
and the guarantee is secured by a mortgage, the guarantor. The mortgagor grants
the mortgage over their property. The second party is the mortgagee, who is the
lender. 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. If the housing loan is not secured by a first ranking mortgage the
seller will equitably assign to the issuer trustee all prior ranking registered
mortgages in relation to that housing loan. Each borrower under the housing
loans is prohibited under its loan documents from creating another mortgage or
other security interest over the relevant mortgaged property without the
consent of St.George Bank.
NATURE OF HOUSING LOANS AS SECURITY
There are a number of different forms of title to land in Australia. The
most common form of title in Australia is "Torrens title." Only land which is
Torrens title land may be used to secure housing loans, and thus constitute
mortgaged property.
"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
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leases, mortgages, registered easements and other dealings to which it is
subject. The certificate is conclusive evidence, except in limited
circumstances, such as fraud, of the matters stated in it.
Some Torrens title property securing housing loans and thus comprised in
the mortgaged property, will be "strata title" or "urban leasehold."
STRATA TITLE
"Strata title" was developed to enable 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 apartment unit. 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 a "body corporate" for the
benefit of the individual proprietors. All proprietors are members of the 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.
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 an apartment 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 title known as urban
leasehold. Mortgaged property in that jurisdiction comprises a Crown lease and
developments on the land are subject to the terms of that lease. Any such
lease:
o 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
o where it involves residential property, is 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 recognized by Australian courts. Native title to
particular property is based on the traditional laws and customs of indigenous
Australians and
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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 would 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.
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 some 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 both
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 or registered title. However, registration does not transfer title in
the property and 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 creditor or proposed creditor 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 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 his or her debt, a discharge executed by the
mortgagee is lodged with the relevant registrar by the mortgagor or the
mortgagee and the mortgage is noted as having been released.
ST.GEORGE BANK AS MORTGAGEE
St.George Bank is, and until a Title Perfection Event occurs intends to
remain, the registered mortgagee of all the mortgages. The 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 St.George Bank, as servicer, will
undertake any necessary enforcement action with respect to defaulted housing
loans and
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mortgages. Following a Title Perfection Event, the issuer trustee is entitled,
under an irrevocable power of attorney granted to it by St.George Bank, to be
registered as mortgagee of the mortgages. Until that registration is achieved,
the issuer trustee or the manager is entitled, but not obligated, to lodge
caveats on the register publicly to notify its interest in the mortgages.
ENFORCEMENT OF REGISTERED MORTGAGES
Subject to the discussion in this section, if a borrower defaults under a
housing loan the loan documents provide that all moneys under the housing 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:
o 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.
o The mortgagee may, in limited circumstances, lease the property to
third parties.
o The mortgagee may foreclose on the property. Under foreclosure
procedures, the mortgage extinguishes 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.
o The mortgagee may appoint a receiver to deal with income from the
property or exercise other rights delegated to the receiver by the
mortgagee. A receiver is the agent of the mortgagor and so, unlike
when the mortgagee enters possession of property, in theory the
mortgagee is not liable for the receiver's acts or as occupier of the
property. In practice, however, the receiver will require indemnities
from the mortgagee that appoints it.
o 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 in registered mortgages under
the relevant Torrens title legislation. The Torrens title legislation
prescribes certain 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 the
absolute owner of the property.
A mortgagee's ability to call in all amounts under a housing loan or
enforce a mortgage which is subject to the Consumer Credit Legislation is
limited by various
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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 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.
BANKRUPTCY
The insolvency of a natural person is governed by the provisions of the
Bankruptcy Act 1966 of Australia, 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, or
file a claim, 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:
o the disposition was made to defraud creditors; or
o the disposition was made by an insolvent debtor within 6 months of the
petition for bankruptcy and that disposition 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
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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:
o 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;
o within a prescribed period prior to the commencement of the winding up
of the company; and
o when 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 takes 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. To the extent that the issuer
trustee or a receiver appointed on its behalf incurs any such liabilities, it
will be entitled to be indemnified out of the assets of the trust.
INSOLVENCY CONSIDERATIONS
The current transaction is designed to mitigate insolvency risk. For
example, the equitable assignment of the housing loans by St.George Bank to the
issuer trustee should ensure that the housing loans are not assets available to
the liquidator or creditors of St.George Bank in the event of an insolvency of
St.George Bank. 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
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Mortgagees. See "Description of the Transaction Documents - Security Trust Deed
- - Enforcement of the Charge". 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. The proceeds of enforcement of the security trust deed
are to be applied by the security trustee as set out in "Description of the
Transaction Documents - The Security Trust Deed - Priorities under the Security
Trust Deed." If the proceeds from enforcement of the security trust deed are
not sufficient to redeem the Class A notes in full, some or all of the Class A
noteholders will incur a loss.
TAX TREATMENT OF INTEREST ON 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 loans and other non-capital expenditures
relating to non-owner occupied properties that generate taxable income are
generally allowable as tax deductions.
CONSUMER CREDIT LEGISLATION
Under the Consumer Credit Legislation a borrower has the right to apply to
a court to do the following, among other things:
o vary the terms of a housing loan on the grounds of hardship or that it
is an unjust contract;
o reduce or cancel any interest rate payable on a housing loan if the
interest rate is changed in a way which is unconscionable;
o have certain provisions of a housing loan which are in breach of the
legislation declared unenforceable;
o obtain an order for a civil penalty against the seller, the amount of
which may be set off against any amount payable by the borrower under
the applicable housing loan; or
o obtain restitution or compensation from the seller in relation to
breaches of the Consumer Credit Legislation in relation to a housing
loan.
The issuer trustee will become liable for compliance with the Consumer
Credit Legislation if it acquires legal title to the housing loans and will take
this legal title subject to any breaches of the Consumer Credit Legislation by
the seller. In particular, once the issuer trustee acquires legal title it may
become liable to orders of the type referred to in the last two bullet points
listed above in relation to breaches of the Consumer Credit Legislation.
Criminal fines may be imposed on the seller in respect of any breaches of the
Consumer Credit Legislation by it while it held legal title to the housing
loans. 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
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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. Any order under the Consumer Credit Legislation 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 to you under the notes. The seller
has indemnified the issuer trustee against any loss the issuer trustee may incur
as a result of a failure by the seller to comply with the Consumer Credit
Legislation in respect of a mortgage.
In addition:
o each of the custodian, in respect of custodial services provided by
it, and the servicer, in respect of its servicing obligations, have
undertaken to comply with the Consumer Credit Legislation where
failure to do so would mean the issuer trustee became liable to pay
any civil penalty payments; and
o each of the seller and the servicer further undertakes to ensure that
each housing loan continues to satisfy certain eligibility criteria
which includes the requirement that the housing loan complies, in all
material respects, with applicable laws, including the Consumer Credit
Legislation.
UNITED STATES FEDERAL INCOME TAX MATTERS
OVERVIEW
The following is a summary of all material United States federal income
tax consequences of the purchase, ownership and disposition of the Class A
notes by investors who are subject to United States federal income tax. This
summary is based upon current provisions of the Internal Revenue Code of 1986,
as amended, proposed, temporary and final Treasury regulations under the Code,
and published rulings and court decisions, all of which are subject to change,
possibly retroactively, or to a different interpretation at a later date by a
court or by the IRS. The parts of this summary which relate to matters of law
or legal conclusions represent the opinion of Mayer, Brown & Platt, special
United States federal tax counsel for the manager, and are as qualified in this
summary. We have not sought and will not seek any rulings from the IRS about
any of the United States federal income tax consequences we discuss, and we
cannot assure you that the IRS will not take contrary positions.
Mayer, Brown & Platt has prepared or reviewed the statements under the
heading "United States Federal Income Tax Matters" and is of the opinion that
these statements discuss all material United States federal income tax
consequences to investors generally of the purchase, ownership and disposition
of the Class A notes. However, the following discussion does not discuss and
Mayer, Brown & Platt is unable to opine as to the unique tax consequences of
the purchase, ownership and disposition of the Class A notes by investors that
are given special treatment under the United States federal income tax laws,
including:
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o banks and thrifts;
o insurance companies;
o regulated investment companies;
o dealers in securities;
o investors that will hold the notes as a position in a "straddle" for
tax purposes or as a part of a "synthetic security," "conversion
transaction" or other integrated investment comprised of the notes and
one or more other investments;
o foreign investors;
o trusts and estates; and
o pass-through entities, the equity holders of which are any of the
foregoing.
Additionally, the discussion regarding the Class A notes is limited to the
United States federal income tax consequences to the initial investors and not
to a purchaser in the secondary market and is limited to investors who will
hold the Class A notes as "capital assets" within the meaning of Section 1221
of the Code.
It is suggested that prospective investors consult their own tax advisors
about the United States federal, state, local, foreign and any other tax
consequences to them of the purchase, ownership and disposition of the Class A
notes, including the advisability of making any election discussed under
"Market Discount".
The issuer trustee will be reimbursed for any United States federal income
taxes imposed on it in its capacity as trustee of the trust out of the assets
of the trust. Also, based on the representation of the manager that the trust
does not and will not have an office in the United States, and that the trust
is not conducting, and will not conduct any activities in the United States,
other than in connection with its issuance of the Class A notes, in the opinion
of Mayer, Brown & Platt, the issuer trustee will not be subject to United
States federal income tax.
GENERAL
Mayer, Brown & Platt is of the opinion that you will be required to report
interest income on the Class A notes you hold in accord with your method of
accounting.
SALE OF NOTES
Mayer, Brown & Platt is of the opinion that if you sell a Class A note,
you will recognize gain or loss equal to the difference between the amount
realized on the sale, other than amounts attributable to, and taxable as,
accrued interest, and your adjusted tax basis in the Class A note. Your
adjusted tax basis in a note will equal your cost for the Class A note,
decreased by any amortized premium and any payments other than interest made on
the Class A note and increased by any market discount or original issue
discount previously included in your income. Any gain or loss will generally be
a capital gain or loss, other than amounts representing accrued
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interest or market discount, and will be long-term capital gain or loss if the
Class A note was held as a capital asset for more than one year. In the case of
an individual taxpayer, the maximum long-term capital gains tax rate is lower
than the maximum ordinary income tax rate. Any capital losses realized may be
deducted by a corporate taxpayer only to the extent of capital gains and by an
individual taxpayer only to the extent of capital gains plus $3,000 of other
U.S. income.
MARKET DISCOUNT
In the opinion of Mayer, Brown & Platt, you will be considered to have
acquired a Class A note at a "market discount" to the extent the remaining
principal amount of the note exceeds your tax basis in the note, unless the
excess does not exceed a prescribed de minimis amount. If the excess exceeds
the de minimis amount, you will be subject to the market discount rules of
Sections 1276 and 1278 of the Code with regard to the note.
In the case of a sale or other disposition of a Class A note subject to
the market discount rules, Section 1276 of the Code requires that gain, if any,
from the sale or disposition be treated as ordinary income to the extent the
gain represents market discount accrued during the period the note was held by
you, reduced by the amount of accrued market discount previously included in
income.
In the case of a partial principal payment of a Class A note subject to
the market discount rules, Section 1276 of the Code requires that the payment
be included in ordinary income to the extent the payment does not exceed the
market discount accrued during the period the note was held by you, 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 with principal payable in two or more installments, such
as the Class A notes, the manner in which market discount is to be accrued will
be described in Treasury regulations not yet issued. Until these Treasury
regulations are issued, you should follow the explanatory conference committee
Report to the Tax Reform Act of 1986 for your accrual of market discount. This
Conference Committee Report indicates that holders of these obligations may
elect to accrue market discount either on the basis of a constant interest rate
or as follows:
o for those obligations that have original issue discount, market
discount shall be deemed to accrue in proportion to the accrual of
original issue discount for any accrual period; and
o for those obligations which do not have original issue discount, 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 at the beginning of the accrual
period.
Under Section 1277 of the Code, if you incur or continue debt that is used
to purchase a Class A note subject to the market discount rules, and the
interest paid
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or accrued on this debt in any taxable year exceeds the interest and original
issue discount currently includible in income on the note, deduction of this
excess interest must be deferred to the extent of the market discount allocable
to the taxable year. The deferred portion of any interest expense will
generally be deductible when the market discount is included in income upon the
sale, repayment, or other disposition of the indebtedness.
Section 1278 of the Code allows a taxpayer to make an election to include
market discount in gross income currently. If an election is made, the
previously described rules of Sections 1276 and 1277 of the Code will not apply
to the taxpayer.
Due to the complexity of the market discount rules, we suggest that you
consult your tax advisors as to the applicability and operation of these rules.
PREMIUM
In the opinion of Mayer, Brown & Platt, you will generally be considered
to have acquired a Class A note at a premium if your tax basis in the note
exceeds the remaining principal amount of the note. In that event, if you hold
a Class A note as a capital asset, you may amortize the premium as an offset to
interest income under Section 171 of the Code, with corresponding reductions in
your tax basis in the note if you have made an election under Section 171 of
the Code. Generally, any amortization is on a constant yield basis. However, in
the case of bonds with principal payable in two or more installments, like the
Class A notes, the previously discussed conference report, which indicates a
Congressional intent that amortization be in accordance with the rules that
will apply to the accrual of market discount on these obligations, should be
followed for the amortization of such premium. We suggest that you consult your
tax advisor as to the applicability and operation of the rules regarding
amortization of premium.
BACKUP WITHHOLDING
Mayer, Brown & Platt is of the opinion that, backup withholding taxes will
be imposed on payments to you at the rate of 31% on interest paid, and original
issue discount accrued, if any, on the Class A notes if, upon issuance, you
fail to supply the manager or its broker with a certified statement, under
penalties of perjury, containing your name, address, correct taxpayer
identification number, and a statement that you are not required to pay backup
withholding. Exempt investors, such as corporations, tax-exempt organizations,
qualified pension and profit sharing trusts, individual retirement accounts or
non-resident aliens who provide certification of their status as non-resident
are not subject to backup withholding. Information returns will be sent
annually to the IRS by the manager and to you stating the amount of interest
paid, original issue discount accrued, if any, and the amount of tax withheld
from payments on the Class A notes. We suggest that you consult your tax
advisors about your eligibility for, and the procedure for obtaining, exemption
from backup withholding.
Recently, the Treasury Department issued new regulations which modify the
backup withholding and information reporting rules described in this section.
The
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new regulations will generally be effective for payments made after December
31, 2000, subject to transition rules. We suggest that you consult your own tax
advisors regarding these new regulations.
AUSTRALIAN TAX MATTERS
The following statements with respect to Australian taxation are the
material tax consequences to the United States Class A noteholders of holding
Class A notes and are based on advice received by the manager. It is suggested
that purchasers of Class A 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 notes.
PAYMENTS OF PRINCIPAL, PREMIUMS AND INTEREST
Under existing Australian tax law, non-resident holders of notes or
interests in any global note, other than persons holding such securities or
interest as part of a business carried on, at or through a permanent
establishment in Australia, are not subject to Australian income tax on
payments of interest or amounts in the nature of interest, other than interest
withholding tax, which is currently 10%, on interest or amounts in the nature
of interest paid on the 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 Income Tax Assessment Act 1936 of the
Commonwealth of Australia, an exemption from Australian interest withholding
tax applies provided all prescribed conditions are met.
These conditions are:
o the issuer trustee is a company that is a resident of Australia when
it issues the notes and when interest, as defined in section 128A
(1AB) of the Income Tax Assessment Act, is paid; and
o the notes, or a global bond or note or interests in such a global bond
or note, were issued in a manner which satisfied the public offer test
as prescribed under section 128F of the Income Tax Assessment Act.
The issuer trustee will seek to issue the Class A notes and interests in
any global Class A note in a way that will satisfy the public offer test and
otherwise meet the requirements of section 128F of the Income Tax Assessment
Act including by listing the Class A notes.
The public offer test will not be satisfied if the issuer trustee knew or
had reasonable grounds to suspect that the Class A notes were being or would
later be acquired directly or indirectly by an associate of the issuer trustee
within the meaning of that section, other than in the capacity of a dealer,
manager or underwriter in relation to the placement of a note. "Associate" for
these purposes is widely defined and means, generally speaking, in relation to
an issuer acting in the capacity of a trustee, the beneficiaries of the trust.
Thus the relevant associates of the issuer trustee in the present case will be
the manager as the residual beneficiary of the trust and the associates of the
manager and the other beneficiaries of the trust, if any, from time to time.
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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 of the Income Tax Assessment Act, which, as
discussed, would be an associate of the residual beneficiary, if, at the time
of the payment, the issuer trustee knows, or has reasonable grounds to suspect,
that the person is an associate.
If, for any reason, the interest paid by the issuer trustee is not exempt
from interest withholding tax, the treaty titled "Convention for the Avoidance
of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes
on Income" between the United States and Australia may apply. This treaty
provides that interest which has its source in Australia, and to which a United
States resident, as defined in the treaty and who is entitled to the benefit of
the treaty, is beneficially entitled, may be taxed in Australia, but that any
tax charged shall not exceed 10% of the gross amount of interest. However, this
provision will not apply where the indebtedness giving rise to the interest
entitlement is effectively connected with:
o the United States resident beneficial owner's permanent establishment,
at or through which it carries on business in Australia; or
o the United States resident beneficial owner's fixed base, situated in
Australia, from which it performs personal services.
PROFIT ON SALE
Under existing Australian law, non-resident holders of notes will not be
subject to Australian income tax on profits derived from the sale or disposal
of the notes provided that:
o the notes are not held as part of a business carried on, at or through
a permanent establishment in Australia; and
o the profits do not have an Australian source.
The source of any profit on the disposal of notes will depend on the
factual circumstances of the actual disposal. Where the 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 a business carried on, at or through a permanent
establishment in Australia, 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 notes as interest for withholding tax purposes
and which amounts are not covered by the exemption conditions in section 128F
of the Income Tax Assessment Act. These rules can apply when:
o notes are sold for any amount in excess of their issue price prior to
maturity to a purchaser who is either a resident who does not acquire
the notes in the course of carrying on business in the country outside
Australia at or through a permanent establishment in that country or a
non-resident that acquires the notes in the course of carrying on a
business in Australia at or through a permanent establishment in
Australia; or
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o notes are sold to an Australian resident in connection with a "washing
arrangement" as defined in the Income Tax Assessment Act.
GOODS AND SERVICES TAX
From July 1, 2000, a goods and services tax will apply. If an entity makes
any taxable supplies on or after July 1, 2000, it will have to pay goods and
services tax equal to 1/11th of the total consideration received for the
supply.
In the case of supplies by the issuer trustee, if the supply is
o "GST free," the issuer trustee does not pay a goods and services tax
on the supply and can obtain goods and services tax credits for goods
and services taxes paid on things acquired to make the supply; or
o "input taxed," which includes financial supplies, the issuer trustee
does not pay a goods and services tax on the supply, but is not
entitled to goods and services tax credits for goods and services tax
paid on things acquired to make the supply.
On the basis of the current goods and services tax legislation, the issue
of the Class A notes and the payment of interest or principal on the Class A
notes to you will not be taxable supplies.
Services provided to the issuer trustee will be a mixture of taxable and
input taxed supplies for goods and services tax purposes. If a supply is
taxable, the supplier has the primary obligation to account for goods and
services tax in respect of that supply and must rely on a contractual provision
to recoup that goods and services tax from the issuer trustee. Under the
supplementary terms notice, certain fees paid by the issuer trustee, namely the
manager's fee, the issuer trustee's fee, the security trustee's fee and the
servicer's fee, will only be able to be increased by reference to the
supplier's goods and services tax liability, if any, if:
o the issuer trustee, the manager and the recipient of the relevant fee
agree, which agreement shall not be unreasonably withheld; and
o the increase will not result in the downgrading or withdrawal of the
rating of any notes.
If other fees payable by the issuer trustee are treated as the
consideration for a taxable supply under the goods and services tax legislation
or otherwise may be increased by reference to the relevant supplier's goods and
services tax liability, the issuer trustee may not be entitled to a full input
tax credit for that increase and the Trust Expenses will increase, resulting in
a decrease in the funds available to the trust to pay you.
The goods and services tax may increase the cost of repairing or replacing
damaged properties offered as security for housing loans. However, it is a
condition of St.George Bank's loan contract and mortgage documentation that the
borrower must maintain full replacement value property insurance at all times
during the loan term.
The goods and services tax legislation, in certain circumstances, treats
the issuer trustee as making a taxable supply if it enforces security by
selling the mortgaged
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property and applying the proceeds of sale to satisfy the housing loan. The
issuer trustee will have to account for goods and services tax out of the sale
proceeds, with the result that the remaining sale proceeds may be insufficient
to cover the unpaid balance of the related loan. However, the general position
is that a sale of residential property is an input taxed supply for goods and
services tax purposes and so the enforced sale of property which secures the
housing loans will generally not be treated as a taxable supply under these
provisions. As an exception, the issuer trustee may still have to account for
goods and services tax out of the proceeds of sale recovered when a housing
loan is enforced where the borrower is an enterprise which is registered for
goods and services tax purposes, uses the mortgaged property as an asset of its
enterprise and any of the following are relevant:
o the property is no longer being used as a residence; or
o the property is used as commercial residential premises such as a
hostel or boarding house; or
o the borrower is the first vendor of the property - the borrower built
the property; or
o the mortgaged property has not been used predominantly as a residence.
Because the issuer trustee is an insured party under the mortgage
insurance policies, it may in certain limited circumstances have to account for
goods and services tax in respect of any claim payment received. Generally, if
certain compliance procedures have been followed, the insured does not have to
account for goods and services tax in respect of the claim payment.
Any reduction as a result of goods and services tax in the amount
recovered by the issuer trustee when enforcing the housing loans will decrease
the funds available to the trust to pay you to the extent not covered by the
mortgage insurance policies. The extent to which the issuer trustee is able to
recover an amount on account of the goods and services tax, if any, payable on
the proceeds of sale in the circumstances described in this section, will
depend on the terms of the related mortgage insurance policy.
OTHER TAXES
No stamp, issue, registration or similar taxes are payable in Australia in
connection with the issue of the Class A notes. Furthermore, a transfer of, or
agreement to transfer, notes executed outside of Australia will not be subject
to Australian stamp duty.
TAX REFORM PROPOSALS
Under present tax laws, the issuer trustee is not liable to income tax in
respect of the income of the trust. The Government has proposed to amend the
law from 1 July 2001 to tax trusts as companies. No legislation, or detail in
respect of the proposal, has yet been made available by the Government, and
therefore it is not possible to determine whether the proposal will affect the
transactions contemplated in respect of the notes or the manner in which it
might affect those transactions. In
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particular, it is not possible to determine
whether the implementation of the proposal could result in the issuer trustee
having less funds available to meet its obligations, including its obligations
to noteholders.
ENFORCEMENT OF FOREIGN JUDGMENTS IN AUSTRALIA
Crusade Management Limited 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 Crusade Management Limited in respect of a 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 Crusade Management Limited 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:
o the proceedings in New York State or United States Federal Court, as
applicable, involved a denial of the principles of natural justice;
o the judgment is contrary to the public policy of the relevant
Australian jurisdiction;
o the judgment was obtained by fraud or duress or was based on a clear
mistake of fact;
o the judgment is a penal or revenue judgment; or
o 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. Crusade Management Limited 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
proceeding arising out of this offering. Crusade Management Limited has
appointed CT Corporation System, 111 Eighth Avenue, 13th Floor, New York, New
York 10011, as its agent upon whom process may be served in any such action.
All of the directors and executive officers of Crusade Management Limited,
and certain experts named in this prospectus, 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 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.
Crusade Management Limited has been advised by its Australian counsel Allen
Allen & Hemsley, that, based on the restrictions discussed in this section,
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.
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EXCHANGE CONTROLS AND LIMITATIONS
Under temporary Australian foreign exchange controls, which may change in
the future, payments by an Australian resident to, or on behalf of the
following payees may only be made with Reserve Bank of Australia approval:
o the Government of Iraq or its agencies or nationals;
o the authorities of the Federal Republic of Yugoslavia (Serbia and
Montenegro);
o the Government of Libya or any public authority or controlled entity
of the Government of Libya;
o the Taliban (also known as the Islamic Emirate of Afghanistan) or any
undertaking owned or controlled, directly or indirectly, by the
Taliban; or
o the National Union for Total Independence of Angola ("UNITA") as an
organisation, senior officials of UNITA or adult members of the
immediate families of senior officials of UNITA.
ERISA CONSIDERATIONS
Subject to the considerations discussed in this section, the notes are
eligible for purchase by employee benefit plans.
Section 406 of the Employee Retirement Income Security Act and Section
4975 of the Code prohibit a pension, profit-sharing or other employee benefit
plan, as well as individual retirement accounts and certain types of Keogh
Plans from engaging in certain transactions with persons that are "parties in
interest" under ERISA or "disqualified persons" under the Code with respect to
these Benefit Plans. A violation of these "prohibited transaction" rules may
result in an excise tax or other penalties and liabilities under ERISA and the
Code for these 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.
Some transactions involving the purchase, holding or transfer of the notes
might be deemed to constitute prohibited transactions under ERISA and the Code
if assets of the trust were deemed to be assets of a Benefit Plan. Under a
regulation issued by the United States Department of Labor, the assets of the
trust 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 trust and none of the exceptions contained in the regulation is applicable.
An equity interest is defined under the 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, at the time of their initial issuance
that the notes should be treated as debt without substantial equity features
for purposes of the regulation and that the notes do not constitute equity
interests in the trust for purposes of the regulation. The debt
characterization of the notes could change after their initial issuance if the
trust incurs losses.
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However, without regard to whether the notes are treated as an equity
interest for these purposes, the acquisition or holding of the notes by or on
behalf of a Benefit Plan could be considered to give rise to a prohibited
transaction if the trust, the issuer trustee, the servicer, the manager, the
note trustee, the seller or the security trustee is or becomes a party in
interest or a disqualified person with respect to these Benefit Plans. 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 a note. Included among these exemptions are:
o Prohibited Transaction Class Exemption 96-23, regarding transactions
effected by "in-house asset managers";
o Prohibited Transaction Class Exemption 90-1, regarding investments by
insurance company pooled separate accounts;
o Prohibited Transaction Class Exemption 95-60, regarding transactions
effected by "insurance company general accounts";
o Prohibited Transaction Class Exemption 91-38, regarding investments by
bank collective investment funds; and
o Prohibited Transaction Class Exemption 84-14, regarding transactions
effected by "qualified professional asset managers."
By your acquisition of a note, you shall be deemed to represent and
warrant that your purchase and holding of the 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.
If you are a plan fiduciary considering the purchase of any of the notes,
you should consult your tax and legal advisors regarding whether the assets of
the Trust would be considered plan assets, the possibility of exemptive relief
from the prohibited transaction rules and other issues and their potential
consequences.
LEGAL INVESTMENT CONSIDERATIONS
The Class A notes will not constitute "mortgage related securities" for
purposes of the Secondary Mortgage Market Enhancement Act of 1984, because the
originator of the housing loans was not subject to United States state or
federal regulatory authority. Accordingly, some U.S. institutions with legal
authority to invest in comparably rated securities based on such housing loans
may not be legally authorized to invest in the Class A notes. No representation
is made as to whether the 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 any regulatory authorities. You are urged to consult with your
counsel concerning the status of the Class A notes as legal investments for
you.
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AVAILABLE INFORMATION
Crusade Management Limited, as manager, has filed with the SEC a
registration statement under the Securities Act with respect to the Class A
notes offered pursuant to this prospectus. For further information, reference
should be 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 SEC at 450 Fifth Street, N.W.,
Washington, D.C. 20549; and at the SEC'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, including any amendments or exhibits, may be obtained from the Public
Reference Section of the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549,
at prescribed rates. The SEC 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 SEC at the
address "http://www.sec.gov."
RATINGS OF THE NOTES
The issuance of the Class A-1, Class A-2 and Class A-3 notes will be
conditioned on obtaining a rating of "AAA" by Standard & Poor's, "Aaa" by
Moody's and "AAA" by Fitch IBCA. The issuance of the Class B notes will be
conditioned on obtaining a rating of "AAA" by Standard & Poor's, "Aa1" by
Moody's and "AAA" by Fitch IBCA. You should independently evaluate the security
ratings of each class of notes from similar ratings on other types of
securities. A security rating is not a recommendation to buy, sell or hold
securities. A rating does not address the market price or suitability of the
notes for you. A rating may be subject to revision or withdrawal at any time by
the rating agencies. 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 of the notes. The ratings of the Class A 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 interest collections after payment of interest on
the notes and the trust's expenses, the mortgage insurance policies, the
availability of the Liquidity Facility, the creditworthiness of the swap
providers and the mortgage insurer and the foreign currency rating of
Australia. The Commonwealth of Australia's current [foreign] currency long term
debt rating is "AAA" by Standard & Poor's, "Aaa" by Moody's and "AAA" by Fitch
IBCA. 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. None of the rating agencies have been involved in the
preparation of this prospectus.
PLAN OF DISTRIBUTION
UNDERWRITING
Under the terms and subject to the conditions contained in the
underwriting agreement among St.George Bank, the issuer trustee and the
manager, the issuer
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trustee has agreed to sell to the underwriters, for whom
Credit Suisse First Boston Corporation is acting as representative, the
following respective principal amounts of the Class A notes:
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL PRINCIPAL
AMOUNT OF AMOUNT OF AMOUNT OF
CLASS A-1 CLASS A-2 CLASS A-3
NOTES NOTES NOTES
UNDERWRITER (US$) (US$) (US$)
- ------------- ----------- ----------- -----------
<S> <C> <C> <C>
[INSERT]
</TABLE>
The underwriting agreement provides that the underwriters are obligated to
purchase all of the Class A notes if any are purchased.
The underwriters propose to offer the Class A notes initially at the
public offering prices on the cover page of this prospectus and to selling
group members at the price less a concession not in excess of the respective
amounts set forth in the following table, expressed as a percentage of the
relative principal balance. The underwriters and selling group members may
reallow a discount not in excess of the respective amounts set forth in the
following table to other broker/dealers. After the initial public offering, the
public offering price and concessions and discounts to broker/dealers may be
changed by the representative of the underwriters.
<TABLE>
<CAPTION>
SELLING REALLOWANCE
CLASS CONCESSIONS DISCOUNT
- ------------- ------------- ------------
<S> <C> <C>
A-1 ......... [ %] [ %]
A-2 ......... [ %] [ %]
A-3 ......... [ %] [ %]
------------- ------------
</TABLE>
St.George Bank estimates that the out-of-pocket expenses for this offering
will be approximately US$[ ].
Credit Suisse First Boston Corporation has informed St.George Bank and the
manager that the underwriters do not expect discretionary sales by them to
exceed [5%] of the principal balance of the Class A notes.
St.George Bank and the manager have agreed to indemnify the underwriters
against civil liabilities under the Securities Act, or contribute to payments
which the underwriters may be required to make in that respect.
The representative, on behalf of the underwriters, may engage in
over-allotment, stabilizing transactions, syndicate covering transactions and
penalty bids in accordance with Regulation M under the Exchange Act.
o Over-allotment involves syndicate sales in excess of the offering
size, which creates a syndicate short position;
o Stabilizing transactions permit bids to purchase the underlying
security so long as the stabilizing bids do not exceed a specified
maximum;
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o Syndicate covering transactions involve purchases of the Class A notes
in the open market after the distribution has been completed in order
to cover syndicate short positions;
o Penalty bids permit the underwriters to reclaim a selling concession
from a syndicate member when the Class A notes originally sold by a
syndicate member are purchased in a syndicate covering transaction to
cover syndicate short positions.
Stabilizing transactions, syndicate covering transactions and penalty bids
may cause the price of the Class A notes to be higher than it would otherwise
be in the absence of these transactions. These transactions, if commenced, may
be discontinued at any time.
In the ordinary course of its business, some of the underwriters and some
of their affiliates have in the past and may in the future engage in commercial
and investment banking activities with St.George Bank and its affiliates. In
addition, one of the underwriters, Deutsche Bank Securities Inc., is affiliated
with the currency swap provider, Bankers Trust Corporation, New York.
OFFERING RESTRICTIONS
UNITED KINGDOM
Each underwriter has severally represented and agreed with the issuer
trustee that:
o it has not offered or sold and will not offer or sell any Class A
notes to persons in the United Kingdom prior to admission of the Class
A notes to listing in accordance with Part IV of 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 business 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 (as amended) or the Financial
Services Act;
o 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 Class A notes in, from or otherwise involving the United
Kingdom; and
o 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
issue of the Class A 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
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.
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AUSTRALIA
The Class A 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. Each
underwriter has severally represented and agreed that in connection with the
initial distribution of the Class A notes it:
o has not, directly or indirectly, offered for subscription or purchase
or issue invitations to subscribe for or buy nor has it sold, the
Class A notes;
o will not, directly or indirectly, offer for subscription or purchase
or issued invitations to subscribe for or buy nor will it sell the
Class A notes; and
o 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 any of the
following:
o actually known by the underwriters, without an obligation on the
underwriters to make any inquiry, to be a resident of Australia for
the purposes of section 128F of the Tax Act; or
o an associate of Crusade Management Limited within the meaning of that
section, which includes associates of St.George Bank, other than in
the capacity of a dealer or underwriter in relation to a placement of
the notes, as identified on a list provided by St.George Bank.
LISTING AND GENERAL INFORMATION
LISTING
An application has been made to the London Stock Exchange Limited to admit
the Class A-1, Class A-2 and Class A-3 notes to the Official List. This
prospectus, including Appendix I, constitutes listing particulars with regard
to the issuer trustee and the Class A-1, Class A-2 and Class A-3 notes, in
accordance with the listing rules made under Part IV of the Financial Services
Act. Copies of the prospectus have been delivered to the Registrar of Companies
in England and Wales for registration in accordance with Section 149 of the
Financial Services Act.
The listing of the Class A 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 Class A notes on the London Stock
Exchange will be granted on or about [ ], subject to the issuance of the
Class A notes. The Class A notes will be issued in the form of one or more
book-entry notes.
AUTHORIZATION
The issuer trustee has obtained all necessary consents, approvals and
authorizations in connection with the issue and performance of the Class A
notes. The issue of the Class A notes has been authorized by the resolutions of
the board of directors of AXA Trustees Limited passed on [ ].
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LITIGATION
The issuer trustee is not, and has not been, involved in any litigation or
arbitration proceedings that may have, or have had during the twelve months
preceding the date of this prospectus, a significant effect on its financial
position nor, so far as it is aware, are any such litigation or arbitration
proceedings pending or threatened.
EUROCLEAR AND CLEARSTREAM, LUXEMBOURG
The Class A notes have been accepted for clearance through Euroclear and
Clearstream, Luxembourg with the following CUSIP numbers and ISINs for each
class of notes:
<TABLE>
<CAPTION>
CUSIP ISIN
- ------- -----
<S> <C>
</TABLE>
TRANSACTION DOCUMENTS AVAILABLE FOR INSPECTION
You may inspect copies of the following transaction documents during normal
business hours on any weekday, excluding Saturdays, Sundays and public holidays,
at the offices of HSBC Bank USA c/o HSBC Bank plc, Issuer Services, Mariner
House, Pepys Street, London EC 3N 4DA, during the period of fourteen days from
the date of this prospectus:
o the Constitution of the issuer trustee;
o the Master Trust Deed among St.George Bank, the issuer trustee and the
manager, dated March 14, 1998;
o the Servicing Agreement among the issuer trustee, the manager and the
servicer, dated March 19, 1998;
o the Custodian Agreement among the issuer trustee, the manager and the
custodian, dated March 19, 1998;
o the Deed of Indemnity between St.George Bank, the issuer trustee, the
manager and the custodian, dated March 19, 1998;
o the following, which, prior to the closing date, will be in draft
form:
o the Supplementary Terms Notice among the issuer trustee, the
manager, the security trustee, the note trustee, the seller, the
servicer and the custodian, dated on or about [ ];
o the Security Trust Deed among the issuer trustee, the manager,
the security trustee and the note trustee, dated on or about
[ ];
o the Note Trust Deed among the issuer trustee, the manager and the
note trustee, dated on or about [ ];
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o the Agency Agreement among the issuer trustee, the manager the
note trustee, the principal paying agent and the calculation
agent, dated on or about [ ];
o the Redraw Facility Agreement among the issuer trustee, the
manager and the redraw facility provider, dated on or about
[ ];
o the basis swap among the issuer trustee, the manager, the basis
swap provider and the standby basis swap provider, together with
the related schedule and confirmation, dated on or about
[ ];
o the fixed-floating rate swap among the issuer trustee, the
manager, the fixed-floating rate swap provider and the standby
fixed-floating rate swap provider, together with the related
schedule and confirmation dated on or about [ ];
o the currency swap between the issuer trustee and the currency
swap provider, together with the related schedule and
confirmations, dated on or about [ ];
o the mortgage insurance policy among St.George Bank, the issuer
trustee and Housing Loans Insurance Corporation Pty Limited,
dated on or about [ ];
o the powers of attorney from St.George Bank, dated on or about
[ ];
o the Seller Loan Agreement among the issuer trustee, the manager
and the seller, dated on or about [ ]; and
o the Underwriting Agreement among St.George Bank, the manager, the
issuer trustee and the underwriters, dated on or about [ ].
CONSENTS TO OPINIONS
Mayer, Brown & Platt has given and not withdrawn its written consent to
the inclusion in this prospectus of its opinion in the form and context in
which it is included on pages [ ] and [ ] through [ ] and has authorized the
content of its opinion for the purposes of section 152(1)(e) of the Financial
Services Act.
Allen Allen & Hemsley has given and not withdrawn its written consent to
the inclusion in the prospectus of its opinion in the form and context in which
it is included on pages [ ] through [ ] and [ ] and has authorized the
content of its opinion for the purposes of section 152(1)(e) of the Financial
Services Act.
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:
o the Class A notes will initially be issued in the form of book-entry
notes and will be held by Cede & Co., as nominee of DTC;
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o in connection with the issue, DTC will confer rights in the Class A
notes to the noteholders and will record the existence of those
rights; and
o as a result of the issue of the Class A notes in this manner, these
rights will be created.
LEGAL MATTERS
Mayer, Brown & Platt, New York, New York, will pass upon some legal
matters with respect to the Class A notes, including the material U.S. federal
income tax matters, for St.George Bank and Crusade Management Limited. Allen
Allen & Hemsley, Sydney, Australia, will pass upon some legal matters,
including the material Australian tax matters, with respect to the Class A
notes for St.George Bank and Crusade Management Limited. [ ] will pass upon
some legal matters with respect to the Class A notes for the underwriters.
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GLOSSARY
A$ CLASS A INTEREST AMOUNT... means, for any quarterly payment date, the
aggregate sum of the amount for each class of
Class A notes, in Australian dollars, which is
calculated for each class of Class A notes:
o on a daily basis at the applicable rate set
out in the currency swap relating to that
class of Class A notes, which shall be
AUD-BBR-BBSW, as defined in the Definitions
of the International Swaps and Derivatives
Association, Inc., as of the first day of
the Interest Period ending on, but
excluding, that payment date with a
designated maturity of 90 days, or, in the
case of the first Interest Period, 60 days,
plus a margin;
o on the A$ Equivalent of the aggregate of the
outstanding principal balances of that class
of Class A notes as of the first day of the
Interest Period ending on, but excluding,
that payment date; and
o on the basis of the actual number of days in
that Interest Period and a year of 365 days.
A$ EQUIVALENT............... means, in relation to an amount denominated or
to be denominated in US$, the amount converted to
and denominated in A$ at the rate of exchange set
forth in the currency swap for the exchange of
United States dollars for Australian dollars.
ACCRUED INTEREST
ADJUSTMENT ............... means the amount equal to any interest and fees
accrued on the housing loans up to, but
excluding, the closing date and which were unpaid
as of the close of business on the closing date.
APPROVED BANK............... means:
o a bank, including St.George Bank, which has
a short-term rating of at least F1+ from
Fitch IBCA, P-1 from Moody's, and A-1+ from
Standard & Poor's; or
o a bank, including St.George Bank, which has
a short-term rating of at least F1+ from
Fitch IBCA, P-1 from Moody's and A-1 from
Standard & Poor's, provided that the total
value of deposits held by the bank in
relation
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to a trust does not exceed twenty percent of
the sum of the aggregate of the Stated
Amounts of the notes.
AUTHORIZED INVESTMENTS...... consist of the following:
o cash on hand or at an Approved Bank;
o bonds, debentures, stock or treasury bills
of any government of an Australian
jurisdiction;
o debentures or stock of any public statutory
body constituted under the law of any
Australian jurisdiction where the repayment
of the principal is secured and the interest
payable on the security is guaranteed by the
government of an Australian jurisdiction;
o notes or other securities of any government
of an Australian jurisdiction;
o deposits with, or certificates of deposit,
whether negotiable, convertible or otherwise,
of, an Approved Bank;
o 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 an Approved Bank;
o securities which are "mortgage-backed
securities" within the meaning of both the
Duties Act, 1997 of New South Wales and the
Trustee Act, 1958 of Victoria;
o any other assets of a class of assets that
are both:
o prescribed for the purposes of sub-paragraph
(d) of the definition of a "prescribed
property" in the Duties Act, 1997 of New South
Wales or are otherwise included within the
definition of "pool of mortgages" in that act,
and
o 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.
As used in this definition, expressions will be
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construed and, if necessary, read down so that
the notes in relation to the trust constitute
"mortgage-backed securities" for the purposes of
both the Duties Act, 1997 of New South Wales and
the Stamps Act, 1958 of Victoria.
Each of the investments in the first, third,
fourth, fifth, sixth, seventh and eighth bullet
points outlined above must have a long term
rating of AAA or a short term rating of A-1+, as
the case may be, from Standard & Poor's, a long
term rating of Aaa or a short term rating of
P-1, as the case may be, from Moody's and a long
term rating of AAA or a short term rating of
F1+, as the case may be, from Fitch IBCA. Each
of the investments must mature no later than the
next quarterly payment date following its
acquisition. Each investment must be denominated
in Australian dollars. Each investment must be
of a type which does not adversely affect the
risk weighting expected to be attributed to the
notes by the Bank of England and must be held
by, or in the name of, the issuer trustee or its
nominee.
AVAILABLE INCOME............ see page [ ].
BENEFIT PLAN................ means a pension, profit-sharing or other
employee benefit plan, as well as individual
retirement accounts and certain types of Keogh
Plans.
CARRYOVER CLASS A CHARGE
OFFS....................... means, on any quarterly determination date in
relation to a Class A note, the aggregate of
Class A Charge Offs in relation to that Class A
note prior to that quarterly determination date
which have not been reinstated as described in
this prospectus.
CARRYOVER CLASS B CHARGE
OFFS....................... means, on any quarterly 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 quarterly determination date
which have not been reinstated as described in
this prospectus.
CARRYOVER REDRAW CHARGE
OFFS....................... means, on any quarterly determination date in
relation to the redraw facility, the aggregate of
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Redraw Charge Offs prior to that quarterly
determination date which have not been
reinstated as described in this prospectus.
CLASS A CHARGE OFF.......... means a Principal Charge Off allocated against
the Class A notes.
CLASS B CHARGE OFF.......... means a Principal Charge Off allocated against
the Class B notes.
CONSUMER CREDIT
LEGISLATION................. means any legislation relating to consumer
credit, including the Credit Act of any
Australian jurisdiction, the Consumer Credit Code
(NSW) 1996 and any other equivalent legislation
of any Australian jurisdiction.
DEFAULT..................... means a failure by the issuer trustee to comply
with:
o an obligation which is expressly imposed on
it by the terms of a transaction document;
or
o a written direction given by the manager in
accordance with a transaction document and
in terms which are consistent with the
requirements of the transaction documents
in circumstances where the transaction
documents require or contemplate that the
issuer trustee will comply with that
direction;
in each case within any period of time specified
in, or contemplated by, the relevant transaction
document for such compliance. However, it will
not be a Default if the issuer trustee does not
comply with an obligation or direction where the
note trustee or the security trustee directs the
issuer trustee not to comply with that
obligation or direction.
EXCESS AVAILABLE INCOME..... see page [ ].
EXTRAORDINARY RESOLUTION.... means 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 a
written resolution signed by all of the Voting
Mortgagees.
FINANCE CHARGE COLLECTIONS... see page [ ].
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FINANCE CHARGE LOSS......... means, with respect to any housing loan,
Liquidation Losses which are attributable to
interest, fees and expenses in relation to the
housing loan.
GROSS PRINCIPAL
COLLECTIONS ............... see page [ ].
INSOLVENCY EVENT............ means with respect to the issuer trustee, in
its personal capacity and as trustee of the
trust, the manager, the servicer, St.George Bank
or the custodian, the happening of any of the
following events:
o except for the purpose of a solvent
reconstruction or amalgamation:
o 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:
o the winding up, dissolution or
administration of the relevant
corporation; or
o 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;
o and is not dismissed, ceased or
withdrawn within 15 business days;
o 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;
o 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
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<PAGE>
of which it is the trustee;
o 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
o anything analogous to an event referred to
in the four preceding paragraphs or having a
substantially similar effect occurs with
respect to the relevant corporation.
INTEREST PERIOD............. in relation to a quarterly payment date, means
the period from and including the preceding
quarterly payment date to but excluding the
applicable quarterly payment date. However, the
first and last interest periods are as follows:
o first: the period from and including the
closing date to but excluding the first
quarterly payment date;
o last: if the notes are fully retired upon
redemption in full, the period from and
including the quarterly payment date
preceding the date on which the notes
are redeemed in full to but excluding the
day on which the notes are redeemed in full.
If the notes are not fully retired upon
redemption in full and payment of principal
is improperly refused, the last interest
period will end on the date on which the note
trustee or principal paying agent receives
the moneys in respect of the notes and
notifies the holders of that receipt or the
date on which the outstanding principal
balance of the note, less charge offs, has
been reduced to zero; provided that interest
on that note shall thereafter begin to accrue
from and including any date on which the
outstanding principal balance of that note,
less charge offs, becomes greater than zero.
ISSUER TRUSTEE'S DEFAULT.... means:
o an Insolvency Event has occurred and is
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continuing in relation to the issuer trustee
in its personal capacity;
o any action is taken in relation to the
issuer trustee in its personal capacity
which causes the rating of any notes to be
downgraded or withdrawn;
o the issuer trustee, or any employee or
officer of the issuer trustee, breaches any
obligation or duty imposed on the issuer
trustee under any transaction document in
relation to the trust where the manager
reasonably believes it may have a Material
Adverse Effect and the issuer trustee fails
or neglects after 30 days' notice from the
manager to remedy that breach;
o the issuer trustee merges or consolidates
with another entity without ensuring that
the resulting merged or consolidated entity
assumes the issuer trustee's obligations
under the transaction documents; or
o there is a change in effective control of
the issuer trustee from that existing on the
date of the master trust deed to a
competitor unless approved by the manager.
A competitor is a bank or financial
institution that carries on certain
businesses that are the same as, or
substantially similar to or in competition
with, a business conducted by the seller.
LIBOR....................... means:
o the rate applicable to any Interest Period
for three-month or, in the case of the first
Interest Period, two-month, deposits in U.S.
dollars which appears on the Telerate Page
3750 as of 11:00 a.m., London time, on the
determination date; or
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o 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 calculation
agent had specified "USD-LIBOR-Reference
Banks" as the applicable Floating Rate Option
under the Definitions of the International
Swaps and Derivatives Association, Inc.
LIQUIDATION LOSSES.......... means, with respect to any housing loan for a
collection period, the amount, if any, by which
the Unpaid Balance of a liquidated housing loan,
together with the enforcement expenses relating
to the housing loan, exceeds all amounts
recovered from the enforcement of the housing
loan and the related mortgage, excluding proceeds
of a mortgage insurance policy.
LIQUIDITY SHORTFALL......... means, for any determination date, the excess
of the Payment Shortfall over the amount
available for a principal draw.
MANAGER'S DEFAULT........... means:
o the 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;
o an Insolvency Event has occurred and is
continuing in relation to the manager;
o the manager breaches any obligation or duty
imposed on the manager under the master trust
deed, any other transaction document or any
other deed, agreement or arrangement entered
into by the manager under the master trust
deed in relation to the trust, the issuer
trustee reasonably believes that such breach
has a Material Adverse Effect and the breach
is not remedied within 30 days' notice
being given by the issuer trustee to the
manager, except in the case of reliance by
the manager on the information provided by,
or action taken by, the servicer, or if the
manager has not received information from the
servicer
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which the manager requires to comply with
the obligation or duty; or
o a representation, warranty or statement by
or on behalf of the 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 a Material Adverse Effect.
MATERIAL ADVERSE EFFECT..... means an event which will materially and
adversely affect the amount or the timing of a
payment to a noteholder.
MORTGAGE SHORTFALL.......... see page [ ].
MORTGAGEES.................. see page [ ].
NOTEHOLDER MORTGAGEES....... means the Class B noteholders and the note
trustee, on behalf of the Class A noteholders.
ONE MONTH BANK BILL RATE.... on any date means the rate:
o calculated by taking the simple average of
the rates quoted on the Reuters Screen BBSW
Page at approximately 10:00 a.m., Sydney
time, on each of that date and the preceding
two business days for each BBSW 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 30 days;
o eliminating the highest and lowest mean
rates;
o taking the average of the remaining mean
rates; and
o if necessary, rounding the resultant figure
upwards to four decimal places.
If on any day fewer than five BBSW Reference
Banks have quoted rates on the Reuters Screen
BBSW Page, the rate for that day shall be
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calculated as above by taking the rates
otherwise quoted by five of the BBSW Reference
Banks on application by the parties for such a
bill of the same tenor. If in respect of any day
the rate for that day cannot be determined in
accordance with the foregoing procedures, then
the rate for that day shall mean such rate as is
agreed between the manager and the issuer
trustee with regard to comparable indices then
available, except that, on the first reset date,
as defined in the redraw facility, of any draw
under the redraw facility and the two business
days preceding that reset date the One Month
Bank Bill Rate shall be an interpolated rate
calculated with reference to the tenor of the
relevant period from that reset date to, but not
including, the next reset date.
PAYMENT SHORTFALL........... means, for any determination date, the excess
of Total Payments over Available Income.
PRINCIPAL CHARGE OFF........ means, with respect to a collection period, the
aggregate amount of Mortgage Shortfalls for that
collection period.
PRINCIPAL COLLECTIONS....... see page [ ].
PRINCIPAL LOSS.............. for a collection period means, with respect to
any housing loan, Liquidation Losses which are
attributable to principal in relation to the
housing loan.
REDRAW CHARGE OFF........... means a Principal Charge Off allocated against
the Redraw Principal Outstanding.
REDRAW PRINCIPAL
OUTSTANDING................ means, at any time, the total principal amount
of all outstanding Redraw Advances at that time,
less the Carryover Redraw Charge Offs at that
time.
REDRAW RETENTION AMOUNT..... means, for any quarterly collection period, the
amount determined by the manager on the preceding
quarterly determination date, as described in
"Description of the Class A Notes -- Redraws", on
page [ ].
REDRAW SHORTFALL............ means the amount by which Gross Principal
Collections and the available Redraw Retention
Amount are insufficient to fund redraws.
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SECURED MONEYS.............. means all money which the issuer trustee is or
at any time may become actually or contingently
liable to pay to or for the account of any
Mortgagee for any reason whatever under or in
connection with a transaction document.
SERVICER TRANSFER EVENT..... see page [ ].
STATED AMOUNT............... means for any note on a quarterly payment date:
o the initial outstanding principal balance
of the note; less;
o the aggregate of all principal payments
previously made on the note; less
o any carryover charge offs on the note; less
o principal to be paid on the note on the
next quarterly payment date; less
o Principal Charge Offs to be applied against
the note on the next quarterly payment date;
plus
o any Excess Available Income to be applied
to reinstating any carryover charge offs on
the note.
TERMINATION DATE............ with respect to the trust shall be the earlier
to occur of:
o the date which is 80 years after the date of
creation of the trust;
o the termination of the trust under statute
or general law;
o full and final enforcement by the security
trustee of its rights under the security
trust deed after the occurrence of an event
of default under the security trust deed; or
o at any time after all creditors of the trust
have been repaid in full, the business day
immediately following that date.
THREE MONTH BANK BILL RATE... on any date means the rate:
o calculated by taking the simple average of
the rates quoted on the Reuters Screen BBSW
Page at approximately 10:00 a.m., Sydney
time, on each of that date and the preceding
two business days for each BBSW Reference
Bank
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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 tenor
of 90 days or, where the relevant date is
the first day of the first Interest Period,
60 days;
o eliminating the highest and lowest mean
rates;
o taking the average of the remaining mean
rates; and
o if necessary, rounding the resultant figure
upwards to four decimal places.
If on any of the days fewer than five BBSW
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 BBSW Reference
Banks on application by the parties for such a
bill of the same tenor. If in respect of any day
the rate for that date cannot be determined in
accordance with the foregoing procedures, then
the rate for that day shall mean such rate as is
agreed between the manager and St.George Bank
having regard to comparable indices then
available.
TITLE PERFECTION EVENT...... means any of the following:
o the seller ceases to have a long term credit
rating of at least "BBB" from Fitch IBCA,
"Baa2" from Moody's, or "BBB" from Standard
& Poor's;
o an Insolvency Event occurs with respect to
the seller;
o St.George Bank fails to transfer collections
to the issuer trustee within the time
required under the servicing agreement;
o if the seller is also the servicer, a
Servicer Transfer Event occurs;
o if the seller is also the redraw facility
provider, a breach of its obligations,
undertakings or representations under the
redraw facility if such breach will have a
Material Adverse Effect; or
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o the seller breaches any representation,
warranty, covenant or undertaking in any
transaction document which is not remedied
within thirty days of the earlier of the
seller becoming aware of or receiving notice
of the breach.
TOTAL AVAILABLE FUNDS....... means the sum of Available Income, principal
draws and liquidity draws.
TOTAL PAYMENTS.............. means all amounts payable by the issuer trustee
on a payment date, as described on page [ ].
TRUST EXPENSES.............. see page [ ].
UNPAID BALANCE.............. means the unpaid principal amount of the
housing loan plus the unpaid amount of all
finance charges, interest payments and other
amounts accrued on or payable under or in
connection with the housing loan or the related
mortgage.
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 agreed to by the
calculation agent and the currency swap provider
-- at approximately 11:00 a.m., London time, on
the quarterly determination date to prime banks
in the London interbank market for a period of
three months or, in the case of the first
Interest Period, two months, commencing on the
first day of the Interest Period and in a
Representative Amount, as defined in the
Definitions of the International Swaps and
Derivatives Association, Inc. The calculation
agent 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 calculation agent and the currency swap
provider, at approximately 11:00 a.m., New York
City time, on that quarterly
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determination date for loans in U.S. dollars to
leading European banks for a period of three
months or, in the case of the first Interest
Period, two months, commencing on the first day
of the Interest Period and in a Representative
Amount. If no such rates are available in New
York City, then the rate for such Interest
Period shall be the most recently determined
rate in accordance with this paragraph.
VOTING MORTGAGEES........... see page [ ].
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APPENDIX I
TERMS AND CONDITIONS OF THE CLASS A NOTES
This Appendix I constitutes an integral part of this prospectus.
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 in definitive form. 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.
Paragraphs in italics are included by way of explanation only, and do not
constitute part of the terms and conditions of the Class A Notes.
The issue of US$[ ] Class A Mortgage Backed Pass Through Floating Rate
Notes (comprising US$[ ] Class A-1 Notes due [ ] (the "CLASS A-1 NOTES"),
US$[ ] Class A-2 Notes due [ ] 2030 (the "CLASS A-2 NOTES") and US$[ ]
Class A-3 Notes due [ ] (the "CLASS A-3 NOTES") (each a "CLASS" and together,
the "CLASS A NOTES") and A$[ ] Class B Mortgage Backed Pass Through Floating
Rate Notes due [ ] (the "CLASS B NOTES" and, together with the Class A Notes,
the "NOTES")) by AXA Trustees Limited, in its capacity as trustee of the
Crusade Global Trust No. 1 of 2000 (the "TRUST") (in such capacity, the
"ISSUER"), was authorised by a resolution of the Board of Directors of the
Issuer passed on [ ]. These Notes are (a) issued subject to a Master Trust
Deed (the "MASTER TRUST DEED") dated 14 March 1998 between the Issuer, Crusade
Management Limited (in such capacity, the "MANAGER" and, in the capacity of
residual beneficiary under the Trust, the "RESIDUAL BENEFICIARY") and St.George
Bank Limited ("ST.GEORGE"), a Supplementary Terms Notice (the "SUPPLEMENTARY
TERMS NOTICE") dated on or about [ ] between (among others) the Issuer, HSBC
Bank USA (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 together with the holders for the time being of the Class B
Notes (the "CLASS B NOTEHOLDERS"), the "NOTEHOLDERS") and the Manager, and these
terms and conditions (the "CONDITIONS"); (b) constituted by a note trust deed
dated the Closing Date (as defined in Condition 4(a) below) (the "NOTE TRUST
DEED") between the Issuer, the Manager and the Note Trustee; and (c) secured by
a Security Trust Deed (the "SECURITY TRUST DEED") dated on or about [ ] between
the Issuer, the Manager, the Note Trustee and National Mutual Life Nominees
Limited (ACN 004 387 133) (the security trustee for the time being referred to
as the "SECURITY TRUSTEE").
The statements set out below include summaries of, and are subject to the
detailed provisions of, the Master Trust Deed, the Supplementary Terms 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 the Closing Date between the
Issuer, the Manager, the Note Trustee and HSBC Bank USA as Principal
Paying Agent (the "PRINCIPAL PAYING AGENT", which expression includes its
successors as Principal
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Paying Agent under the Agency Agreement) and HSBC Bank USA, as calculation agent
(the "CALCULATION AGENT", which expression includes its successors as
Calculation Agent 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
Calculation Agent 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 Supplementary Terms Notice, the
Security Trust Deed, the Note Trust Deed, the Agency Agreement, the Servicing
Agreement dated 14 March 1998 and made between the Issuer, the Manager and
St.George as servicer (together with any substitute or successor, the
"SERVICER"), the Custodian Agreement (the "CUSTODIAN AGREEMENT") dated 19 March
1998 and made between the Issuer, the Manager and St.George Custodial Pty Ltd as
custodian (together with any substitute or successor, the "CUSTODIAN") and the
Indemnity (the "INDEMNITY") dated 19 March 1998 between St.George as indemnifier
(in such capacity, the "INDEMNIFIER"), the Manager, the Custodian and the Issuer
(together with the agreements with respect to the Basis Swap, the Fixed-Floating
Rate Swap and the Currency Swap (as each such term is defined below), those
documents the "RELEVANT DOCUMENTS" and certain other transaction documents
defined as such in the Supplementary Terms Notice, the "TRANSACTION DOCUMENTS").
Copies of the Transaction Documents are available for inspection at the office
of the Principal Paying Agent, being at the date hereof HSBC Bank USA, c/o HSBC
Bank plc, Issuer Services, Mariner House, Pepys Street, London EC3N 4DA.
In connection with the issue of the Class A Notes, the Issuer has entered
into an ISDA (defined below) master interest rate exchange agreement dated the
Closing Date with St.George (the "BASIS SWAP PROVIDER") and Deutsche Bank AG,
Sydney Branch, as standby basis swap provider (the "STANDBY BASIS SWAP
PROVIDER") together with a confirmation relating thereto dated the Closing Date
(the "BASIS SWAP"). The Issuer has also entered into an ISDA master interest
rate exchange agreement dated the Closing Date with St.George (the
"FIXED-FLOATING RATE SWAP PROVIDER") and Deutsche Bank AG, Sydney Branch, as
standby fixed-floating rate swap provider (the "STANDBY FIXED-FLOATING RATE
SWAP PROVIDER") together with a confirmation relating thereto dated the Closing
Date (the "FIXED-FLOATING RATE SWAP"). The Issuer has also entered into an ISDA
master currency exchange agreement dated the Closing Date with Bankers Trust
Corporation, New York (the "CURRENCY SWAP PROVIDER" and, together with the
Basis Swap Provider, the Standby Basis Swap Provider, the Fixed-Floating Rate
Swap Provider and the Standby Fixed-Floating Rate Swap Provider, the "SWAP
PROVIDERS") together with three confirmations relating thereto dated the
Closing Date in respect of three distinct swap transactions relating to each of
the Class A-1 Notes, the Class A-2 Notes and the Class A-3 Notes (each a
"CURRENCY SWAP" and together the "CURRENCY SWAPS").
Class A Book-entry Notes will also bear the following legend: "This
book-entry note is a global note for the purposes of section 128F(10) of the
Income Tax Assessment Act 1936 of the Commonwealth of Australia".
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<PAGE>
SUMMARY OF PRIORITIES
THIS SECTION CONTAINS A SUMMARY OF THE EFFECT OF THE MAIN PROVISIONS OF
CONDITIONS 4 AND 5 AND SHOULD NOT BE RELIED UPON AS A SUBSTITUTE FOR A DETAILED
READING OF CONDITIONS 4 AND 5. IN PARTICULAR, ANY CATEGORY OF PAYMENT OR
PAYMENTS LISTED BELOW AT A CERTAIN LEVEL OF PRIORITY MAY ALSO HAVE AN INTERNAL
ORDER OF PRIORITIES. CAPITALISED TERMS IN THIS SECTION HAVE THE SAME MEANING
GIVEN IN THE SUPPLEMENTARY TERMS NOTICE (UNLESS OTHERWISE DEFINED IN THESE
CONDITIONS).
Total Available Funds are distributed on a monthly basis to pay the
Accrued Interest Adjustment, to make certain repayments to the Mortgage
Insurer, to pay interest on the Redraw Facility and to pay certain amounts with
respect to drawings made under liquidity facilities (including Liquidity Draws
from the Liquidity Account) available to the Issuer. On a quarterly basis,
Total Available Funds is distributed first, to pay the Accrued Interest
Adjustment; second, to make certain payments to the Mortgage Insurer; third to
make payments of recovered break costs to the Swap Provider under the
Fixed-Floating Rate Swap; fourth, to cover certain fees and expenses of the
Trust; fifth, to pay fees due under the Redraw Facility, the Basis Swap and the
Fixed-Floating Rate Swap; sixth, to pay such fees and expenses, and certain
other amounts (including interest on the Class A Notes), that are overdue;
seventh, to pay interest under the Redraw Facility and the Class A Notes, to
pay certain amounts due under the Basis Swap and the Fixed-Floating Rate Swap
and to repay any outstanding Liquidity Draws; and eighth, to pay interest due
under the Class B Notes. After these quarterly distributions, the remaining
available income is used to cover any current principal shortfalls on the
Purchased Receivables, followed by principal amounts overdue with respect to
the Class A Notes and amounts overdue with respect to the Redraw Facility. Any
outstanding Principal Draws are then repaid and then any principal overdue on
the Class B Notes. Finally, any income remaining after all prior distributions
is distributed to the Beneficiary.
Available principal is distributed on a monthly basis, first, to make
certain payments to the Mortgage Insurer; second, to cover any shortfalls in
available income (by means of a Principal Draw); third, to provide for any
anticipated shortfalls in available income on the next Payment Date; and
fourth, to repay principal under the Redraw Facility. On a quarterly basis,
available principal is distributed first, to make certain payments to the
Mortgage Insurer; second, to make Principal Draws; third, to provide for any
anticipated shortfalls in available income on the next Payment Date; fourth, to
pay certain amounts in relation to Redraws; fifth, to provide for any
anticipated Redraws during the next Quarterly Collection Period; sixth, to pay
principal under the Class A Notes; and seventh, to pay principal under the
Class B Notes.
In all circumstances, the Noteholders take priority to the Beneficiary.
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.
Each Class of Notes will be represented by one or more typewritten fully
registered book-entry notes (each, a "BOOK-ENTRY NOTE" and collectively, the
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"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
Clearstream Banking, societe anonyme ("CLEARSTREAM, LUXEMBOURG"), may hold
interests in the Book-Entry Notes on behalf of persons who have accounts with
Euroclear and Clearstream, Luxembourg through accounts maintained in the names
of Euroclear or Clearstream, Luxembourg, or in the names of their respective
depositories, with DTC.
If the Issuer 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 and HSBC Bank USA acting
as note registrar (the "NOTE REGISTRAR") may require to complete, execute and
deliver such Definitive Notes. In such circumstances, the Issuer 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 AND THE CLASS B
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 will rank pari
passu and rateably without any preference or priority among themselves.
The Class A Notes are issued subject to the Master Trust Deed and the
Supplementary Terms 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
both before and after enforcement of the security and in respect of principal
and interest (as set out in Conditions 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 to purchase an equitable interest in certain housing
loans (the "LOANS") and certain related mortgages (the "MORTGAGES") from
St.George as an approved seller (the "Approved 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 in respect of any
such unpaid amounts.
The net proceeds of realisation of the assets of the Trust (including
following enforcement of the Security Trust Deed) may be insufficient to pay
all amounts due
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to the Noteholders. Save in certain limited circumstances the other assets of
the Issuer will not be available for payment of any shortfall arising and all
claims in respect of such shortfall shall be extinguished (see further
Condition 15). None of the Servicer, the Manager, St.George, the Note Trustee,
the Security Trustee, the Swap Providers or the Note Managers (as defined in
the Supplementary Terms Notice) has any obligation to any Noteholder for
payment of any amount by the Issuer in respect of the Notes.
The Note Trust Deed contains provisions requiring the Note Trustee to have
regard to the interests of Class A Noteholders as regards all the powers,
trusts, authorities, duties and discretions of the Note Trustee (except where
expressly provided otherwise).
The Security Trust Deed contains provisions requiring the Security
Trustee, subject to the other provisions of the Security Trust Deed, to give
priority to the interests of the Class A Noteholders, if there is a conflict
between the interest of such Noteholders and any other Voting Mortgagee (as
defined below).
3. COVENANTS OF THE ISSUER
So long as any of the Class A Notes remains outstanding, the Issuer has
made certain covenants for the benefit of the Class A Noteholders which are set
out in the Master Trust Deed.
These covenants include the following.
(a) The Issuer shall act continuously as trustee of the Trust until the
Trust is terminated as provided by the Master Trust Deed or the Issuer
has retired or been removed from office in the manner provided under
the Master Trust Deed.
(b) The Issuer shall:
(i) act honestly and in good faith and comply with all relevant
material laws 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, the Class B Noteholders,
the Beneficiary and other Creditors of the Trust in accordance
with its obligations under the relevant Transaction Documents;
(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 Manager keeps, accounting records which
correctly record and explain all amounts paid and received by the
Issuer;
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(v) keep the Trust separate from each other trust which is
constituted under the Master Trust Deed and from its own assets
and account for assets and liabilities of the Trust separately
from those of other trusts constituted under the Master Trust
Deed and from its own assets and liabilities;
(vi) do everything and take all such actions which are necessary
(including obtaining all appropriate Authorisations which relate
to it as trustee of the Trust and taking all actions necessary to
assist the Manager to obtain all other 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
under the Master Trust Deed;
(vii) not, as Issuer, engage in any business or activity in respect of
the Trust except as contemplated or required by the Transaction
Documents;
(viii) except as contemplated or required by the Transaction
Documents, maintain an independent and arm's length relationship
with its related bodies corporate in relation to dealings
affecting the Trust;
(ix) except as contemplated or required by the Transaction Documents,
not, in respect of the Trust, guarantee or become obligated for
the debts of any other entity or hold out its credit as being
available to settle the obligations of others;
(x) comply with the rules and regulations of the London Stock
Exchange Limited (the "LONDON STOCK EXCHANGE"); and
(xi) within 45 days of notice from the Manager to do so, remove any of
its agents or delegates that breaches any obligation imposed on
the Issuer under the Master Trust Deed or any other Transaction
Document where the Manager believes it will have a Material
Adverse Effect.
(c) Except as provided in any Transaction Document (and other than the
charge given to the Security Trustee), the Issuer shall not, nor shall
it permit any of its officers to, sell, mortgage, charge or otherwise
encumber or part with possession of any assets of the Trust (the
"TRUST ASSETS").
(d) The Issuer shall duly observe and perform the covenants and
obligations of the Master Trust Deed and will be personally liable to
the Servicer, the Noteholders, the Beneficiary, the Note Managers or
any other Creditors only if it is guilty of negligence, fraud or
Default (as defined in Condition 15). The Issuer is not responsible
for the acts or omissions of its agents or delegates (including
persons referred to in clause 17.6 of the Master Trust Deed) selected
by the Issuer in good faith using reasonable care except where the
Issuer expressly instructs the agent or delegate to do or omit to do
the relevant act, if the Issuer is aware of the default and does not
take the action available to it under the Transaction Documents to
address the act or omission or where the Transaction Documents
expressly provide that the Issuer is so liable.
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(e) The Issuer will open and operate certain bank accounts in accordance
with the Master Trust Deed and the Supplementary Terms Notice.
(f) Subject to the Master Trust Deed and any Transaction Document to which
it is a party, the Issuer shall act on all directions given to it by
the Manager in accordance with the terms of the Master Trust Deed.
(g) The Issuer 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 and the Note 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 arrears on the 20th of [ ] in respect of the period from
(and including) the Closing Date and ending on (but excluding)[ ] (the
"FIRST QUARTERLY PAYMENT DATE") and thereafter on each 20 March, June,
September and December (each such date a "QUARTERLY PAYMENT DATE"). 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, unless it would thereby fall into the next calendar month, in which
case the due date shall be brought forward to the immediately preceding
Business Day. The final Quarterly Payment Date for a Class of Notes will be
the earlier of the Final Maturity Date for that Class of Notes and the
Payment Date on which the Notes are redeemed in full.
"BUSINESS DAY" in this Condition 4 and in Conditions 5 and 9 below means
any day other than a Saturday, Sunday or public holiday on which banks are
open for business in London, New York City and Sydney.
The period beginning on (and including) the Closing Date and ending on (but
excluding) the first Quarterly Payment Date, and each successive period
beginning on (and including) a Quarterly Payment Date and ending on (but
excluding) the next Quarterly 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
in that Interest Period and a 360 day year.
Interest shall cease to accrue on any Class A Note for the period from (and
including):
(i) the date on which the Stated Amount (as defined in Condition 5(a)) of
that Class A Note is reduced to zero (provided that interest shall
thereafter begin to accrue from (and including) any date on which the
Stated Amount of the Class A Note becomes greater than zero); or
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(ii) if the Stated Amount of the Class A Note on the due date for
redemption is not zero, the due date for redemption of the Class A
Note, unless, after the due date for redemption 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 later
of:
(A) the date on which 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 Condition
12; and
(B) the Stated Amount of that Class A Note has been reduced to zero,
providing that interest shall thereafter begin to accrue from
(and including) any date on which the Stated Amount of that Class
A Note becomes greater than zero.
(B) INTEREST RATE
The rate of interest applicable from time to time to a Class (the "Interest
Rate") will be determined by the Calculation Agent on the basis of the
following paragraphs.
On the second Business Day before the beginning of each Interest Period
(each an "INTEREST DETERMINATION DATE"), the Calculation Agent 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 (or, in the case of the
first Interest Period two-month) deposits in US dollars which appears on
the Telerate Page 3750 as of 11.00 am, 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 and
Calculation Agent 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 agreed to by the Calculation Agent and the Currency Swap
Provider) 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 (or, in the case of the first Interest Period, two
months) commencing on the first day of the Interest Period and in a
Representative Amount (as defined in the ISDA Definitions). The Calculation
Agent 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 two major banks in New York City, selected by the Calculation
Agent and the Currency Swap Provider, at approximately 11.00 am, New York
City time, on that Interest Determination
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Date for loans in US dollars to leading European banks for a period of
three months (or in the case of the first Interest Period two months)
commencing on the first day of the Interest Period and in a Representative
Amount. If no such rates are available in New York City, then the rate for
such Interest Period shall be the most recently determined rate in
accordance with this paragraph.
Where used in this Condition 4(b), BUSINESS DAY means any day on which
commercial banks are open for business (including dealings in foreign
exchange and foreign currency deposits) in London and New York City.
The Interest Rate applicable to the Class A Notes for such Interest Period
shall be the aggregate of (i) the interest rate or arithmetic mean as
determined by the Calculation Agent; and (ii) the margin of [ %] (the
"CLASS A-1 MARGIN") in relation to the Class A-1 Notes, [ %] (the "CLASS
A-2 MARGIN") in relation to the Class A-2 Notes and [ %] (the "CLASS A-3
MARGIN") in relation to the Class A-3 Notes.
If the Issuer has not redeemed all of:
(i) the Class A-1 Notes on or before the Quarterly Payment Date falling in
[ ], the Class A-1 Margin will increase to [ %] for the period from
(and including) that date until (but excluding) the date on which the
Class A-1 Notes are redeemed in full in accordance with these
conditions;
(ii) the Class A-2 Notes on or before the Quarterly Payment Dated falling
in [ ], the Class A-2 Margin will increase to [ %] for the period from
(and including) that date until (but excluding) the date on which the
Class A-2 Notes are redeemed in full in accordance with these
conditions; or
(iii) the Class A-3 Notes on or before the Quarterly Payment Date falling
in [ ], the Class A-3 Margin will increase to [ %] for the period from
(and including) that date until (but excluding) the date on which the
Class A-3 Notes are redeemed in full in accordance with these
conditions.
There is no maximum or minimum Interest Rate.
(C) DETERMINATION OF INTEREST RATE AND CALCULATION OF INTEREST
The Calculation Agent 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 relevant Class of Class
A Notes to the Invested Amount (as defined in Condition 5(a)) of that Class
A Note on the first day of the relevant 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 Calculation Agent shall (in the absence of manifest
error) be final and binding upon all parties.
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(D) NOTIFICATION AND PUBLICATION OF INTEREST RATE AND INTEREST
The Calculation Agent will cause the Interest Rate and the Interest
applicable to each Class A Note for each Interest Period and the relevant
Quarterly Payment Date to be notified to the Issuer, the Manager, the Note
Trustee and the Paying Agents and, for so long as the Class A Notes are
listed on the Official List of the London Stock Exchange, the London Stock
Exchange will cause the same to be published in accordance with Condition
12 on or as soon as possible after the date of commencement of the relevant
Interest Period. The Interest, Interest Rate and the relevant Quarterly
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 MANAGER
If the Calculation Agent at any time for any reason does not determine the
relevant Interest Rate or calculate the Interest for a Class A Note, the
Manager shall do so and each such determination or calculation shall be
deemed to have been made by the Calculation Agent. In doing so, the Manager
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 reasonably
considers to be fair and reasonable in all the circumstances.
(F) CALCULATION AGENT
The Issuer will procure that, so long as any of the Class A Notes remains
outstanding, there will, at all times, be a Calculation Agent. The Issuer,
or the Manager with the consent of the Issuer (such consent not to be
unreasonably withheld), reserves the right at any time to terminate the
appointment of the Calculation Agent. 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 Calculation Agent, or if the appointment of the
Calculation Agent is terminated, the Issuer will, with the approval of the
Note Trustee, appoint a successor Calculation Agent to act as such in its
place, provided that neither the resignation nor removal of the Calculation
Agent shall take effect until a successor approved by the Note Trustee has
been appointed.
(G) INCOME DISTRIBUTION
On each Quarterly Payment Date, and based on the calculations, instructions
and directions provided to it by the Manager, the Issuer must pay or cause
to be paid out of Total Available Funds, in relation to the Quarterly
Collection Period (defined below) ending immediately before that Quarterly
Payment Date, the following amounts in the following order of priority:
(i) first, an amount equal to any Accrued Interest Adjustment
required to be paid to the Approved Seller provided that the
total amount of Accrued Interest Adjustments with respect to any
Quarterly Collection Period (other than the Quarterly Collection
Period ending on [ ] shall not
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<PAGE>
exceed an amount equal to [ %] multiplied by the aggregate
Housing Loan Principal of the Purchased Receivables on the first
day of that Quarterly Collection Period multiplied by the actual
number of days in that Quarterly Collection Period divided by
365;
(ii) second, repayment to the Mortgage Insurer, of any payment in
the nature of income received from a Borrower under a Loan for
which that Mortgage Insurer previously paid under the relevant
Mortgage Insurance Policy by way of Timely Payment Cover;
(iii) third, payment to the Fixed-Floating Swap Provider under the
Fixed-Floating Rate Swap of any Break Payments received by or on
behalf of the Issuer from a Borrower or Mortgage Insurer during
the Quarterly Collection Period;
(iv) fourth (unless specified later in this paragraph (g)), Trust
Expenses which have been incurred prior to that Quarterly
Payment Date and which have not previously been paid or
reimbursed under an application of this paragraph (g) (in the
order of priority set out in the definition of "TRUST EXPENSES"
as more fully described in the Supplementary Terms Notice);
(v) fifth, pari passu and ratably as between themselves:
(A) any fees payable by the Issuer under the Redraw Facility
dated the Closing Date between the Issuer, the Manager and
St.George (the "REDRAW FACILITY"); and
(B) any fees payable by the Issuer under the Basis Swap and the
Fixed-Floating Rate Swap;
(vi) sixth, without duplication, any amount that would have been
payable under this paragraph (other than under sub-paragraph
(ix)) on any previous Quarterly Payment Date, if there had been
sufficient Total Available Funds, which have not been paid by
the Issuer and in the order they would have been paid under that
prior application of this clause;
(vii) seventh, payment to the Mortgage Insurer of an amount equal to
the greater of the following:
(A) zero; and
(B) the difference between any overpayment by the Mortgage
Insurer of amounts in respect of income (for which the
Mortgage Insurer has not previously been reimbursed) and the
aggregate of the Excess Distributions paid to the
Beneficiary on previous Quarterly Payment Dates under clause
5(e);
(viii) eighth, pari passu and ratably as between themselves:
(A) any interest payable by the Issuer under the Redraw
Facility;
(B) any amounts payable by the Issuer under the Basis Swap and
the Fixed-Floating Rate Swap not included in (iii) or (v)
above;
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<PAGE>
(C) any repayment of a Liquidity Draw made on or prior to the
previous Monthly Payment Date; and
(D) the payment to the Currency Swap Provider under a
Confirmation relating to the Class A Notes of the A$ Class A
Interest Amount at that date (which is thereafter to be
applied to payments of Interest on the Class A Notes);
(ix) ninth, any amounts that would have been payable under
sub-paragraph (g)(ix) on any previous Quarterly Payment Date, if
there had been sufficient Total Available Funds, which have not
been paid by the Issuer;
(x) tenth, payment to the Class B Noteholders of the Class B
Interest Amount as at that date on the Class B Notes; and
(xi) eleventh, payment to the Mortgage Insurer of an amount equal to
any overpayment by the Mortgage Insurer of amounts in respect of
income (for which the Mortgage Insurer has not previously been
reimbursed).
The Issuer shall only make a payment under any of the above sub-paragraphs
if it is directed in writing by the Manager to do so and only to the extent
that any Total Available Funds remain from which to make the payment after
amounts with priority to that payment have been distributed.
The Issuer is also required to make certain payments out of Total Available
Funds on each Monthly Payment Date (as defined below) as more fully
described in the Supplementary Terms Notice.
Capitalised terms in this paragraph (g) have the same meaning given in the
Supplementary Terms Notice unless otherwise defined in this document.
5. REDEMPTION AND PURCHASE
Capitalised terms in this Condition 5 have the same meaning given in the
Supplementary Terms Notice unless otherwise defined in this document.
(A) MANDATORY REDEMPTION IN PART FROM PRINCIPAL COLLECTIONS AND
APPORTIONMENT OF PRINCIPAL COLLECTIONS BETWEEN THE CLASS A NOTES AND
THE CLASS B NOTES
The Class A Notes shall be subject to mandatory redemption in part on any
Quarterly 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 Quarterly Payment Date shall be the amount available for
payment as set out in Condition 5(b) on the day which is two Business Days
prior to the Quarterly Payment Date (the "QUARTERLY DETERMINATION DATE")
divided by the aggregate Invested Amount of all Class A Notes, multiplied
by the Invested Amount of that Note, 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 and not to be reinstated on
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<PAGE>
the next Quarterly Payment Date, or to be charged off on the Quarterly
Payment Date, as described in Condition 5(c) (that reduced amount being the
"STATED AMOUNT" of that Class A Note).
Notice of amounts to be redeemed will be provided by the Manager to the
Issuer, the Calculation Agent, the Principal Paying Agent and the Note
Trustee.
Following notification of the amount to be redeemed for each Quarterly
Payment Date, the Manager will determine the Bond Factor for each Class of
the Class A Notes as of such Quarterly Payment Date and will notify the
Issuer, the Calculation Agent, the Principal Paying Agent and the Note
Trustee of this amount and shall cause the Bond Factor to be published
pursuant to Condition 12.
The "BOND FACTOR" for any Class of the Class A Notes as of any Quarterly
Payment Date will be equal to the ratio, expressed as a percentage (rounded
to six decimal places), equal to the aggregate Invested Amounts of the
Class A Notes of that Class as of the preceding Quarterly Determination
Date less all Class A Principal Payments to be made on the next Quarterly
Payment Date, divided by the aggregate Initial Invested Amount of the Class
A Notes of that Class.
The "CLASS A INVESTED AMOUNT" of a Class A Note on any Quarterly
Determination Date is equal to its Initial Invested Amount minus the
aggregate of the Principal Payments made in respect of that Class A Note on
or before that Quarterly Determination Date.
"CUT-OFF DATE" means, in respect of all Loans and Mortgages, [ .]
"INITIAL INVESTED AMOUNT" means, in relation to a Class A Note, its initial
Invested Amount.
"MONTHLY COLLECTION PERIOD" means, in relation to a Monthly Payment Date,
the
calendar month which precedes the month in which the Monthly Payment Date
occurs. The first Monthly Collection Period is the period from (but
including) the Cut-Off Date to (and including) [ .] The last Monthly
Collection Period is the period from (but excluding) the last day of the
calendar month that precedes the date on which the Trust is terminated
under clause 3.5 of the Master Trust Deed to (and including) that date.
"MONTHLY PAYMENT DATE" means, in relation to a Monthly Collection Period,
the
20th day of the calendar month that follows that Monthly Collection Period,
provided that, if any such 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 that day falls in the next calendar month, in which case the
Monthly Payment Date will be the preceding Business Day.
"PRINCIPAL COLLECTIONS" means, in respect of a Monthly Collection Period or
Quarterly Collection Period (each, a "COLLECTION PERIOD") and as applicable
on any Determination Date, the aggregate of:
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<PAGE>
(i) all amounts received by or on behalf of the Issuer from or on
behalf of the borrowers under each Loan purchased by the Issuer
and in which the Issuer has an interest (a "PURCHASED
RECEIVABLE") during that Collection Period in respect of
principal, in accordance with the terms of the Purchased
Receivables, including principal prepayments;
(ii) all other amounts received by or on behalf of the Issuer under
or in respect of principal under the Purchased Receivables and
the related Receivable Rights during that Collection Period
including:
(A) any Liquidation Proceeds on account of principal;
(B) any payments by the Approved Seller to the Issuer on
the repurchase of a Purchased Receivable as more fully
described in the Master Trust Deed during that
Collection Period which are attributable to principal;
and
(C) any amount received by the Issuer from the Approved
Seller as more fully described in clause 5.21 of the
Supplementary Terms Notice with respect to that
Collection Period attributable to principal;
(iii) all amounts received by or on behalf of the Issuer during that
Collection Period from any provider of a Support Facility (other
than the Currency Swap but including the Mortgage Insurance
Policy) as more fully described in that Support Facility and
which the Manager determines should be accounted for in respect
of a Liquidation Loss for that Collection Period;
(iv) all amounts received by or on behalf of the Issuer during that
Collection Period:
(A) from the Approved Seller, in respect of any breach of a
representation, warranty or undertaking of the Approved
Seller contained in the Master Trust Deed or this
Supplementary Terms Notice;
(B) from the Approved Seller under any obligation of the
Approved Seller as more fully described in the Master
Trust Deed or this Supplementary Terms Notice to
indemnify or reimburse the Issuer for any amount;
(C) from the Servicer, in respect of any breach of any
representation, warranty or undertaking of the Servicer
contained in the Servicing Agreement;
(D) from the Servicer under any obligation of the Servicer
as more fully described in the Servicing Agreement to
indemnify or reimburse the Issuer for any amount;
(E) from the Custodian in respect of any breach of a
representation, warranty or undertaking of the
Custodian contained in the Custodian Agreement;
(F) from the Custodian under any obligation of the
Custodian as more fully described in the Custodian
Agreement to indemnify or reimburse the Issuer for any
amount;
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<PAGE>
(G) from the Indemnifier as more fully described in the
Indemnity in respect of any losses arising from a
breach by the Custodian of its obligations contained in
the Custodian Agreement;
(H) from the Issuer in its personal capacity in respect of
any breach of a representation, warranty or undertaking
of the Issuer in respect of which it is not entitled to
be indemnified out of the Assets of the Trust;
(I) from the Issuer in its personal capacity under any
obligation of the Issuer as more fully described in the
Transaction Documents to indemnify or reimburse the
Trust for any amount;
(J) from the Manager in respect of any breach of a
representation, warranty or undertaking of the Manager
contained in the Transaction Documents of which it is
not entitled to be indemnified out of the Assets of the
Trust; and
(K) from the Manager under any obligation of the Manager as
more fully described in the Transaction Documents to
indemnify or reimburse the Trust for any amount,
in each case, which are determined by the Manager to be in respect of
principal payable under the Purchased Receivables and the related
Receivable Rights;
(v) any amounts in the nature of principal received by or on
behalf of the Issuer during that Collection Period pursuant
to the sale of any Asset (including the A$ Equivalent of any
amount received by the Issuer on the issue of the Notes
which was not used to purchase a Purchased Receivable or
Purchased Receivable Security, and which the Manager
determines is surplus to the requirements of the Trust);
(vi) any amount of Excess Available Income to be applied to pay a
Principal Charge Off or a Carryover Charge Off;
(vii) any Excess Available Income to be applied as more fully
described in clause 5.2 of the Supplementary Terms Notice to
Principal Draws made on a previous Payment Date; and
(viii) any funds withdrawn, by the Issuer from the Liquidity
Account in accordance with clause 5.7(c)(iv) of the
Supplementary Terms Notice,
less any amounts deducted by or paid to the Approved Seller to reimburse
Redraws funded by the Approved Seller for which the Approved Seller has not
previously been reimbursed and any amounts paid by the Issuer to replace a
Receivable of the Trust as further described in section 8 of the
Supplementary Terms Notice.
"QUARTERLY COLLECTION PERIOD" means, in relation to a Quarterly Payment
Date, the 3 Monthly Collection Periods that precede the calendar month in
which the Quarterly Payment Date occurs, save that the first Quarterly
Collection Period is the period from (and including) the Cut-Off Date to
(and including) [ ]. The last Quarterly Collection Period ends on (and
includes) the date on which the Trust is terminated.
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<PAGE>
(B) PRINCIPAL DISTRIBUTIONS ON NOTES
On each Quarterly Payment Date, and in accordance with the calculations,
instructions and directions provided to it by the Manager, the Issuer must
distribute or cause to be distributed out of Principal Collections, in
relation to the Quarterly Collection Period ending immediately before that
Quarterly Payment Date, the following amounts in the following order of
priority:
(i) first, repayment to the Mortgage Insurer, of any payment in the
nature of principal received from an Obligor for which the
Mortgage Insurer previously paid under the Mortgage Insurance
Policy by way of timely payment cover;
(ii) second, to allocate to Total Available Funds any Principal
Draws calculated as more fully described in clause 5.6 of the
Supplementary Terms Notice;
(iii) third, to retain in the Collection Account as a provision such
amount as the Manager determines is appropriate to make for any
anticipated shortfalls in payments as more fully described in
clause 5.1 of the Supplementary Terms Notice on the following
Monthly Payment Date or Quarterly Payment Date;
(iv) fourth, to repay any Redraws provided by the Approved Seller in
relation to Loans as more fully described in clause 5.5 of the
Supplementary Terms Notice to the extent that it has not
previously been reimbursed in relation to those Redraws;
(v) fifth, to repay all Redraw Principal Outstanding under the
Redraw Facility Agreement on that Quarterly Payment Date;
(vi) sixth, to retain in the Collection Account as a provision to
reimburse further Redraws an amount equal to the Redraw
Retention Amount for the next Quarterly Collection Period;
(vii) seventh, as a payment to the Currency Swap Provider under the
Confirmation relating to the Class A-1 Notes, of an amount equal
to the lesser of:
(A) the amount available for distribution under this
sub-paragraph (vii) after all payments which have
priority under this paragraph (b); and
(B) the A$ Equivalent of the Class A Invested Amounts for
all Class A-1 Notes (which is thereafter to be applied
to payments of principal on the Class A-1 Notes);
(viii) eighth, as a payment to the Currency Swap Provider under the
Confirmation relating to the Class A-2 Notes, of an amount equal
to the lesser of:
(A) the amount available for distribution under this
sub-paragraph (viii) after all payments which have
priority under this paragraph (b); and
(B) the A$ Equivalent of the Class A Invested Amounts for
all Class A-2 Notes (which is thereafter to be applied
to payments of principal on the Class A-2 Notes);
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<PAGE>
(ix) ninth, as a payment to the Currency Swap Provider under the
Confirmation relating to the Class A-3 Notes, of an amount equal
to the lesser of:
(A) the amount available for distribution under this
sub-paragraph (ix) after all payments which have
priority under this paragraph (b); and
(B) the A$ Equivalent of the Class A Invested Amounts for
all Class A-3 Notes (which is thereafter to be applied
to payments of principal on the Class A-3 Notes); and
(x) tenth, only if the Class A Invested Amount for all Class A
Notes has been reduced to zero, as a payment to the Class B
Noteholders, of an amount equal to the lesser of:
(A) the amount available for distribution under this
sub-paragraph (x) after all payments which have
priority under this paragraph (b); and
(B) the Class B Invested Amounts in respect of all Class B
Notes; (which is thereafter to be applied to payments
of principal on the Class B Notes).
The Issuer shall only make a payment under any of sub-paragraphs (i) to (x)
above inclusive if it is directed in writing to do so by the Manager and
only to the extent that any Principal Collections remain from which to make
the payment after amounts with priority to that payment have been
distributed.
The Issuer is also required to make certain payments out of Principal
Collections (including allocating Principal Draws to Total Available Funds)
on each Monthly Payment Date in accordance with the Supplementary Terms
Notice.
(C) GENERAL
No amount of principal will be paid to a Noteholder in excess of the
Invested Amount applicable to the Notes held by that Noteholder.
(D) EXCESS AVAILABLE INCOME -- REIMBURSEMENT OF CHARGE OFFS AND
PRINCIPAL DRAW
(i) General
On each Quarterly Determination Date, the Manager must determine, for a
Quarterly Collection Period, the amount (if any) by which the Total
Available Funds for the Quarterly Collection Period exceeds the Total
Payments for the Quarterly Collection Period ("Excess Available
Income").
(ii) Distribution of Excess Available Income
(A) On each Quarterly Determination Date, the Manager must apply
any Excess Available Income for the Quarterly Collection
Period relating to that Quarterly Determination Date in the
following order of priority:
(1) first, the Excess Available Income must be applied in
payment of all Principal Charge Offs for that Quarterly
Collection Period;
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(2) second, the balance of the Excess Available Income (after
application under sub-paragraph (1) above) must be applied pari
passu and rateably between themselves (based on the Principal
Outstanding and the A$ Equivalent of the Stated Amount of the
Class A Notes):
(a) as a payment to the Currency Swap Provider under a
Confirmation relating to the Class A Notes, of the A$
Equivalent of any Carryover Class A Charge Offs; and
(b) as a repayment under the Redraw Facility, as a reduction of,
and to the extent of, the Carryover Redraw Charge Offs;
(3) third, the balance of the Excess Available Income (after
application under sub-paragraphs (1) and (2)) must be applied
to all Principal Draws which have not been repaid as at that
Quarterly Payment Date; and
(4) fourth, the balance of the Excess Available Income (after
application under sub-paragraphs (1) to (3) (inclusive)) must
be applied in or towards reinstating the Stated Amount of the
Class B Notes to the extent of any Carryover Class B Charge
Offs.
Any amount applied pursuant to sub-paragraphs (1) to (4) (inclusive)
above will be treated as Principal Collections to the extent of that
application and in the case of amounts paid under sub-paragraph (2) or
(4) will be paid on the Quarterly Payment Date following that Quarterly
Determination Date. The Issuer shall only make a payment under
paragraph (A) above if it is directed to do so by the Manager and only
to the extent that any Excess Available Income remains from which to
make the payment after amounts with priority to that payment have been
distributed.
(E) EXCESS DISTRIBUTION
The Issuer must at the written direction of the Manager pay any Excess
Distribution for a Quarterly Collection Period to the Beneficiary on the
relevant Quarterly Payment Date. The Issuer may not recover any Excess
Distributions from the Beneficiary once they are paid to the Beneficiary
except where there has been a manifest error in the relevant calculation of
the Excess Distributions.
(F) US$ ACCOUNT
The Issuer shall direct the Currency Swap Provider to pay all amounts
denominated in US$ payable to the Issuer by the Currency Swap Provider
under the Currency Swap into the US$ Account or to the Principal Paying
Agent under the Agency Agreement on behalf of the Issuer.
The Issuer shall, on the direction of the Manager, or shall require that
the Paying Agent on its behalf, pay all amounts credited to the US$ Account
by the Currency Swap Provider as follows, and in accordance with the Note
Trust Deed and the Agency Agreement:
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(i) amounts credited under Conditions 4(h)(vi) and 4(h)(vii)(D),
pari passu in relation to Class A Notes as payments of Interest
on those Class A Notes;
(ii) amounts credited under Condition 5(d)(ii)(A)(2)(a), pari passu
in relation to 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;
(iii) amounts credited under Condition 5(b)(vii), pari passu to Class
A-1 Noteholders as Class A Principal Payments on the Class A-1
Notes until the Class A Invested Amounts of the Class A-1 Notes
have been reduced to zero;
(iv) amounts credited under Condition 5(b)(viii), pari passu to
Class A-2 Noteholders as Class A Principal payments on the Class
A-2 Notes until the Class A Invested Amounts of the Class A-2
Notes have been reduced to zero; and
(v) amounts credited under Condition 5(b)(ix), pari passu to Class
A-3 Noteholders as Class A Principal payments on the Class A-3
Notes until the Class A Invested Amounts of the Class A-3 Notes
have been reduced to zero.
(G) CHARGE OFFS
If the Principal Charge Offs for any Quarterly Collection Period exceed the
Excess Available Income calculated on the Quarterly Determination Date for
that Quarterly Collection Period, the Manager must, on and with effect from
the Quarterly Payment Date immediately following the end of the Quarterly
Collection Period:
(i) reduce pari passu and rateably as between themselves the Class
B Stated Amount of each of the Class B Notes by 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 the Class A Notes and the Redraw
Facility with respect to the balance of that excess
(A) rateably as between each of the Class A Notes, the Class A
Stated Amount on each of the Class A Notes until the Class A
Stated Amount of that Class A Note is zero; and
(B) the Redraw Principal Outstanding under the Redraw Facility,
applied to Redraw Advances (as defined in the Redraw
Facility) in reverse chronological order of their Drawdown
dates, until the Redraw Principal Outstanding (as defined in
the Redraw Facility Agreement) is zero.
(H) CALCULATION OF PRINCIPAL PAYMENTS AND STATED AMOUNT
On (or as soon as practicable after) each Quarterly Determination Date,
the Manager shall calculate the amount of principal to be repaid in
respect of each
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Class A Note, as the case may be, due on the Payment Date next following
that Quarterly Determination Date; (B) the Stated Amount and Invested
Amount of each Note on the first day of the next following Interest Period
(after deducting any principal due to be made on the next Quarterly
Payment Date); and (C) the Bond Factor for each Class on each Quarterly
Determination Date in respect of the Collection Period ending before that
Quarterly Determination Date.
The Manager will notify the Issuer, the Note Trustee, the Principal Paying
Agent and the Calculation Agent and (for so long as the Notes are listed
on the London Stock Exchange) the London Stock Exchange by not later than
(or as soon as practicable after) the Quarterly Determination Date
immediately preceding the relevant Quarterly Payment Date of each such
determination and will immediately cause details of each of those
determinations to be published in accordance with Condition 12 by one
Business Day before the relevant Payment Date. 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
Condition 12.
If the Manager does not at any time for any reason determine a Principal
Payment, the Invested Amount or the Stated Amount applicable to Class A
Notes in accordance with this paragraph, the Principal Payment, Invested
Amount and the Stated Amount shall be determined by the Calculation Agent
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 Manager.
(I) CALL
The Issuer must, when so directed by the Manager (at the Manager's option),
purchase or redeem all, but not some only, of the Class A Notes by repaying
the Invested Amount, or, if the Class A Noteholders by Extraordinary
Resolution so agree, the Stated Amount, of the Class A Notes, together with
accrued interest to (but excluding) the date of repurchase or redemption,
on any Quarterly Payment Date falling on or after the earlier of:
(i) the Quarterly Payment Date on which the Total Stated Amount of
all Notes is equal to or less than 10% of the total Initial
Invested Amount of all Notes; and
(ii) in the case of:
(A) Class A-1 Notes, the Quarterly Payment Date falling in [ ];
(B) Class A-2 Notes, the Quarterly Payment Date falling in [ ];
or
(C) Class A-3 Notes, the Quarterly Payment Date falling in [ ],
provided that the Issuer will be in a position on such Quarterly Payment
Date to
discharge (and the Manager so certifies to the Issuer and the Note Trustee
upon which the Issuer and the Note Trustee will rely conclusively) all its
liabilities in respect of the Class A Notes (at their Invested Amount or
their Stated Amount if so agreed by the Noteholders) and any amounts which
would be required
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under the Security Trust Deed to be paid in priority or pari passu with the
Class A Notes if the security for the Notes were being enforced.
The Issuer will give not more than 60 nor less than 45 days' notice to the
Class A Noteholders of a repurchase under this Condition in accordance with
Condition 12.
(J) REDEMPTION FOR TAXATION OR OTHER REASONS
If the Manager satisfies the Issuer and the Note Trustee immediately prior
to giving the notice referred to below that either (i) on the next Quarterly
Payment Date the Issuer would be required to deduct or withhold from any
payment of principal or interest in respect of the Class A Notes or the
Currency Swap 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 any of the Loans
for a Collection Period ceases to be receivable (whether or not actually
received) by the Issuer during such Collection Period, the Issuer must,
when so directed by the Manager, at the Manager's option (provided that the
Issuer will be in a position on such Quarterly Payment Date to discharge
(and the Manager will so certify to the Issuer and the Note Trustee) all
its liabilities in respect of the Class A Notes (at their Invested Amount
or if the Noteholders will have agreed by Extraordinary Resolution and will
have so notified the Issuer and the Manager not less than 21 days before
such Quarterly Payment Date, at their Stated Amount) and any amounts which
would be required under the Security Trust Deed to be paid in priority or
pari passu with the Class A Notes if the security for the Class A Notes
were being enforced), having given not more than 60 nor less than 45 days'
notice to the Class A Noteholders in accordance with Condition 12, redeem
all, but not some only, of the Class A Notes at their Invested Amount (or,
if the Class A Noteholders by Extraordinary Resolution have so agreed, at
their Stated Amount) together with accrued interest to (but excluding) the
date of redemption on any subsequent Payment Date, provided that the Class
A Noteholders may by Extraordinary Resolution elect, and shall notify the
Issuer and the Manager not less than 21 days before the next Quarterly
Payment Date following the receipt of notice of such proposed redemption,
that they do not require the Issuer to redeem the Class A Notes.
(K) REDEMPTION ON FINAL MATURITY
If not otherwise redeemed, the Class A Notes will be redeemed at their
Stated Amount on the Quarterly Payment Date falling in [ ].
(L) CANCELLATION
All Class A Notes redeemed in full pursuant to the above provisions will be
cancelled forthwith, and may not be resold or reissued.
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(M) 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 Manager on behalf of the Issuer 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; and
(iii) that the Issuer will be in a position to discharge all its
liabilities in respect of the relevant Class A Notes and 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, the Note Trustee and the holders of those Class A Notes.
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 to the Paying Agent
on the applicable Payment Date or Final 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, with respect to
Class A Notes registered on the Record Date in the name of the nominee of
the Clearing Agency (initially such Clearing Agency to be DTC and 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 HSBC Bank USA at its offices at 140
Broadway, 12th Floor, New York, New York 10005-1180 and at HSBC Bank USA, c/o
HSBC Bank plc, Issuer Services, Mariner House, Pepys Street, London EC3N 4DA.
(C) PAYING AGENTS
The Issuer (or the Manager on its behalf with the consent of the Issuer, such
consent not to be unreasonably withheld), 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 the
City of London and 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 Condition 12.
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(D) PAYMENT ON BUSINESS DAYS
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 unless that day falls in the
next calendar month, in which case the due date will be the preceding
Business Day and the holder of that Class A Note 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 at which the
Class A Note is presented for payment is situated and, in the case of
payment by transfer to a US dollar account, in New York City and prior to
the 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.
(E) 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 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 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 whatever nature. In that event
the Issuer 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 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 on it
the effect of which would be to reduce the Stated Amount (in the case of final
maturity, if applicable) or the Invested 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,
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it means the date on which, the full amount of such money having been so
received, notice to that effect is duly given by the Principal Paying Agent in
accordance with Condition 12.
9. EVENTS OF DEFAULT
Each of the following is an Event of Default (whether or not it is within
the control of the Issuer).
(a) The Issuer fails to pay any Interest Entitlement within 10
Business Days of the Quarterly Payment Date on which the
Interest Entitlement was due to be paid, together with all
interest accrued and payable on that Interest Entitlement or any
other Secured Moneys, within 10 Business Days of the due date
for payment (or within any applicable grace period agreed with
the Mortgagees, or where the Mortgagee is a Noteholder, with the
Note Trustee, to whom the Secured Moneys relate).
(b) The Issuer fails to perform or observe any other provisions
(other than an obligation referred to in paragraph (a)) of this
deed or a Trust Document where such failure will have a Material
Adverse Effect and that default (if in the opinion of the
Security Trustee capable of remedy) is not remedied within 30
days after written notice (or such longer period as may be
specified in the notice) from the Security Trustee requiring the
failure to be remedied.
(c) Any of the following events occur in relation to the Issuer:
(i) 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; or
(2) entering into an arrangement, compromise or
composition with or assignment for the benefit of
its creditors or a class of them,
and is not dismissed, ceased or withdrawn within 15 Business
Days; or
(B) The Issuer 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
(ii) the Issuer 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 only in relation to
another trust of which it is the trustee);
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(iii) 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 Trustee
where this occurs in relation to another trust of which the Issuer
is the trustee);
(iv) anything analogous to an event referred to in paragraphs (i) to
(iii) (inclusive) or having substantially similar effect occurs
with respect to the Issuer.
(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 (other than as mandatorily preferred by
law) ranks ahead of or pari passu with any of the Secured
Moneys.
(e) Any Security Interest over the Trust Assets is enforced.
(f) All or any part of any Trust Document (other than the Basis
Swap, the Redraw Facility Agreement or, where the Currency Swap
is terminated by the provider of the Currency Swap as a result
of a call exercised by the Trustee under Condition 5(j), the
Currency Swap) 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 Trust Document (other than the Basis Swap, the Redraw
Facility or, where the Currency Swap is terminated by the
provider of the Currency Swap as a result of a call exercised by
the Trustee under Condition 5(j), the Currency Swap) where that
event has or will have a Material Adverse Effect.
(g) Without the prior consent of the Security Trustee (such consent
being subject to the Note Trustee's prior written consent):
(i) the Trust is wound up, or the Issuer 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 not to have been
constituted or to have been imperfectly constituted; or
(iii) unless another trustee is contemporaneously and immediately
appointed to the Trust under the Trust Documents, the Issuer ceases
to be authorised under the Trust to hold the property of the Trust
in its name and to perform its obligations under the Trust
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.
10. ENFORCEMENT
At any time after an Event of Default occurs, the Security Trustee shall
(subject to being appropriately indemnified), if so directed by (a) the
Noteholder Mortgagees
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<PAGE>
(as defined in the Security Trust Deed) alone, where the Noteholder Mortgagees
are the only Voting Mortgagees, or otherwise (b) an "Extraordinary Resolution of
the Voting Mortgagees" (being 75% of votes capable of being cast by Voting
Mortgagees present 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 Class A Noteholders, but not, unless the
Note Trustee has become bound to take steps and/or proceed under the Security
Trust Deed and fails to do so within a reasonable period of time and such
failure is continuing, the Class A Noteholders themselves), declare the Class A
Notes immediately due and payable and declare the security to be enforceable. If
an Extraordinary Resolution of Voting Mortgagees referred to above elects not to
direct the Security Trustee to enforce the Security Trust Deed, in circumstances
where the Security Trustee could enforce, the Noteholder Mortgagee may
nevertheless and the Note Trustee as Noteholder Mortgagee, 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 Noteholder Mortgagees; and
(b) at any other time:
(i) the Note Trustee, acting on behalf of the Class A Noteholders
under the Note Trust Deed and the Security Trust Deed; and
(ii) each other Mortgagee under the Security Trust Deed (other than the
Class A Noteholders).
Any reference to the Noteholder Mortgagees while they are the only Voting
Mortgagees, or where their consent is required under the Security Trust Deed in
relation to a direction or act of the Security Trustee, means Noteholder
Mortgagees representing more than 50% of the aggregate Invested Amount of the
Class A Notes and the Class B Notes.
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 Noteholder Mortgagees where they are the only Voting
Mortgagees 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 Class A 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.
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
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<PAGE>
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:
o 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 ranking in priority to or pari passu with the Class A Notes; or
o 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 (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 to discharge in full
in due course all the amounts referred to in paragraph (i).
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 or any third party in
respect of the Issuer 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.
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 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.
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 to enforce the performance of any of the
provisions of the Security Trust Deed, the Class A Notes (including these Class
A Conditions).
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
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<PAGE>
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 of enforcement 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, 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 the 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 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 may
reasonably require. Mutilated or defaced Class A 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 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 Issuer shall direct the
Note Trustee shall be deemed to be a sufficient giving of such notice.
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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.
All consents and approvals in these Conditions are to be given in writing.
13. MEETINGS OF VOTING MORTGAGEES AND MEETINGS OF CLASS A NOTEHOLDERS;
MODIFICATIONS; CONSENTS; WAIVER
The Security Trust Deed contains provisions for convening meetings of the
Voting Mortgagees to, among other things, 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.
The Note Trust Deed contains provisions for convening meetings of Class A
Noteholders to consider any matter affecting their interests, including the
directing of the Note Trustee to direct the Security Trustee to enforce the
security under the Security Trust Deed, or the sanctioning by Extraordinary
Resolution of the Class A Noteholders of a modification of the Class A Notes
(including these Class A Conditions) or the provisions of any of the
Transaction Documents, provided that no modification of certain terms
including, among other things, the date of maturity of the Class A Notes, or a
modification which would have the effect of altering the amount of interest
payable in respect of a Class A Note or modification of the method of
calculation of the interest payable or of the date 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 altering the majority required to
pass an Extraordinary Resolution or altering the currency of payment of any
Class A Notes or an alteration of the date or priority of payment of interest
on, or redemption of, the Class A Notes or an election to receive the Stated
Amount of the Notes instead of the Invested Amount in the event of a call under
Condition 5(i) or 5(j) (any such modification being referred to below as a
"BASIC TERMS MODIFICATION") shall be effective except that, if the Note Trustee
is of the opinion that such a Basic Terms Modification is being proposed by the
Issuer as a result of, or in order to avoid, an Event of Default, such Basic
Terms Modification may be sanctioned by Extraordinary Resolution of the Class A
Noteholders as described below. An Extraordinary Resolution passed by the Class
A Noteholders shall be binding on all
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<PAGE>
Class A Noteholders. The vote required for an Extraordinary Resolution shall be
Class A Noteholders holding notes which represent 75% of outstanding principal
balance of the Class A Notes.
The Note Trust Deed permits the Note Trustee, the Manager and the Issuer
to, following the giving of not less than 10 Business Days' notice to each
Designated Rating Agency, alter, add to or modify, by way of supplemental deed,
the Note Trust Deed (including the meeting and amendment provisions), the
Conditions (subject to the proviso more fully described in clause 37.2 of the
Note Trust Deed or any other terms of that deed or the Conditions to which it
refers) or any Transaction Document so long as that alteration, addition or
modification is:
o to correct a manifest error or ambiguity or is of a formal, technical
or administrative nature only;
o in the opinion of the Note Trustee necessary to comply with the
provisions of any law or regulation or with the requirements of any
Government Agency;
o in the opinion of the Note Trustee appropriate or expedient as a
consequence of a change to any law or regulation or a change in the
requirements of any Government Agency (including, but not limited to, an
alteration, addition or modification which is in the opinion of the Note
Trustee appropriate or expedient as a consequence of the enactment of a
law or regulation or an amendment to any law or regulation or ruling by
the 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 the Trust); or
o in the opinion of the Note Trustee not materially prejudicial to the
interests of the Class A Noteholders as a whole, and is undertaken in a
manner and to the extent, permitted by the Transaction Documents.
Where, in the opinion of the Note Trustee, a proposed alteration, addition
or modification to this deed, other than an alteration, addition or
modification referred to above, is materially prejudicial or likely to be
materially prejudicial to the interests of Class A Noteholders as a whole or
any Class of Class A Noteholders, the Note Trustee, the Manager and the Issuer
may make that alteration, addition or modification only if sanctioned in
writing by holders of at least 75% of the aggregate Invested Amount of the
Class A Notes.
The Note Trustee may also, in accordance with the Note Trust Deed and
without the consent of the Class A Noteholders (but not in contravention of an
Extraordinary Resolution), waive or authorise any breach or proposed breach of
the Class A Notes (including these Class A Conditions) or any Transaction
Document or 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
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as such. Any such modification, waiver, authorisation or determination shall be
binding on the Class A Noteholders and, if, but only if, the Note Trustee so
requires, any such modification shall be notified to the Class A Noteholders in
accordance with Condition 12 as soon as practicable.
The Manager shall distribute to all Class A Noteholders and the Designated
Rating Agencies a copy of any amendments made in accordance with the procedure
described in that clause 19 of the Note Trust Deed and under the relevant
Condition 12 as soon as reasonably practicable after the amendment has been
made.
Any amendment made will be binding on Noteholders and shall conform to the
requirements of the TIA as then in effect so long as the Note Trust Deed shall
be qualified under the TIA.
14. INDEMNIFICATION AND EXONERATION OF THE NOTE TRUSTEE AND THE SECURITY
TRUSTEE
(a) The Note Trust Deed and the Security Trust Deed contain
provisions for the indemnification of the Note Trustee and the
Security Trustee (respectively) and for their relief from
responsibility, including provisions relieving them from taking
proceedings to realise the security and to obtain repayment of
the Class A Notes unless indemnified to their satisfaction. Each
of the Note Trustee and the Security Trustee is entitled to enter
into business transactions with the Issuer and/or any other party
to the Transaction Documents without accounting for any profit
resulting from such transactions. Except in the case of
negligence, fraud or breach of trust (in the case of the Security
Trustee) or negligence, fraud, default or breach of trust (in the
case of the Note Trustee), 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 if prudently
chosen in accordance with the Transaction Documents.
(b) Where the Note Trustee is required to express an opinion or make
a determination or calculation under the Transaction Documents,
the Note Trustee may appoint or engage such independent advisers
as the Note Trustee reasonably requires to assist in the giving
of that opinion or the making of that determination or
calculation and any reasonable costs and expenses payable to
those advisers will be reimbursed to the Note Trustee by the
Issuer or if another person is expressly stated in the relevant
provision in a Transaction Document, that person.
15. LIMITATION OF LIABILITY OF THE ISSUER
(A) GENERAL
Clause 30 of the Master Trust Deed applies to the obligations and
liabilities of the Issuer in relation to the Class A Notes.
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(B) LIABILITY OF ISSUER LIMITED TO ITS RIGHT OF INDEMNITY
(i) The Issuer enters into the Transaction Documents and issues the
Notes only in its capacity as trustee of the Trust and in no
other capacity (except where the Transaction Documents provide
otherwise). Subject to paragraph (iii) below, a liability
arising under or in connection with the Transaction Documents or
the Trust can be enforced against the Issuer only to the extent
to which it can be satisfied out of the assets and property of
the Trust which are available to satisfy the right of the Issuer
to be exonerated or indemnified for the liability. This
limitation of the Issuer's liability applies despite any other
provision of the Transaction Documents and extends to all
liabilities and obligations of the Issuer in any way connected
with any representation, warranty, conduct, omission, agreement
or transaction related to the Transaction Documents or the
Trust.
(ii) Subject to paragraph (iii) below, no person (including any
Relevant Party) may take action against the Issuer 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 or prove in any liquidation, administration or
arrangements of or affecting the Issuer.
(iii) The provisions of this Condition 15 shall not apply to any
obligation or liability of the Issuer 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's indemnification or exoneration out of the assets of the
Trust as a result of the Issuer's fraud, negligence or Default.
(iv) It is acknowledged that the Relevant Parties are responsible
under the Transaction Documents for performing a variety of
obligations relating to the Trust. No act or omission of the
Issuer (including any related failure to satisfy its obligations
under the Transaction Documents) will be considered fraud,
negligence or Default of the Issuer for the purpose of 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 person who has been delegated or appointed
by the Issuer in accordance with the Transaction Documents to
fulfil its obligations relating to the Trust or by any other act
or omission of a Relevant Party or any such person.
(v) In exercising their powers under the Transaction Documents,
each of the Issuer, the Security Trustee and the Noteholders
must ensure that no attorney, agent, delegate, receiver or
receiver and manager appointed by it in accordance with a
Transaction Document has authority to act on behalf of the
Issuer in a way which exposes the Issuer to any personal
liability and no act or omission of any such person will be
considered fraud, negligence or Default of the Issuer for the
purpose of paragraph (iii).
(vi) In this Condition 15, "RELEVANT PARTIES" means each of the
Manager, the Servicer, the Calculation Agent, each Paying Agent,
the Note Trustee, the
I -- 32
<PAGE>
Custodian, the Basis Swap Provider, the Standby Basis Swap Provider,
the Fixed-Floating Rate Swap Provider, the Standby Fixed-Floating Rate
Swap Provider and the Currency Swap Provider.
(vii) In this Condition 15, "DEFAULT" means a failure by the Issuer to
comply with an obligation which is expressly imposed on it by the
terms of a Transaction Document or a written direction given by the
Manager in accordance with a Transaction Document (and in terms which
are consistent with the requirements of the Transaction Documents) in
circumstances where the Transaction Documents require or contemplate
that the Issuer will comply with that direction; in each case within
any period of time specified in, or contemplated by, the relevant
Transaction Document for such compliance. However, it will not be the
Default of the Issuer if the Issuer does not comply with an obligation
or direction where the Note Trustee or the Security Trustee directs
the Issuer not to comply with that obligation or direction.
(viii) Nothing in this clause limits the obligations expressly imposed on
the Issuer under the Transaction Documents.
16. GOVERNING LAW
The Class A Notes and the Relevant Documents are governed by, and shall be
construed in accordance with, the laws of New South Wales, Australia (except
for the Currency Swap which is governed by New York law and the Note Trust
Deed). The Note Trust Deed is governed by the laws of New South Wales,
Australia, and the administration of the trust constituted thereunder is
governed by English law.
I -- 33
<PAGE>
SUMMARY OF PROVISIONS RELATING TO THE CLASS A NOTES
WHILE IN BOOK ENTRY FORM
Each Class of 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$[ ] (comprising US$[ ] in the case of Class
A-1 Notes, US$[ ] in the case of Class A-2 Notes, and US$[ ] in the case of
Class A-3 Notes). 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 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 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 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 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 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 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 A 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:
I -- 34
<PAGE>
(i) the Principal Paying Agent advises the Manager 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;
(ii) the Issuer, at the direction of the Manager (at the 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
(iii) after the occurrence of an Event of Default, the Class A Note
Owners 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 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 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 by the Clearing Agency, and the delivery
by the Clearing Agency of the relevant registration instructions to the Issuer,
the Issuer 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
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.
I -- 35
<PAGE>
CRUSADE GLOBAL TRUST NO. 1 OF 2000
[LOGO]
Until [ ], all dealers that effect transactions in these securities,
whether or not participating in this offering, may be required to deliver a
prospectus. This is in addition to the dealer's obligation to deliver a
prospectus when acting as an underwriter and with respect to unsold allotments
or subscriptions.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 31. 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 33. RECENT SALES OF UNREGISTERED SECURITIES.
The following information relates to securities of the registrant issued
or sold by the registrant, or for which it has acted as trust manager with
respect to, that were not registered under the Securities Act:
1. The registrant was incorporated on February 2, 1996. Five fully paid
shares of A$1.00 each were allotted to St.George Bank on February 21,
1996.
2. The registrant acted as manager with respect to the following:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
CRUSADE TRUST NO 1 CRUSADE EUROTRUST CRUSADE EUROTRUST
OF 1997 NO 1 OF 1998 NO 2 OF 1998
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
DATE August 1, 1997 March 19, 1998 September 29, 1998
- -----------------------------------------------------------------------------------------------
AMOUNT AUD $500 million USD $500 million USD $325 million
- -----------------------------------------------------------------------------------------------
TYPE Mortgage Backed Mortgage Backed Mortgage Backed
Floating Rate Notes Floating Rate Notes Floating Rate Notes
Class A Notes Class A Notes US$496m Class A Notes US$314m
$A500m Class B Notes US$ 4m Class B Notes US$ 11m
- -----------------------------------------------------------------------------------------------
EXEMPTION 100% domestic issue, not 100% European issue, 100% European issue,
FROM offered in the USA. not offered in the USA. not offered in the USA.
REGISTRATION
- -----------------------------------------------------------------------------------------------
</TABLE>
II-1
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
CRUSADE TRUST NO 1 CRUSADE EUROTRUST CRUSADE EUROTRUST
OF 1997 NO 1 OF 1998 NO 2 OF 1998
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
PRINCIPAL Bankers Trust Deutsche Morgan Deutsche Bank
UNDERWRITERS Australia Limited Grenfell BT Alex.Brown
BT Alex Brown International
International Warburg Dillon Read
UBS Limited
- -----------------------------------------------------------------------------------------------
UNDERWRITING AUD$1,500,000 USD$741,000 USD$619,000
FEES
- -----------------------------------------------------------------------------------------------
OFFERING BBSW + 23 basis points Class A: LIBOR + 18 Class A: LIBOR + 20
PRICE basis points basis points
Class B: LIBOR + 30 Class B: LIBOR + 45
basis points basis points
- -----------------------------------------------------------------------------------------------
WEIGHTED 3.85 years 3.5 years 3.6 years
AVERAGE LIFE
TO CALL
- -----------------------------------------------------------------------------------------------
</TABLE>
ITEM 34. 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,
II-2
<PAGE>
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
(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 36. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
<TABLE>
<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 Supplementary Terms Notice.*
4.3 Form of the Security Trust Deed.*
4.4 Form of the Note Trust Deed.*
4.5 Form of Agency Agreement.*
5.1 Opinion of Mayer, Brown & Platt as to legality of the 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*
10.3 Form of the Redraw Facility Agreement.*
10.4 Form of the Basis Swap *
10.5 Form of the Fixed-Floating Rate Swap.*
10.6 Form of the Cross Currency Swap.*
10.7 Form of Standby Guarantee.*
10.8 Form of Seller Loan Agreement.*
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 Note 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 37. UNDERTAKINGS.
The undersigned registrant hereby undertakes that 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
II-3
<PAGE>
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.
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.
II-4
<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 2nd day of February 2000.
Crusade Management Limited
By: /s/ Michael Harold See Bowan
-----------------------------------
Name: Michael Harold See Bowan
Title: Secretary
II-5
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints each of Michael Bowan and Diane Citron, or any
of them, his or her true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him or her and his or her 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
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/ Gregory Michael Bartlett Principal Executive Officer February 2, 2000
- -------------------------------
Gregory Michael Bartlett
/s/Steven George McKerihan Principal Financial Officer February 2, 2000
- -------------------------------
Steven George McKerihan
/s/ Steven George McKerihan Principal Accounting Officer February 2, 2000
- -------------------------------
Steven George McKerihan
/s/ Gregory Michael Bartlett Director February 2, 2000
- -------------------------------
Gregory Michael Bartlett
/s/ Steven George McKerihan Director February 2, 2000
- -------------------------------
Steven George McKerihan
/s/ William Harold Ott Director February 2, 2000
- -------------------------------
William Harold Ott
</TABLE>
II-6
<PAGE>
SIGNATURE OF AGENT FOR SERVICE OF PROCESS
Pursuant to the requirements of the Securities Act of 1933, the
undersigned hereby certifies that it is the agent for service of process in the
United States of the Registrant with respect to the Registration Statement and
signs this Registration Statement solely in such capacity.
/s/ Stefanie MacDonald
----------------------------------------
Name: Stefanie MacDonald
Address: CT Corporation System
111 Eighth Avenue
13th Floor
New York, New York 10011
Telephone: (212) 590-9100
II-7
<PAGE>
EXHIBITS INDEX
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT PAGE
NO. DESCRIPTION OF EXHIBIT 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 Supplementary Terms Notice.*
4.3 Form of the Security Trust Deed.*
4.4 Form of the Note Trust Deed.*
4.5 Form of Agency Agreement.*
5.1 Opinion of Mayer, Brown & Platt as to legality of the 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*
10.3 Form of the Redraw Facility Agreement.*
10.4 Form of the Basis Swap *
10.5 Form of the Fixed-Floating Rate Swap.*
10.6 Form of the Cross Currency Swap.*
10.7 Form of Standby Guarantee.*
10.8 Form of Seller Loan Agreement.*
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 Note Trustee.*
99.1 Opinion of Allen Allen & Hemsley as to Enforceability of
U.S. Judgments under Australian Law.*
</TABLE>
- --------
* To be filed by amendment.
II-8
